Definitions and Basics

Entrepreneurship, from the Concise Encyclopedia of Economics

The term entrepreneur, which most people recognize as meaning someone who organizes and assumes the risk of a business in return for the profits, appears to have been introduced by Richard Cantillon (1697-1734), an Irish economist of French descent. The term came into much wider use after John Stuart Mill popularized it in his 1848 classic, Principles of Political Economy, but then all but disappeared from the economics literature by the end of the nineteenth century….

Entrepreneurship in the Classroom, Federal Reserve Bank of Kansas City

A collection of lesson plans, articles, webinars, and video resources including a Youth Entrepreneurship Guide and Building Entrepreneurship Ecosystems in Communities of Color.

Russell Sobel, Missing: Entrepreneurship in Economic Education, Econlib, August 2020.

Most Principles of Economics textbooks do not even have the word entrepreneurship in the index. Can you believe it? That’s right, four or five chapters of your principles book are devoted to ‘the theory of the business firm,’ and the book doesn’t even mention the individual actor who started and runs the business firm, or their role in the economy at large. Check the index of the textbook on your shelf—I dare you.

In the News and Examples

Interviews with Entrepreneurs at Khan Academy. (Interviewees include Richard Branson, Elon Musk, Reid Hoffman, Angela Ahrendts, and more.)

Lisa Cook on Racism, Patents, and Black Entrepreneurship. EconTalk podcast episode, September 2020.

How much has racism held back the U.S. economy? What would the country look like today if Black entrepreneurs and inventors had been welcomed and encouraged over the past century and a half? Economist Lisa Cook of Michigan State University talks with EconTalk host Russ Roberts about her research into the impact of racism, lynching, and segregation on Black inventors and entrepreneurs.

Amy Willis, Was Osama bin Laden an Entrepreneur? EconTalk Extra, January 2021.

If we want to combat violence in the world, what’s the best way to go about it? Perhaps thinking of people like Pablo EscobarJoseph Kony, and Osama Bin Laden as criminals is insufficient. What if we were to think of them instead as entrepreneurs? What if we assessed their actions and organization as a venture capitalist, rather than a politician or soldier?

Abdallah on Hair and Running a Small Business. EconTalk podcast episode, December 2013.

Wafaya Abdallah of Oasis Hair Salon in Rockville, Maryland talks with EconTalk host Russ Roberts about the challenges and rewards of running a small business. Abdallah discusses her career path from would-be lawyer to owning her own salon with many employees and a management style that is different from the traditional one in her business. She discusses the economics of hair-cutting, how she motivates her employees to be part of the team, the openness of the salon’s financial situation, the educational training she offers, and the ways she works with employees to motivate and inspire. You’ll also learn how much her scissors cost….

Amy Willis, Viva la Virtual Entrepreneurs. EconTalk Extra, July 2020.

You probably know someone who seems to lose themselves in virtual worlds. But how “unreal” are these virtual realities? In this episode, EconTalk host Russ Roberts welcomes game designer and Forte co-founder Josh Williams to talk about the development of real property rights and market economies in the virtual world of gaming.

Josh Luber on Sneakers, Sneakerheads, and the Second-hand Market. EconTalk podcast episode, January 2016.

How many pairs of sneakers do you own? Josh Luber of Campless and StockX talks with EconTalk host Russ Roberts about the world of sneakerheads–people passionate for collecting and trading sneakers. Each week people line up to buy classic sneaker models Nike re-releases. Luber has collected millions of transactions from Ebay on these sneakers and others and has analyzed the return to investing in various sneaker models. The conversation includes a discussion of how Nike has helped to create this market and Luber’s work creating a stock market for sneakers and other goods….

A Little History: Primary Sources and References

Essai sur la Nature du Commerce in Général (Essay on the Nature of Trade in General), by Richard Cantillon on Econlib. Tr. by Henry Higgs.

Intrigue, murder, posthumous plagiarism, citations by Adam Smith, rediscovery by William Stanley Jevons a century later, and a stunning work on entrepreneurial risk, money, foreign exchange, and banking from the 1700s—what more could one ask for from an 18th century economist? Richard Cantillon offers fascination for historians and economists as much in death as he did in life….

We’ve left Higgs’s translation intact; but note that his arcane translations of some words like “Undertaker” for “entrepreneur” obscured Cantillon’s apparent coining of the word “entrepreneur”—see Mark Casson’s article, Entrepreneurship, in the Concise Encyclopedia of Economics for more on this…. [Econlib Editor’s Notes]

Joseph Alois Schumpeter, biography from the Concise Encyclopedia of Economics

Schumpeter was among the first to lay out a clear concept of entrepreneurship. He distinguished inventions from the entrepreneur’s innovations. Schumpeter pointed out that entrepreneurs innovate, not just by figuring out how to use inventions, but also by introducing new means of production, new products, and new forms of organization. These innovations, he argued, take just as much skill and daring as does the process of invention….

Advanced Resources

Steven Horwitz, Competition and Entrepreneurship: The Fountainhead of the Contemporary Austrian School. Econlib, December 2020.

Kirzner makes clear the core of the book’s argument in the very first paragraph. He notes that he will offer a “theory of the market and the price system that differs in significant respects from the orthodox theory of price” (1). More specifically, he will explain his “dissatisfaction with the usual emphasis on equilibrium analysis, and… attempt to replace this emphasis by a fuller understanding of the operation of the market as a process” (1, emphasis in original).

Nathan Blecharczyk on AirBnB and the Sharing Economy. EconTalk podcast episode, September 2014.

Nathan Blecharczyk, co-founder and chief technology officer of Airbnb, talks with EconTalk host Russ Roberts about Airbnb, one of the earliest companies to use technology to allow individuals to share underused resources, and in the case of Airbnb, housing. Blecharczyk and Roberts discuss how a design conference and the Democratic National Convention got Airbnb started, how the company aligns incentives to overcome the trust problem of house-sharing, and the rise of technology and online social networks to make a new business model possible. Along the way, Blecharczyk gives his take on the role of luck vs. skill in entrepreneurial success and how Airbnb plans to expand its product offerings in the future.

Michael Munger on Permissionless Innovation. EconTalk podcast episode, October 2017.

Michael Munger of Duke University talks with EconTalk host Russ Roberts about permissionless innovation. Munger argues that the ability to innovate without permission is the most important concept of political economy. Munger defends this claim and explores the metaphor of emergent order as a dance, a metaphor coming from the German poet Schiller.

Arthur Diamond on Openness to Creative Destruction. EconTalk podcast episode, August 2019.

Arthur Diamond of the University of Nebraska at Omaha talks about his book, Openness to Creative Destruction, with EconTalk host Russ Roberts. Diamond sings the sometimes forgotten virtues of innovation and entrepreneurship and argues that they should be taught more prominently as a central part of economics.

An Orgy of Innovation, at Marginal Revolution University

Risk, Uncertainty, and Profit, by Frank Knight on Econlib.

The particular technical contribution to the theory of free enterprise which this essay purports to make is a fuller and more careful examination of the rôle of the entrepreneur or enterpriser, the recognized “central figure” of the system, and of the forces which fix the remuneration of his special function….

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