 So I've always wanted to be a man who needs no introduction, and I've been told I'm not getting one, so I'm I'm Peter Klein It's a pleasure to talk to you this afternoon about entrepreneurship I especially appreciate giving this talk on Monday of Mises you write the first full day of the conference Because that's a good way. I think to demonstrate that for Austrian economists Entrepreneurship is a very central topic, right? This is not just an application of economic theory that we'll cover later in the week when we get to the fun stuff Right entrepreneurship is something that is really very central to the Austrian analysis of markets and prices and Economic activity to see this if you look at Human action This is the index from human action You notice that the word entrepreneur and versions of the word entrepreneur Actually have quite a few page references in the index, you know by contrast look at look at equilibrium Which only gets a very small amount of space This isn't the full count I actually did a Accounted using the electronic edition of human action how many times the word entrepreneur or one of its derivatives appears and I counted 527 Concurrences now there's probably some electronic tool that would have just told me that but I actually went and counted I click next next next next so I might be a little off but But but Mises talks a lot about entrepreneurs And not just in the context of you know technology innovation, but as you can see in context of production and pricing and economic growth and so on so what did Mises mean by Entrepreneurship who is an entrepreneur in Mises analysis? Well, I think he's not only talking about small business owners. Sorry, Carmen He's not not not only talking about you know people who go on to start famous technology companies He's not talking only about street vendors in developing countries Nor is he talking about Individuals who are particularly skilled at getting taxpayer subsidies He really has something much more basic in mind listen to this passage from human action that I've always found very illuminating Mises writes it is impossible to eliminate the entrepreneur from the picture of a market economy The various complementary factors of production cannot come together spontaneously They need to be combined by the purpose of efforts of men aiming at certain ends and Motivated by their urge to improve their state of satisfaction in Eliminating the entrepreneur one eliminates the driving force of the whole market system So the entrepreneur is the driving force of the whole market system Right notice the language here Mises talks about factors of production which we've already discussed today the idea of Human actors employing scarce means to achieve their desired ends and in a modern Industrialized economy with a complex structure of production as dr. Garrison was discussing These things don't happen automatically Production doesn't happen on its own by magic. It happens as the result of the actions of particular individuals And these entrepreneurs are the agents who drive the market forward according to Mises So again notice that entrepreneurship is portrayed by Mises as a very general feature of the market economy Right entrepreneurship is not only about startups or self employment or tech companies though Of course entrepreneurship has a lot to say about those particular phenomena But in fact Entrepreneurship is really central to the Austrian understanding of the market now Roger Garrison gave a detailed and informative lecture about capital theory and so just to generalize a little bit from that discussion Think about the Austrian understanding of production Right, where do goods and services come from the things that are available to us to you know to purchase at the store today? Well production of course involves the transformation of inputs into outputs right the use of means to achieve particular ends and so we might distinguish between what Mises calls the original factors of production like land and labor and the intermediate or produced factors to production machines tools capital goods assemblies intermediate products and so forth and You know one of the things that is emphasized almost uniquely by the Austrian school is it production is hard Right there are lots and lots of ways that we can combine inputs into the production of particular outputs There's lots and lots of ways to make goods and services that consumers might desire and somebody's got to figure out Among all the possible complex combinations of inputs Right across time and space over time and so forth. How do we choose? What combinations to put in to practice? And like as I say Roger has already emphasized the sort of essential Insights from Austrian capital theory for example that production takes time Right that there is uncertainty involved in production and Roger sort of hinted at the Austrian concept of imputation and I'll elaborate on that in just a moment With the notions of marginal product and marginal revenue product But again key to an Austrian analysis is the idea that the future is uncertain Right, so when we begin the production of goods and services, we don't know exactly what market conditions will be like Once we're finished. Okay So imputation is a very famous Idea and economics associated with the Austrian school one of the great Contributions of the Austrian tradition as recognized even by those outside that tradition is the idea that the value of Goods and services used in production the value of the means that are used to produce goods and services are determined by the value of the ends That consumers The value that consumers place on those ends, right? The value of the means is determined by the value of the ends rather than the other way around as I think Joe Salerno was talking about or someone was talking about The labor theory of value right which gets the causation exactly backward, right? So what's what's marginal revenue product marginal revenue product is the amount of