Entrepreneurship, risk and income distribution in Adam Smith

Abstract

The treatment of functional income distribution in classical economics has commonly been interpreted in terms of a tripartite distinction between the roles of, and the returns to, labour, capital and land, with the classical income distribution theories explaining the determination of rates of wages, profits and rents. Is there then any distinct role for entrepreneurship in the classical approach to distribution and prices? Is it absent from those theories, or subsumed under other economic functions? How is entrepreneur remuneration understood, if theorised at all? These questions are addressed in relation to the political economy of Adam Smith in particular.