I think it likely that the next wave of environmentalism will focus on entrepreneurs. Certainly this approach is central to any substantial success. Disenchantment with government is growing ever stronger, thus, new perspectives and practices are required for progress.

I have been asked to write the introduction to a book advancing the theme of entrepreneurial environmentalism. I’m offering my initial musing in this and forthcoming FREE Insights. This is challenging fun because entrepreneurs were long neglected by economists and ignored or derided by environmentalists. Al Gore saw entrepreneurial innovation as “alchemy of a very dangerous form.” And economic modeling leaves no role for the entrepreneur.

As the discipline of economics became ever more abstract, technical, and mathematical, economists became ever more sophisticated in mathematics and statistics, but not alas, in understanding how the world works. Finding no way of modeling the creative uncertainty generated by entrepreneurs, economists neglected them.

The early editions of Paul Samuelson’s classic text, Economics, didn’t mention entrepreneurship nor did another classic, Alchian and Allen’s 1972 University Economics. By his seventh edition (1967), Samuelson mentions near the back of the book (chapter 31, “Profits and Incentives”) the word entrepreneur in a single sentence, as a synonym of “innovator” in business, with no further explanation of the entrepreneur’s role in production. One of the first texts to give serious attention to entrepreneurship was the second edition (1980) of Gwartney and Stroup’s Economics: Private and Public Choice. Early in their third chapter, “Supply, Demand and the Market Process,” they explained the organizational role of the entrepreneur, devoting five paragraphs to the topic to explain the supply process. They discuss it further in two later chapters, noting entrepreneurs’ innovative contributions to expanding supply while reducing costs.

From society’s perspective, successful entrepreneurs are chefs who create new and better dishes from ingredients and combinations not previously seen or realized. They provide the closest thing we have to a free lunch, and they respond quickly to changing tastes and preferences. They produce additional social value by identifying new opportunities and motivating and mobilizing action. In these ways, for-profit firms and voluntary grassroots organizations foster our environmental goals.

Conventional Greens of the post-War era—the people who brought us Earth Day—were often skeptical of the market process and ignored or discounted the role of entrepreneurship in achieving environmental objectives. Rather, their default position was to assign responsibility to government agencies that arose or evolved from the Progressive Era. Conventional Greens made the same assumptions that all Progressives made—that well-trained, altruistic agency professionals would emerge somehow to manage natural resources sustainably and in the public interest. Fortunately, this naïve perspective is changing for three fundamental reasons.

First, there is well-founded and growing disenchantment with the lack of effectiveness and efficiency of government agencies. Compelling evidence suggests that large centralized agencies are inherently incapable of taking time- and place-specific variables into account when managing natural resources or responding to environmental crises. This applies equally to the management of timber and grasslands by the U.S. Forest Service and to crisis events such as BP’s oil spill in the Gulf of Mexico.

Second, there is increasing appreciation of entrepreneurs as catalysts of material progress and change. They seek and sometimes find opportunities to create value. Books such as Matt Ridley’s The Rational Optimist: How Prosperity Evolves sensitize us to the importance of innovation and market forces to enhanced well-being. (In late July of 2010, this book was Amazon’s number 191 overall and first in three sub-categories.)

Third, there is ever more evidence and recognition that entrepreneurship trumps government programs in achieving non-economic social objectives. While there is no one set of ideal institutions, and government is surely required to monitor ecological systems and enforce contracts and agreements, until now the potential of entrepreneurs has been neglected.

In my next FREE Insights, I will explore the promises and perils of federal land management.