Entrepreneurship
Definition
Entrepreneurship is the act of arranging market factors of production in attempt to satisfy consumers, all the while accepting the uncertainty of doing so.
Discussion
Overview
The term "entrepreneurship" is derived from the French entreprendre meaning to undertake or to take on something which itself derives from the Latin interpres meaning to "go between" or "intermediary".
The primary features of entrepreneurship are:
- prices
- factors of production
- accepting uncertainty
Why entrepreneurship matters
An entrepreneur is a key driver in economic prosperity. Without entrepreneurship there is no diversity. Without diversity there are less options for people to meet their needs.
High degrees of entrepreneurship increases economic prosperity as the entrepreneurs:
- look for opportunities among factors of production
- consider the productivity per unit among the factors of production
- arrange factors of production in specific ways to meet peoples' subjective preferences.
Entrepreneurship and governance
Entrepreneurship is inherently a voluntary endeavour — it can only succeed when others voluntarily provide investment or revenue.
It is in the domain of politics where entrepreneurship can become distorted. In most countries, entrepreneurs are afforded special privileges through rent seeking, including transfer payments such as public grants or subsidies, and through monopolization and other forms of regulatory capture.
Entrepreneurship in markets is a ground-up phenomenon which reduces dependency on political institutions.
Further Resources
- Thomas J. DiLorenzo, The Politically Incorrect Guide to Economics (Regnery, 2022)
- Per Bylund, The Seen, the Unseen, and the Unrealized (Lexington Books, 2016).