Investors vs. Entrepreneurs

Riffing on an intriguing post by Jed Harris (arguing that "in peer production, the interests of capitalists and entrepreneurs are no longer aligned") Tim Lee makes a broader statement about a split in the libertarian movement:

Libertarianism tends to be a pro-entrepreneur, pro-capitalist political philosophy. Before peer production came along, being "pro-entrepreneur" was usually equivalent to being "pro-capitalist." But with peer production, libertarians are, in a sense, asked to choose sides. Those who view economic progress primarily in financial terms--that is, who perceive the investor as the key player in the creation of new wealth, and the entrepreneur as merely his agent--will tend to regard peer production with suspicion, because peer production tends not to produce very much wealth that's in a form that can easily be transferred to investors. And they also tend to be the copyright hawks, because they view the creative process primarily in financial terms: if record labels aren't able to turn a profit, there will be a lot less music (or a lot less high-quality music) produced.

On the other hand, those who have a more entrepreneur-centric view of innovation--who view investment as merely one input in the process of entrepreneurship--will find peer production highly congenial, because peer production is simply a form of entrepreneurship that requires little or no capital as an input. These people tend to think that people have diverse motivations for engaging in creativity, and so the lack of a direct financial return does not necessarily mean that no creative works will be produced.

Lee, who puts himself in the second camp, concludes that "Both capital-intensive and peer-produced innovation are important to the economy, and as libertarians we should celebrate them both." Readers can choose sides or form their own teams in the comments.