Abstract
In standard economic theory there is no significant role for the entrepreneur. At most he has the task of calculating marginal cost (or hiring someone else to do that) and equating it with price or marginal revenue. When considering investment projects, he must make estimates of future yields (or hire someone else to do that), apply a suitable discount factor, and compare the present value of the project with its cost. There is no obvious reason why there should be a shortage of people capable, under suitable instruction, of making such calculations. Consequently, in standard economic theory there is no need to consider whether entrepreneurship, like other factors, has a supply side. The implied assumption is that, provided that there is a suitable legal framework, a free market, and freedom of enterprise, there will be an ample — and virtually infinitely elastic — supply of entrepreneurs. It is sometimes said that new entrants expect to receive ‘normal profits’. But this concept is never clarified, nor made consistent with the basic assumptions of perfect competition.
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Notes
M. Wiener, English Culture and the Decline of the Industrial Spirit, 1850–1980 (Cambridge University Press, 1981).
See Ruth Towse and Mark Blaug, ‘The current state of the British economics profession’, Economic Journal, v. 100 (March 1990), p. 290.
See Ronald Dore, British Factory — Japanese Factory (University of California Press, 1973). Also Richard Tanner Pascale and Anthony G. Athos, The Art of Japanese Management (Penguin Books, 1982).
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© 1992 Harold Lydall
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Lydall, H. (1992). The Supply of Entrepreneurship. In: The Entrepreneurial Factor in Economic Growth. Palgrave Macmillan, London. https://doi.org/10.1057/9780230374461_7
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DOI: https://doi.org/10.1057/9780230374461_7
Publisher Name: Palgrave Macmillan, London
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