Edited by Ruth Towse
Mark Blaug and Ruth Towse Entrepreneurship is one of the most elusive and misunderstood concepts in modern economics; ironically, it has been largely ignored by many business economists, while the word is bandied about, often mistakenly, by others. Before discussing cultural entrepreneurship, therefore, it is worth considering the meaning and role of entrepreneurship as understood by economists. A brief history Richard Cantillon, that enigmatic Irishman with a Spanish name who spent much of his life in France, was the first to use the term in the modern sense in his Essai Sur la Nature du Commerce en Général, written around 1730. Writing in French (hence the term entrepreneur), he held entrepreneurs to be responsible for bringing about competition in markets through risk-taking – they ‘buy at a certain price and sell at an uncertain one’. His contribution was to make it clear that the functions of the entrepreneur and the capitalist are distinct. The capitalist is the owner of capital and employs labour with the intention of obtaining a return on capital; the entrepreneur can ply his trade without either. In this perception, he was far in advance of Adam Smith. Smith did not make that distinction and he used the English terms ‘projector’ and ‘undertaker’ for the business proprietor, who combined the role of capitalist and manager. John Stuart Mill popularized the term ‘entrepreneur’ in his Principles of Economics but retained the Smithian concept of his role. That view prevailed until the early twentieth century with the writing...
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