By: Daniel Currie
R. Hebert and A. Link
Whatever happened to the entrepreneur in economics? The days when the entrepreneur used to be of main importance in the study of economics are long gone. We can only revel in the great masters of the 18th to the early 20th century to understand what it is the entrepreneur does. However, it is an arduous and time-consuming task to search for the many books. Additionally, it is difficult to pry ourselves away from our many responsibilities of our lives to read these ‘old books.’ This short classic solves those problems.
This book starts off by providing an analysis of what it is an entrepreneur actually does from an economic point of view. Is he/she a leader? To what ends does this take place? What are the terms that constitute an entrepreneur? The many questions and answers that we want are present in this book.
But, the book does far more than what I stated above. The authors perform a sweeping historical dissection on the theory of the entrepreneur. Remember that the entrepreneur is as ‘old as the institutions of barter and exchange.’ (7) Henri Pirenne noted how the navigator Romano Mairano (1152-1201) started his business and even failed. Loans to entrepreneurs were given to capitalists with large interest rates and these institutional arrangements were known as societas maris in Ancient Greeceor the colleganza in 13th Century Venice.
Richard Cantillon in his Essai sur la nature du commerce en general wrote the first treatise on economics and the entrepreneur. His main point was to notice the inherent risk and uncertainty that an entrepreneur is faced with in allocating resources:
“Many people set themselves up…as merchants or entrepreneurs…: they pay a certain price for produce depending on where they purchase it, to resell wholesale or retail at an uncertain price.”
And then we are given a ride through history as we study the works of Quesnay, Smith, Turgot, Say, Ricardo, Baudeau, Mill and Bentham. We are then given a tour of the neoclassical and Austrian school study of the entrepreneur. How the former eschewed the study for the entrepreneur to model the different ‘ends’ of resource allocation rather than the different ‘means’ to the end. Alfred Marshall and his disciples (notably Keynes and Pigou) are also studied in detail. The undeniable contributions of Kirzner, Shackle and Mises to the study of the entrepreneur are also looked through.
This book is a great primer and historical study of the most important facet in economics – the entrepreneur. As G.L.S. Shackle stated that “the question of how the business man’s mind works and what materials it works with in approaching a decision…is one of the most fascinating…in the whole of economics.” This book should help provide us with the information and aid the resurgence of the study of entrepreneurs.