Many economic writers—including some of the most outspoken in recent years—have argued for the superiority of small, entrepreneurial companies over large, established institutions in furthering U.S. competitiveness. They’ve argued that, given the efficiency of competitive markets, it is futile for government to intervene in industrial activities. Some claimed that recent U.S. business reverses, especially in manufacturing, represent a beneficial shift—from mass production for commodity markets toward higher value-added, specialized markets and services. The “spirit of enterprise,” to use author George Gilder’s nice phrase, guarantees that U.S. industry remains robust because the market’s action is inherently healing.
A version of this article appeared in the May 1988 issue of Harvard Business Review.