World Encyclopedia of Entrepreneurship
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World Encyclopedia of Entrepreneurship

Edited by Léo-Paul Dana

This comprehensive reference work, written by some of the most eminent academics in the field, contains entries on numerous aspects of entrepreneurship.
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Chapter 23: Historical Context of Entrepreneurship

Mark Casson


Mark Casson ECONOMIC THEORIES OF THE ENTREPRENEUR The entrepreneur is a leading character in many accounts of economic growth. He appears in business biographies as a charismatic founder of a company; in industry studies as a prominent innovator, or a leading figure in a trade association or cartel; and in general economic histories as one of the hordes of self-employed small business owners who confer flexibility and dynamism on a market economy. Entrepreneurship is not confined to the private sector; it can also be discerned in personalities of people who establish progressive charitable trusts and reform government administration. An adequate theory of entrepreneurship must address the following issues: 1. What does the introduction of the entrepreneur add to our understanding of economic behaviour? Do accounts of entrepreneurial behaviour supplement statistical evidence, or merely retell the same story through biographical anecdote? Is entrepreneurship just a label for an area of ignorance? Does it – like ‘culture’ and ‘institutions’ – sometimes just denote residual causes of growth that cannot be properly measured? Can anyone really know what goes on inside the mind of an entrepreneur? If not, what is the point of speculating about the subject? 2. 3. The term ‘entrepreneur’ appears to have been introduced into economic theory by Richard Cantillon (1755), an Irish economist of French descent. According to Cantillon, the entrepreneur is a specialist in taking on risk. He ‘insures’ workers by buying their output for resale before consumers have indicated how much they are willing to pay for it. The...

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