additional output That is produced by using one additional unit of input Right. So the marginal revenue product of an input is this marginal product Expressed in monetary terms Right. So the discounted marginal revenue product is the money revenue attributed or imputed To one service unit of a factor Discounted by the social rate of time preference i.e. the pure rate of interest Right. So what's the value in production of one more unit of labor? Well, it's the amount of additional output you get from employing that labor on the margin That's the marginal physical product Times the dollar value of that output on the market that gives you the marginal revenue product and Because production takes time when assessing You know your willingness to pay for those inputs at the start of production. You have to apply some kind of discount rate Because the revenues will not be received until after production is completed, right? So the discounted marginal revenue product of a of an input of one unit of an input, right? Establishes the entrepreneur's maximum willingness to pay for that input Okay, so if I'm thinking of employing an additional hours worth of labor of a particular type in production I'm thinking what does it cost me to? Employ that additional unit of labor that's the wage that I'm paying my employee per hour for example I compare that to the discounted present discounted value of the additional revenues I expect to receive from using that additional unit of labor Right, and I wouldn't pay more for the input than I expect to receive Notice the word expect is important here than I expect to receive in additional revenue discounted appropriately so if you can imagine multiple entrepreneurs bidding against each other for the use of Inputs in production We would imagine that you know if there were no uncertainty about the future if everyone knew exactly how many units of output that additional unit of input would produce and If everybody knew exactly how much consumers would be willing to pay for that additional output Then we would imagine that competitive bidding among entrepreneurs would bid the price of that input up to its discounted marginal revenue product Yeah, there's certain exceptions to that which we can talk about During the you know in office hours if you want some technical exceptions So what does this have to do with entrepreneurship? Well, what is the source of entrepreneurial profit and entrepreneurial loss? Well again, imagine a situation in which there is no uncertainty about the future Right, everybody knows what will happen tomorrow I'm producing some good or service I Employ a certain amount of inputs certain quantities of different inputs to produce that output And I know and everybody knows how much output that will give me tomorrow And what consumers will be willing to pay for that output on the market So imagine a kind of an equilibrium construction like the evenly rotating economy or ERE of Mises and Rothbard the ERE is meant to describe a world in which Everybody sort of repeats the same behavior day after day So I mean it's not static. There's like motion, but it's not really human action in Mises sense It's just people repeating the same It's like Groundhog Day or What was the Tom Cruise movie? Yeah edge of tomorrow It's like edge of tomorrow where you just wake up and relive the same day, you know exactly what's gonna happen There's no uncertainty. Okay, so in a world like that, right each factor of production would earn exactly its discounted marginal revenue product Owners of firms or owner managers if you like They'll receive some payment for the value of their services in management Right, so those of you who've studied economics right this think of this is sort of an opportunity cost Right if I'm if I'm the owner manager of the firm I wouldn't do so unless I get at least as much Excess revenue as I would earn if I just went to work for somebody else Okay, so to be a kind of equilibrium. I have to get paid my my opportunity wage Capitalists those who own resources and lend those out in advance of production will earn an interest return But nobody earns any profit Nor does anybody earn any losses Right because all the revenues that come in are paid out to fact to factors of production in implicit wages or in interest right, so businesses still exist and Revenues come in and expenditures go out, but there's nothing left over once all the factors have been paid There's no money left in the pot to be a residual profit Nor do revenues ever fall short of expectations because everybody knows exactly what's going to happen each day Of course, that's not our world Right, that's not the world that we live in So outside the evenly rotating economy in other words in the real world Entrepreneurs are competing for factors based on their knowledge and their beliefs about the present Right the state of technology productive capabilities the availability of resources and so on right So entrepreneurs have different beliefs about what you can actually produce if you use another unit of labor or of a particular type of Capital good or raw material right, but also and more important entrepreneurs have different beliefs about the future Right what will consumers be willing to pay for my stuff once I make it will they want my stuff at all Right, what will my competitors have done in the interim what will be going on with you know Tax policy or the business cycle or any number of things that could affect my revenues Right entrepreneurs have different beliefs or expectations about all of these conditions Right, so the result is profits and losses Okay, so companies like Apple and Samsung for example, which dominate the mobile phone industry when they came out when Apple came out with the The original iPhone and its successors and when Samsung became the most effective sort of imitator of the iPhone design and now Actually, Samsung is leading in many areas of innovation over Apple, right? These firms correctly anticipated that