Lavish praise for today's Horatio Alger successes

The Spirit of Enterprise, by George Gilder. New York, Simon & Schuster, pp. 274, $17.95. Entrepreneurs are becoming the modern heroes. And author George Gilder has been leading the ticker-tape parade for them. In this book, he romanticizes and glorifies the innovative business people who successfully launch new companies. It is not that entrepreneurs do not deserve praise. They often do express marvelous qualities of courage, intelligence, determination, persistence, and discipline necessary to overcome abundant obstacles. It's just that Mr. Gilder lays on the flattery rather thick.

For example, Gilder likens the revival in venture capitalism and entrepreneurialism during this decade, partially prompted by tax breaks for capital gains enacted in 1978, to ``the struggles of men and nature on the old frontier.''

Elsewhere, Gilder writes in breathless wonder: ``Bullheaded, defiant, tenacious, creative entrepreneurs continued to solve the problems of the world even faster than the world could create them. The achievements of enterprise remained the highest testimony to the mysterious strength of the human spirit. Confronting the perennial perils of human life, the scientific odds against human triumph, the rationalistic counsels of despair, the entrepreneur finds a higher source of hope than reason, a deeper well of faith than science, a farther reach of charity than welfare.''

During the 1960s and much of the 1970s, the public and the press often showed little respect for business people. They were frequently portrayed as greedy, shady (if not dishonest), resisting progress, and dull-headed.

Even entrepreneurs sometimes came off as wild men. But instead of bringing some balance to how people in business were portrayed, Gilder swings to the other extreme by glorifying successful entrepreneurs, ignoring those who fail and have less than noble ethics. As with any group of people, some businesspeople are motivated considerably by selfish goals (making money, winning power) and others more by altruistic aims (creating jobs and useful products or services). They aren't all moral heroes. Nor are they all robber barons.

Whatever, ``The Spirit of Enterprise'' is a fascinating book. It is most fun when he tells the tales of several entrepreneurs. These stories remind one of the novels of Horatio Alger, the most popular author in the United States in the last 30 years of the 19th century.

Alger preached that by honesty, cheerful perseverance, and hard work the virtuous lad would have his just reward -- though the reward was almost always precipitated by a stroke of good fortune. Some of the same elements are in the real-life stories told by Gilder.

Gilder is at his best when his entrepreneurial tales are based on interviews with the participants themselves. For instance, he tells of J. R. Simplot, an Idaho farmer who eventually became a supplier of frozen French fries to McDonald's. And he devotes a chapter to Micron, an Idaho company producing semiconductors in competition with the Japanese.

There are also the stories of John Masters, president of a firm that discovered vast amounts of natural gas in Canada; of Milos Krofta, a Yugoslav immigrant who developed a flotation process for purifying water; and of a number of Cuban immigrants who have been extraordinarily successful in Florida.

His chapter on Japanese entrepreneurs, such as Soichiro Honda (of automobile fame) and Masaru Ibuka and Akio Morita (both of Sony), is based on secondary sources and less entrancing.

Like Alger, who was a Unitarian minister before he became a novelist, Gilder has a mission in his writing. Alger taught old virtues. Gilder advocates supply-side economics. His tales are laced with capitalistic sermons. And the stories are interspersed with chapters analyzing the success of enterpreneurial activities or the failures of too much government.

``The key to growth is quite simple: creative men with money,'' he writes. ``The cause of stagnation is similarly clear: depriving creative individuals of financial power. To revive the slumping [European] nations of social democracy, the prime need is to reverse the policies of entrepreneurial euthanasia. Individuals must be allowed to accumulate disposable savings and wield them in the economies of the West. The crux is individual, not corporate or collective wealth. No discipline of the money supply or reduction in government spending, however heroic, no support scheme for innovation and enterprise, no program for creating jobs, no subsidy for productive investment, however generous and ingenious, can have any significant effect without an increase in the numbers and savings of entrepreneurs.''

That theme has some validity. But in the view of many orthodox conservative economists, Gilder and other supply-siders overdo it.

They exaggerate the economic effects of entrepreneurial activity. In one sense entrepreneurs may create their own market through innovative products and services; in another sense they may meet consumer needs and desires, however vague. But liberal economists argue that supply-siders underestimate the need for governmental concern and help for the less fortunate.

David Francis is a Monitor financial columnist.