Entrepreneurship and market order: Some historical evidence
Our objective here is to establish the proposition that creative entrepreneurship gives rise to a market order which is optimally adjusted to facilitate the introduction and the diffusion of innovations, particularly those that take the form of new markets, new organizational schemes, new management devices and new methods and means of doing business. To substantiate this claim we extract from the existing historical literature and employ the ideal type entrepreneurial method of the Greek diaspora network. The interpretation we offer is that this method showed a high degree of operational flexibility and institutional adaptability and that it is these two proper-ties that explain its marked tenacity over time. The key ingredient for its success is traced to the self-regulatory robustness of the network, which was secured by the commitment of its partners to a moral order based on the triptych of ‘trust, reliability and reciprocity’ as well as to their ac-ceptance in advance of the sanctions in case of transgressions. Moreover, the embeddedness of the branches of the network in the Greek communities abroad, called Paroikies, where the Greek Orthodox Church provided moral leadership and maintained the community ties, reinforced the adherence of network partners to the rules of ethical business conduct. But in our view the domi-nant force in the design of the core mechanism that made the Greek diaspora network such a suc-cess was entrepreneurship.
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- Geoffrey M. Hodgson, 1998. "The Approach of Institutional Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 166-192, March.