consumers would be willing to pay higher prices than they'd ever paid before for a mobile device Because of all these additional capabilities that that device would have Right whereas at the time that the iPhone and iPhone Clones began coming out the two dominant companies in the mobile phone industry were Blackberry and Nokia Right both of which are for all practical purposes gone from the market today Right, there's the one of the co CEOs of research in motion, which was the parent company of Blackberry famously said On seeing you know an iPhone for the first time something like Well, the only app anybody would ever need is a web browser And our device has a web browser So what's this whole app thing? What's an app? Who who cares about apps? Right, look, I mean, of course, it's easy in hindsight to say oh you idiot Right, but I mean at the time that this sort of new type of device was being introduced by Apple It was far from obvious that it would be a success, right? Apple had never been in the mobile telephony business It was not clear whether consumers would be willing to pay For all those extra features and of course you've probably seen these jokes about a Nokia phonia You can drop it out of a 20 story building and pick it up off the ground and it works, you know Nobody was sure that consumers would be okay with a very expensive and fragile device in their pocket What if you sit on it and it smashes or whatever? So in hindsight it turned out that that you know Steve Jobs and his associates They were correct in their anticipations of future market conditions most importantly consumer preference And the the decision makers at Blackberry and Nokia and so forth were not correct Right, so you earn profits when your anticipations are accurate relative to the actual future state of affairs You earn losses when the reverse is true Right, so remember to earn a profit entrepreneurs are trying to Underpay for factors what I mean is to acquire factors on the market at prices below What those factors will ultimately be revealed to be worth? And you earn losses when you overpay in the sense that you pay more for factors Than what the discounted marginal revenue product will eventually be revealed to be Okay, so the point is in the absence of uncertainty You don't have profit and loss profit and loss only exist under conditions of economic uncertainty So what then is entrepreneurship? Well, according to Mises The term entrepreneur as used by economic theory means acting man exclusively seen From the aspect of the uncertainty inherent in every action So we are acting as entrepreneurs When we are acting in the face of uncertainty And by the way, right Mises doesn't mean probabilistic risk He means uncertainty Some of you might be familiar with Frank night's famous distinction between risk or uncertainty risk and uncertainty or the version Put forth by Mises younger brother Richard von Mises Distinguishing case probability from class probability, but we're talking about true uncertainty here, right? So the term entrepreneur is used by economic theory When referring to acting man in the face of uncertainty Now you might say well, then isn't all human action entrepreneurial? And the answer would be yes, it is Right, all of us are acting as entrepreneurs when we get out of bed and go out, you know across the street every morning Because we don't know with certainty whether the you know, whether the means we employ Will achieve the ends that we desire But of course that might be a little bit too broad. That's why I call that entrepreneurship in the broad sense Right following Mises definition, but we might want to think about kind of a narrower sense of entrepreneurship sort of commercial Professional entrepreneurship the type that we might find more interesting and important for explaining the workings of the market economy Right, so this you know, what I consider to be entrepreneurship in the narrower sense is you know, the act of purposefully and deliberately combining and recombining productive factors In the pursuit of money profit okay as uh Ludwig Lachman Important austrian economist once put it we're living in a world of unexpected change i.e. uncertainty Hence capital combinations will be ever changing will be dissolved and reformed in this activity We find the real function of the entrepreneur In other words, the real function of the entrepreneur is the constant combining and recombining of heterogeneous capital resources In the pursuit of money profit and in an attempt to avoid money loss okay so again you know, you might say You know, I'm an entrepreneur when you know I get out of bed in the morning and I go across the street to buy a gallon of milk and I make it back to my home You know unscathed It's like oh, I've I've achieved ends that are greater than the value of the mean So it's like I've earned a profit. I mean, yeah, it's getting like a mental profit or a psychological profit You can you think of it that way, you know You know if I fall into a ditch on the way back and break my leg you say well, I earned a loss I mean that would be technically true, but probably not very interesting Right if you want to explain why the you know, us economy is growing and some other economy isn't My my decision to you know go to the store is probably not Really a big mover there, okay, but it's the decisions of you know, people like steve jobs and the former co CEOs of research in motion and so forth Their attempts to to earn monetary profit and to avoid monetary loss have a much greater impact On the on real economic conditions. Hence, we might be justified in restricting our attention to them Rather than me, you know trying to get a gallon of milk So because we're talking about money profit and money loss There's a critical role here played by economic calculation And uh salerno will have a talk tomorrow on economic calculation, which will not be as good as this but We'll give you a little bit of information may be useful so One way to think about