The entrepreneur and the style of modern economics

Abstract

Economic theory and entrepreneurship are examined side byside in an investigation of how economic theory has come to terms with thenature of capitalism. The dynamic of modern capitalism and stimulation ofentrepreneurial activity is explained here through the growth of knowledge andinvestment opportunities combined with instituted frameworks of the marketeconomy. In addition, it is suggested that bringing an entrepreneur into the economicmix means eliminating several long-standing methodological stances of moderneconomics. An analysis of theory regarding the character of entrepreneurs,destruction versus creation, discovery and knowledge, the market process, andmanagers versus entrepreneurs substantiates the claim that only an evolutionarystance on the economic process can give the entrepreneurial function its properplace in economic theory. Capitalism is a system that can never be in equilibrium because knowledgecan never be in equilibrium. Also, capitalism that changes frequently is anecessary function of the economic system. To understand this restlessness,entrepreneurship must be at the heart of analysis since it is the entrepreneurwho transforms the structure of economic activity through generation ofeconomic knowledge. Hence, the most important element of modern capitalism is that just asknowledge creates further knowledge, entrepreneurship creates furtherentrepreneurship through the market economy. Economic revolution is necessarilyendogenous and could not be anything else, and market, firm, competitiveprocesses, and the entrepreneur are forever linked.(JSD)