Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition

Chapter 20. On Entrepreneurship: The Joy of Creating

How did Vanguard even happen? What was the source of its structure? Why did its structure demand its strategy? Or was that sequence reversed? When the path became two roads diverging in the woods, why did I take the road less traveled? I imagine that the fair answer to those questions has something to do with idealism, vision, opportunism, failure, and sheer luck. But I'm certain that the joy of creating was the principal reason Vanguard has been described as a classic case of entrepreneurship. I'm not sure that description fits. Let me tell a bit of the story; then you can decide.

The successful, verdant U.S. economy that we enjoy today has resulted, in important measure, from the imagination and energy of entrepreneurs. From Thomas Paine's pre-Revolution dream of independence for the Colonies—and even earlier—to modern times, most of America's great enterprises began in the dreams of the individuals who founded them. Until a few years ago, I had thought about entrepreneurship in this historical sense, rather than in personal terms. However, in early 1997, my insouciance was shattered when I received in the mail a copy of a 25-page paper by a senior at Yale University. The writer described me as a paradigm of the Schumpeterian entrepreneur.^[95]

Joseph A. Schumpeter, a Harvard professor and Austrian economist, in his 1911 work, The Theory of Economic Development, first recognized the entrepreneur as the moving force of economic ...