The Capitalist Entrepreneur In Eighteenth-Century Economic Literature

Although the capitalist entrepreneur played a significant role in the early classical explanation of capital markets and economic development, mainstream opinion in the history of economic thought merely holds that eighteenth-century economists failed to distinguish the entrepreneurial function from that of supplying financial capital. Accordingly, one considers the conception of the capitalist entrepreneur an erroneous view—characterized by the confusion between profits and interest—that Jean-Baptiste Say corrected at the turn of the century (Schumpeter 1954, p. 555; Koolman 1971, p. 276). Moreover, this conception has been mainly ascribed to British authors (Perroux 1929, p. 1665; Cole 1942, pp. 120–1; Hoselitz 1951, p. 212; Blaug 1985, pp. 459–60), a claim which certainly goes back to Say's opinion that:The English do not have a word to render entrepreneur d'Industrie, which has prevented them from distinguishing, among industrial operations, the service provided by the capital from the service provided by one who uses this capital through his ability and talent. Hence…the obscurity in the demonstrations where they [the English] try to go back to the source of profits (Say 1803, pp. 74–75, n. 1; see also p. 357, n. 1).