Machiavellian entrepreneurship
Niccolò Machiavelli (born 1469) was an Italian diplomat and infamous strategist who wrote extensive letters teaching cunning strategies to "princes" ruling over territories throughout Europe. 16th-century Europe was very divided compared to today, especially in and around Italy, which was composed of a large number of small autonomous and semi-autonomous territories (city-states and kingdoms).
Princes as Early Entrepreneurs
Although Machiavelli is often considered a figure in the history of political science, these rulers acted as what Baumol (1996) describes as entrepreneurs of their time. Princes would take territory, or castles, rather than fight over money.
Machiavelli's letters can be thought of as elaborating entrepreneurial strategies to get ahead in feudal times. However, many of these are largely inappropriate in the current business context.
Core Machiavellian Axioms
Many regard Machiavelli's strategies as unethical, yet his famous book The Prince continues to be cited and read within the business school community and by military practitioners. Along with Sun Tzu's Art of War, it is considered a classic work on strategy.
The core ideal of the theory is that the ends justify the means, as the end is total power over a territory and its resources. If a young prince wanted to achieve power, he needed to topple an older incumbent. Machiavelli recommended strategies including the use of killing to eliminate competitors, viewing this as superior to imprisonment or exile because those alternatives allowed competitors to stage a return.
Axioms credited to Machiavelli include:
- It is better to be feared than to be loved.
- Loyalty must be strong and resistance crushed.
- The ends justify the means.
Modern Application: Destructive Entrepreneurship
Perhaps Machiavelli was a realist writing during a time of weak institutions. Today, entrepreneurs often find themselves in trouble with the law when they pursue Machiavellian strategies to usurp incumbent firms.
The modern institutional systems in place regulate Machiavellian behaviors and act as a barrier to entry. However, these types of barriers may be considered desirable because they prevent what is now understood to be destructive entrepreneurship (Baumol, 1990), where the entrepreneur gains value but harms the broader society or network.
Machiavelli's Advice for Modern Leaders (Video Overview)
Sources
- Baumol, W. J. (1996). Entrepreneurship: Productive, unproductive, and destructive. Journal of Business Venturing, 11(1), 3-22.
- Machiavelli, N. (1940). The Prince and Discourses On the First Decade of Titus Livius. New York: The Modern Library.
