Socialism, Economic Calculation and Entrepreneurship

Socialism, Economic Calculation and Entrepreneurship

New Thinking in Political Economy series

Jesús Huerta de Soto

This highly topical book presents a new theory on the characteristics of entrepreneurial knowledge. It explores the recent shift among professional economists and scholars in their evaluation of the debate of socialism. Socialism, Economic Calculation and Entrepreneurship presents an application of Israel M. Kirzner’s theory of entrepreneurship to the theory of the impossibility of socialism. It discusses the influence of the fall of socialism, with particular reference to the evolution of economic thought.

Chapter 2: Entrepreneurship

Jesús Huerta de Soto

Subjects: economics and finance, austrian economics, history of economic thought, political economy, politics and public policy, political economy


As it is impossible to grasp the concept of socialism without a prior understanding of the essence of entrepreneurship, this chapter will be devoted to a study of the notion, characteristics and basic elements of entrepreneurship. Our idea of entrepreneurship is at once broad and precise. It is closely related to the conception of human action as an integral and fundamentally creative feature of all human beings, and also as the set of coordinating abilities which spontaneously permit the emergence, preservation and development of civilization. Finally, our analysis of entrepreneurship will allow us to propose an original definition of socialism, understood as a “social illness”, the most characteristic symptoms of which are widespread maladjustment and extensive discoordination between the individual behaviors and social processes that make up life in society. 1 THE DEFINITION OF ENTREPRENEURSHIP In a broad or general sense, entrepreneurship actually coincides with human action. In this respect, it could be said that any person who acts to modify the present and achieve his objectives in the future exercises entrepreneurship. Although at first glance this definition may appear to be too broad and to disagree with current linguistic uses, let us bear in mind that it coincides with a conception of entrepreneurship which economists are increasingly studying and developing.1 Moreover, this conception fully agrees with the original etymological meaning of the term “enterprise” (empresa in Spanish). Indeed, both the Spanish word “empresa” and the French and English expression “entrepreneur”2 derive etymologically from the Latin verb in prehendo-endi-ensum,...

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