It wasn't just the American west that attracted the ambitious. Sample from a time and place with healthy entrepreneurial capitalism and I think you'll find that ambitious people had a much greater inclination towards starting a business than they do today. Examples: every American city pre-1930, most of Western Europe between 1815 and 1914, the Netherlands post 1600, and Venice in the 15th century. Nothing like our modern "organization man" economy existed in these places. Ambitious, upwardly mobile people did not find safe jobs as managers. They did not rise to the top by climbing the ladder. They started workshops, built factories, and captained merchant ships. The British East India Company and the Medici bank were among the world's very first startups, and they were both highly successful. I'd also note that the Medici bank had fewer employees than a well funded silicon valley startup. And each of its nine branches was a semi-independent startup - kind of like your "pooled-risk management company".
Of course, in places without entrepreneurial capitalism, most ambitious people aimed to work for large existing organizations - usually the government, church, or military. Examples: France before 1815, the papal states, China for its entire history, the late Roman empire, modern Japan, and modern Europe.
It seems part of your thesis is: "For most of history, ambitious people sought to join large organizations such as the church, state, or army. But with the rise of entrepreneurial capitalism, ambitious people instead chose to start or join small, growth oriented businesses"
I agree with this part of your thesis completely. My point of contention is that I don't think entrepreneurial capitalism began in the late twentieth century. Entrepreneurial capitalism began in earnest around the 17th century, and peaked across the Western world in 1914. Then the world wars and the progressive movement almost completely wiped out entrepreneurial capitalism and replaced it with the civil service state/managed capitalism.
The rise of Silicon Valley is a step towards restoration, not a brand new innovation. Nor are venture capital firms anything new. It used to be that banks and angels were the primary sources of venture capital, see the Boston Associates for one example of many: http://en.wikipedia.org/wiki/The_Boston_Associates. But post-New Deal, banks were highly regulated, non-risk taking entities. The 95% marginal tax rates severely limited the supply of wealthy investors. The founders of Silicon Valley had to basically reinvent the wheel and call it a different name.
Of course, in places without entrepreneurial capitalism, most ambitious people aimed to work for large existing organizations - usually the government, church, or military. Examples: France before 1815, the papal states, China for its entire history, the late Roman empire, modern Japan, and modern Europe.
It seems part of your thesis is: "For most of history, ambitious people sought to join large organizations such as the church, state, or army. But with the rise of entrepreneurial capitalism, ambitious people instead chose to start or join small, growth oriented businesses"
I agree with this part of your thesis completely. My point of contention is that I don't think entrepreneurial capitalism began in the late twentieth century. Entrepreneurial capitalism began in earnest around the 17th century, and peaked across the Western world in 1914. Then the world wars and the progressive movement almost completely wiped out entrepreneurial capitalism and replaced it with the civil service state/managed capitalism.
The rise of Silicon Valley is a step towards restoration, not a brand new innovation. Nor are venture capital firms anything new. It used to be that banks and angels were the primary sources of venture capital, see the Boston Associates for one example of many: http://en.wikipedia.org/wiki/The_Boston_Associates. But post-New Deal, banks were highly regulated, non-risk taking entities. The 95% marginal tax rates severely limited the supply of wealthy investors. The founders of Silicon Valley had to basically reinvent the wheel and call it a different name.