The Pointy Headed Promoter
August 19, 2012 Leave a comment
[Cross-posted at Circle Bastiat]
In his writings on entrepreneurship ludwig von Mises distinguished the pure entrepreneurial function of judgmental decision-making under uncertainty with the flesh-and-blood entrepreneur of history, “those who are especially eager to profi t from adjusting production to the expected changes in conditions, those who have more initiative, more venturesomeness, and a quicker eye than the crowd, the pushing and promoting pioneers of economic improvement: (Human Action, Scholars Edition, p. 255). Mises suggests the term “promoter” for the latter, lamenting the fact that economists have used the term entrepreneur for both the praxeological category and the historical ideal type.
Of course, Mises’s suggestion didn’t catch on, and most commentators continue to confuse the two, and also to identify entrepreneurship exclusively with new companies (what Foss and I call the “startup bias” of entrepreneurship literature). A good example is today’s (funny) Dilbert, highlighting the fact that new business ventures often fail and that firm founders work a lot of hours and aren’t always nice guys (ahem).