entrepreneurship under uncertainty is with the concept of judgment judgment is a word that Was was Importantly used in the entrepreneurship literature by frank knight who was not an austrian economist, but a very important theorist of entrepreneurship And the same word is used by mesas To describe how the entrepreneur tries to conceive Of the uncertain future So one way to think about judgment is decision making under uncertainty Right trying to conceptualize what the future will be like without a formal model or a decision rule If any of you have studied formal decision theory Right, you can imagine an actor, you know with some choice and there's five possible outcomes And we know the probabilities of each outcome and so forth. That's not Making a decision under those circumstances is not judgment because you just you just use math Right to to tell you the optimal course of action. We're not talking about that We're talking about situations of much greater complexity and ambiguity Or the set of possible outcomes is unknown and maybe cannot even be enumerated or listed Much less can we assign mathematical probabilities to different outcomes Right, you know, you might call this intuition Or gut instinct, right? Sometimes you just know something or you're very confident in your belief About what's going to happen tomorrow or how something's going to play out You can't exactly articulate how you know it In words or in numbers, but you you feel very strongly About it. You have a kind of gut instinct, you know, the Germans as as they often do have a great word for this for stay in Right, which is usually rendered in English as understanding But that that that translation doesn't really do it justice. It's it's very sort of a deep understanding of a very fundamental understanding of something about the world Listen to how Mises describes the entrepreneur in a market economy Mises says again, this is in human action. He says the real entrepreneur is a speculator A man eager to utilize his opinion about the future structure of the market for business operations promising profits money profits This specific Anticipative understanding of the conditions of the uncertain future defies any rules and systematization Okay, you can't write it down in a formula, right? It can be neither taught nor learned The entrepreneur sees the past and present as other people do but he judges the future in a different way Okay, so according to Mises decisions by entrepreneurs about what resources to acquire How to combine factors of production in different ways in an attempt to produce different kinds of goods and services How to react to competitors how to anticipate policy change and so forth is part of a specific Anticipative understanding a kind of tacit intuitive and idiosyncratic set of beliefs Right that is sort of beyond the scope of formal analysis That's what it means to judge the future Uh, I wrote a book in 2012 a co-authored a book with nicolai fos called organizing entrepreneurial judgment That elaborates on this Excuse me. Misesian notion of judgment what it means to judge the future and what that implies for how businesses are organized I think you can get the book downstairs in paperback at a very reasonable price Um Central to uh, our treatment here is the notion that to to to engage in entrepreneurial judgment in in the sense that we're describing Requires the entrepreneur to take ownership of critical resources Right, so the entrepreneur is not just sort of a free floating agent Who's sort of outside the production process doesn't have to bear any risks right doesn't Have to doesn't have the risk of losing his capital. No the entrepreneur is a player Right, the entrepreneur is an investor and the entrepreneur is an owner Right what mises sometimes refers to as the capitalist entrepreneur as we'll see in just a moment The entrepreneur is also a capitalist And under conditions of uncertainty the capitalist is also an entrepreneur By the way, I have a another book called the capitalist and the entrepreneur Which you can also get downstairs at a even more reasonable price and you can get it online for free because it's open source Open access so You know, you often hear austrians talking about the market process The entrepreneurial market process. What is the entrepreneurial market process? This is the process of competition among entrepreneurs To acquire profit and to avoid loss Right in mises little book profit and loss, which I highly recommend He he's in a section talking about consumer sovereignty. He puts it this way If entrepreneurs fail to produce in the cheapest and best possible way Those commodities which the consumers are asking for most urgently They suffer losses and are finally eliminated from their entrepreneurial position Other men who know better how to serve the consumers replace them and so forth he's talking about sort of the uh You know the role of the consumer in determining what gets produced and how things are produced and so forth But this notion that you know, if you're an entrepreneur and you're not Using the resources under your control the resources you own and command In a way that is effective at satisfying The desires of participants in the market. You will lose your capital, right? You'll fail your earn losses You'll go bankrupt. You'll exit You'll be replaced by somebody who can do it even better. That is the process By which entrepreneurs drive the market forward okay, so Mises points out the of course, this is not true for government agencies Right, which are not subjects not subject to that kind of uh, market, consumer discipline even non-profit organizations are a little bit different And you might if you've seen this passage before you might recall that mises compares This sort of democracy of the market quote-unquote with political democracy And says this is way better, okay Because unlike elections, which are typically winner-take-all Right, everybody can win in the marketplace, right? We don't all consume