Economic Logic Fourth Edition by Mark Skousen

Author:Mark Skousen
Language: eng
Format: epub
Published: 2019-02-05T16:00:00+00:00

THE ROLE OF THE ENTREPRENEUR

The entrepreneur also plays a vital role in the economy. The word “entrepreneur” comes from the French word entreprendre, which means “to undertake.” It forms the basis of the English word, “enterprise.” The French economist J. B. Say invented the word to mean “venture capitalist” or “adventurer.”

Entrepreneurs are the business owners and producers who assume the risk, uncertainty, and responsibility of running an enterprise. They seek to meet the needs and wants of consumers through innovation, technological change, and increasing capital expenditures. Without this decision-maker, economic performance and living standards would not be advanced. As historian Robert Sobel writes, entrepreneurs are “men and women of vision and energy [who] have seen possibilities where others saw none, seized opportunities when others hesitated, persevered when others gave up.” 2

Entrepreneurs are innovators who reshape patterns of production and distribution, develop new products and processes, open new markets and sources of supply, devise new forms of organizations, and improve existing companies. They are alert to opportunities and new ways of accomplishing tasks. Like all participants in the marketplace, entrepreneurs specialize in what they know best.

Entrepreneurs are also speculators who seek a profit in the stock, commodity, and foreign currency markets, or who take advantage of discrepancies between markets for the same good. They may try to take over existing companies considered to be undervalued or mismanaged. They are opportunity seekers and visionary organizers who bring together capitalists, landlords, workers, and specialized knowledge to create goods and services that they hope consumers will buy. Entrepreneurship is often a discovery process. For the entrepreneur, the future is uncertain and highly risky at times. Many fail, but those who succeed are usually well rewarded.

Speculators are often viewed in a negative light, allegedly causing crises and chaos. But speculators are often the only ones willing to assume the risks of volatile price changes that affect farmers, importers, exporters, and other hedgers in the marketplace.

Entrepreneurs drive the engines of wealth. They are the market decision-makers. In a very real sense, the market process is entrepreneur-driven.

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