Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
(?-1899)
BIO
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Editor/Trans.
First Pub. Date
1881
Publisher/Edition
New York: Maynard, Merrill, and Co.
Pub. Date
1899
Comments
Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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ENTREPRENEUR

II.26.1

ENTREPRENEUR.In taking account of the nature of the agents which co-operate in production, we distinguish, in any business enterprise, the entrepreneur and the workmen. The latter, according as they contribute to the industrial and ornamental art, or to scientific work, take the name of artisan, mechanic, artists, savants, etc. The workmen execute the orders of the entrepreneur, who conceives the enterprise or operation combines the scientific, moral and material elements which it requires, and directs the creation and sale of its products.

II.26.2

—The entrepreneur must then have in a certain measure, the knowledge of the artisan, the savant, the inventor, etc., at least so far as it is necessary for him to apply it: he must be familiar with the manual processes of the workman; must know how to procure the means required for production, to discern the best industrial processes, to choose the men who are to second him, and to procure, by way of credit or of association, the needful capital; and finally, he must direct all these elements of his enterprise with judgment, precision and energy.—"In the course of all these operations," says J. B. Say, "there are obstacles to surmount which demand a certain energy; there are inquietudes to bear which demand firmness; there are misfortunes to be repaired, for which a mind fertile in resources is needed."

II.26.3

—Dunoyer has well portrayed the numerous and important qualities necessary for an entrepreneur. "In the number of powers which exist in man, the first which strikes me," he says, "the one which naturally takes the place at the head of all the others, the one most indispensable to success in every kind of enterprise, and to free action in all the arts, is the talent for business, a talent in which are combined several very distinct faculties, such as a capacity for judging of the state of demand, or of knowing the wants of society; that of judging of the condition of supply, or of estimating the means of satisfying those wants; that of managing with ability enterprises wisely conceived; and finally, that of verifying the previsions of speculation by regular accounts intelligently kept. After this list of faculties relating to the conception and conduct of enterprises, of which the business talent is composed, come those faculties necessary for execution, from which the art talent arises. Such are, practical knowledge of the calling, theoretical ideas, talent for applying them, and skill in handicraft. All these faculties are industrial; * * * but I remark also a great number of moral qualities. Among these may be mentioned a whole class of habits which govern the conduct of persons with regard to themselves, and which in some sort concern only the individual. There may also be distinguished habits of another kind, which more particularly concern society. Power and free action in all kinds of occupations depend, as we shall see, on the perfection of both these classes of moral qualities."

II.26.4

—The entrepreneur is, then, the principal agent in production. He devotes to it his activity, he sacrifices to it his reputation and his honor; but, on the other hand, he may derive form it, with a high salary for his labor and profit on his capital, more or less important advantages which may augment his fortune, and which spring form the qualities with which he may be endowed, the activity he may display, and the risks he has to incur.

II.26.5

—It is because of a failure to take into account all these circumstances, and to have a definite idea of the laws of the variations of profits and wages, and the importance and the reciprocal rights of capital, labor and talent in the distribution of profits, that the working classes have often been led to look suspiciously on the success of the entrepreneurs, and to consider the profits and advantages of the latter as acquired at the expense of the workmen. A more general acquaintance with the principles of political economy would have the effect of correcting this false and dangerous manner of looking at things, and of showing those who live by their labor alone that it is decidedly for their interest that entrepreneurs should be numerous and prosperous; for in this case labor is more in demand and wages rise. We will not say that there is no prejudice on the part of the entrepreneurs, some of whom do indeed seem to think that it is they who maintain their workmen, and that the latter owe them something besides the labor they sell to them. The study of the laws of political economy would not be without use to these persons. By giving them sounder views on all matters, and of their rôle in society, it would serve to strengthen their judgment and intelligence in the conduct of affairs; and to overcome their prejudices, which contribute to alienate their workmen, their natural allies who, before the law of demand and supply, are neither their superiors nor their inferiors, but their equals.

II.26.6

—Carrying on business enterprises by association does not change the nature and the rôle of the entrepreneur, but it lessens them. The various partners share in fact more or less in the conception, the direction, the honor and the responsibility of the business. Nevertheless, whatever be the societary combination, there must be, under penalty of failure, a director or manager possessing most of the qualities we have recognized in the entrepreneur. The value of the business manager determines largely the value of the association.

II.26.7

—Lastly, we will say that every entrepreneur who does not work exclusively with his funds, is the pivot of an association, and that his workmen or those in his employ are partners, who, being bound only by temporary engagements and not being willing to participate in the bad chances, renounce the good ones and content themselves with a compensation regulated by the law of demand and supply.

II.26.8

E. J. L., Tr.

JOSEPH GARNIER.

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