Tuesday, May 25, 2010

Entrepreneur

On Saturday evening I came across a programme, Dialogue, on RTE1 in which Andy O'Mahony talked to Antoin Murphy about his book The Genesis of Macroeconomics.

My attention was caught in particular by a quote from Richard Cantillon an C18th Irish economist of whom, to the best of my knowledge, I had never heard. Sometime I must take down the old textbooks on History of Economic Thought or Development of Economic Analysis to see if Cantillon really did not figure in my day, or if the name simply passed me by.

The quote: An entrepreneur is someone who buys at a known price (un prix certain) to sell at an unknown price (un prix incertain)*.

Professor Murphy argued that this distinction between the uncertain income of entrepreneurs & the fixed wages of employees makes for a more fruitful & less divisive analysis than the distinction made by Marx (who ignored Cantillon) between the ‘lumps’ of capital & labour & the fate of surplus value, which breeds social tension.

In our own day we might extend the distinction between uncertain & fixed (or at least agreed or predictable) income to the wages of public & private sector employees. The latter are easier to make redundant, & do not these days have secure & predictable pensions to look forward to; in this case however there is certainly some social tension involved, though hardly Marxist in scale.
The entrepreneur furthermore has acquired, or been saddled with, via legally imposed conditions in the general contract of employment, a whole raft of extra obligations (& therefore costs) to those to whom he pays the fixed wages such as the granting of paid holidays, equal treatment & duty of care.


*This quote is not reproduced in the OED which finds the earliest refence to entrepreneur in English in 1828 with the meaning 'The director or manager of a public musical institution.'



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