Rick Lowe
Mr. Jerome Gomez, PLP Candidate and former head of the Bahamas Government Venture Capital Fund, wrote recently that the key to economic growth is moving more of the poor into the middle class. But, he implores that this can’t be done until this segment of the population is provided better access to capital, by creating uniquely tailored programs to assist SME's" (Small and Medium Enterprises). Read more here…
Of course his whole argument rests on government providing that capital from Bahamian taxpayers, or by forcing banks to lend their depositors savings for entrepreneurial ventures that his own experience has proven are high risk.
Where did the idea that taxpayer money should be used to provide capital, or the coercive power of government employed to force others to provide those start up funds for entrepreneurs come from in the first place?
In the late 1800's George Eastman, of Eastman Kodak, had a shortage of capital but a surplus of character, and most entrepreneurs are like Mr. Eastman. ( See http://bit.ly/ndmmwU )
Mr. Gomez is incorrect to suggest that the government needs to dictate what banks should do with their depositors money, or why entrepreneurs today deserve taxpayer start up funds. We need less bureaucratic red tape so new businesses are able to get up and running to serve their potential clients. And if the customers like the goods or services provided, wealth and economic growth will result. There are many local examples of successful entrepreneurs who did not give up when having to deal with obstacles, like the lack of capital for example. Not unlike business people have faced around the globe.
The only reason to suggest that entrepreneurs receive these so called "uniquely tailored programs" is to speed up the growth process of these new businesses (SME's), and transfer potential losses to other people, but they are not the right incentives. They set more politically constructed moral hazards in play.
While he is right that "Successful entrepreneurship allows people to move from poverty to wealth" he's wrong to expect taxpayer "venture" capital or for the government to dictate that banks and other institutions provide it. This position is no more than a politically motivated albeit diplomatically worded attempt to transfer wealth by force.
