The Entrepreneur The Economic Function of Free Enterprise

This book presents the economic theories with regards to the entrepreneur of yesterday and those of more recent years, on which issue research has been developing exponentially since the last third of the 20th Century. Much of this book will be devoted to contemporary theories. This presentation of economic theories of the entrepreneur leads us to wonder about the structural development of the free enterprise system in the short and the long term. The proliferation of entrepreneurial initiatives leads in effect to a profound transformation of modes of production and work, for example under the current phenomenon of uberization economy.

Dimitri UZUNIDIS, Research Network on Innovation (RNI).

Foreword ix

Introduction  xiii

Chapter 1. From Term to Concept: the Entrepreneur and his Economic Function  1

1.1. Etymological and conceptual bases of the entrepreneur 1

1.2. The gradual recognition of the role of entrepreneurship  8

1.3. From a society of salary-earners to one of entrepreneurs? 9

1.4. Current definitions of entrepreneurship, or the institutional recognition of the entrepreneur  17

1.5. The plural entrepreneur  19

Chapter 2. Quantifying Entrepreneurship, Understanding the Entrepreneurial Role  21

2.1. Basic principles: the OECD’s model  21

2.2. The main entrepreneurship indicators 24

2.2.1. Eurostat indicators  24

2.2.2. OECD and Eurostat indicators 24

2.2.3. Global Entrepreneurship Monitor indicators 25

2.2.4. World Bank indicators and the business climate  28

2.2.5. The official quantification of business creation in France: the Business Creation Observatory  29

2.3. The European Union’s inclusive policy to promote entrepreneurship 30

2.4. Supporting entrepreneurship in developing countries: the ambitions of the United Nations (UN) and the United States  31

Chapter 3. Classical Economics of the Entrepreneur 35

3.1. Richard Cantillon: an economic agent with uncertain income 35

3.2. Anne Robert Jacques Turgot: the “progress” of the capitalist entrepreneur 36

3.3. François Quesnay, the manufacturing and commercial entrepreneur belongs to the sterile class 38

3.4. Pietro Verri and Cesare Beccaria, the inspiration for Jean-Baptiste Say? 38

3.5. Adam Smith: sympathy for initiative, but distrust of project creators 40

3.6. Jean-Baptiste Say: intermediary between scholar and laborer 42

3.7. Karl Marx, entrepreneur or officer of capital 46

3.8. Jean-Gustave Courcelle Seneuil, economistentrepreneur or entrepreneur-economist?  47

3.9. The marginalists’ faux pas or Léon Walras’s ghost entrepreneur 51

3.10. Alfred Marshall, division of industry into entrepreneurial and managerial businesses  56

3.11. Werner Sombart and Max Weber, the entrepreneur or the spirit of capitalism 58

3.12. Joseph A. Schumpeter: the entrepreneur’s “new combinations of production factors” 60

3.13. John Maynard Keynes: the animal spirit of the entrepreneur  65

3.14. From uncertainty to ignorance: Ludwig von Mises, Franck Knight and Friedrich Hayek 67

3.15. Creating or detecting opportunities? 69

Chapter 4. Contemporary Theories of the Entrepreneur 73

4.1. From entrepreneur to industrial economy 73

4.2. Ronald Coase, or the entrepreneur on the frontier of industrial economics 75

4.3. William Baumol, the entrepreneur and the Prince of Denmark 77

4.4. Mark Casson: entrepreneurship – an alternative to employment?  79

4.5. Scott Shane or the genetic theory of the entrepreneur  83

4.6. Entrepreneur, innovation, territory and social networks 85

4.7. Mark Granovetter – from social integration to weighted networks  88

4.8. Towards an evolutionist theory of the entrepreneur, or the heterogeneity of entrepreneurship  90

Chapter 5. Towards a Socioeconomics of the Entrepreneur: An Overview 93

5.1. The 13 keywords of the economics of the entrepreneur 93

5.2. On the entrepreneur’s personality: the player and the system 95

5.3. Resource potential and the social integration of the entrepreneur  100

5.4. Overall picture of the theory of the entrepreneur 103

Conclusion 109

Bibliography  111

Index 123

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