Entrepreneurship

All production is forward looking, and the future is uncertain. The economics of prosperity, therefore, must include a sound conception of the entrepreneur, an uncertainty bearer, capitalist, and property-owning decision maker. Increased economic prosperity results from dynamic efficiency, achieved through entrepreneurial creativity and coordination. While performing the social function of bearing uncertainty, the entrepreneur coordinates diverse land, labor, and capital goods of numerous people, and directs production to its most socially valuable ends as determined by everyone in society. Entrepreneurial creativity improves everyone’s economic possibilities with a continuous flow of new ends and means. In forming their judgements, entrepreneurs make use of subjective, practical, exclusive, dispersed, and largely tacit knowledge of the particular time and place that is relevant for the personal decisions each entrepreneur must make. The entrepreneur must make judgements about the most profitable type and quality of the product, the best location in which to produce and supply the good, the optimal scale of operation the optimal time of availability for sale; and the anticipated price buyers are willing to pay for the product. Entrepreneurs make objective decisions regarding subjective values as they engage in economic calculation in which they use market monetary prices to calculate expected profit and loss. Effective economic calculation requires a monetary market economy. Sound money and voluntary exchange require maintaining social institutions that foster entrepreneurship. Economic history is replete with examples of significant entrepreneurial error or a lack of functional entrepreneurship all together resulting in both absolute and relative poverty. Neither the market division of labor nor capital accumulation nor technological improvement are autonomous. They contribute to prosperity as a multitude of entrepreneurs, each pursuing their own profit, make sound judgements about production to satisfy an uncertain future demand. Increased economic prosperity, therefore requires successful entrepreneurship.