the same type of breakfast cereal or wear the same brand of shirt or whatever Your your idiosyncratic tastes can also be accommodated in the market Unlike is the case with with winner-take-all elections. I just want to note as a footnote This is not the same thing as The convergence toward equilibrium, which is the way the term market process has also been used in the austrian literature I don't think that's what mises means by the market process It's not the process of equilibration in a particular market It's the process by which entrepreneurs compete against each other Over time some being more successful and earning profits others being less successful and earning losses and eventually having to exit Mises also uses uh, well mises points out in human action that This very abstract and formal notion of entrepreneurship that we've been discussing Can be a little confusing Because in ordinary english Not only in popular literature, but also in some of the academic literature People have used the word entrepreneur a little bit differently All right, so mises recognizes that economics also calls entrepreneurs Those who are especially eager to profit from adjusting production to expected changes and conditions Those who have more initiative more Venturesomeness and a quicker eye than the crowd the pushing and promoting pioneers of economic improvement In other words, not just every individual who performs this abstract function Of combining and recombining productive resources In an attempt to earn profit and avoid losses But people who are really good at it People who do it a lot People who are particularly successful People who are very innovative Maybe charismatic, you know, we think of steve jobs or or richard branson or even elon musk, right? I mean people who just seem to have this energy about them And they're particularly aggressive They're very Alert to changing conditions and so forth Mises essentially says Gee, it's too bad that we use the same word to describe those people As as we use to describe the very general abstract function of Arranging resources under uncertainty. Wouldn't it be nice if we had another word? And mises suggests the word promoter To describe these particularly charismatic and energetic and successful people Unfortunately that word didn't really take off, okay If you read the entrepreneurship literature today people are still using the word in both senses Which leads to a lot of confusion. I think But what we mises has in mind by a promoter is somebody who you know invest a lot Is a big player Right someone who's particularly alert very creative has leadership skills and so forth But notice this is not really a praxeological construct The promoter is a is a more loosely defined kind of historically contingent Concept, you know, than the pure functional entrepreneur of economic theory I may not be able to describe exactly what a promoter is, but I know one when I see one Where I can tell you looking in history and looking outside the window who meets that But part of the reason I bring this up is because I think even within the Austrian tradition There's some confusion between the pure functional entrepreneur And the notion of the promoter for example In the Austrian literature the most famous articulation of the entrepreneurial function is not Mises notion of uncertainty bearing and judgment, but rather israel kursner's notion of entrepreneurship as discovery So hayek wrote in a famous article called competition as a discovery procedure That competition in the market right is is important primarily as a discovery procedure whereby entrepreneurs constantly search for unexploited opportunities That can also be taken advantage of by others And so hayek is he's sort of riffing off off his famous 1945 article the use of knowledge in society And saying that in the real world knowledge, you know tacit knowledge is dispersed And not not everybody has all of the knowledge that would be necessary You're probably familiar with that as hayek's critique of central planning But so hayek says well under competition You have entrepreneurs who are competing against each other to discover the relevant knowledge That can be used in production And kursner sort of building upon this notion describes famously describes Entrepreneurship as alertness to changing and buying selling sorry alertness to changing buying and selling possibilities alertness to relevant new information Alertness to potentially worthwhile goals hitherto unnoticed As well as toward unnoticed potentially valuable alternative resources The entrepreneur notices a price discrepancy before others do So the entrepreneur and kursner's model is an agent who is particularly alert to changing market conditions Right who recognizes an opportunity to earn profit before other people do I mean, I certainly think there's an important element I think kursner is hitting at something That is important in an actual market economy Though I think this notion of the alert entrepreneur is much closer to mes's notion of the promoter Then mes's notion of the entrepreneur Strictly speaking an economic theory. In fact, I personally Uh getting on my soapbox a little bit here. I have some Some concerns with the discovery concept or the discovery metaphor As it's used in entrepreneurship in the entrepreneurship literature I mean one problem is that I don't think it's right to think of entrepreneurs Discovering things in the market rather entrepreneurs are creating new things Okay, so so people have said well if you look at a modern smartphone an iphone or whatever You know if you know What was the iphone just sort of out there waiting to be discovered If steve jobs hadn't done it somebody else would Right. Have you ever played that time machine game? You know, if I had a time machine, what would I do? You might want to go back and meet julia caeser But no, I would want to go back and make a lot of money, right? And so one way to do that is you know transport myself back to like 2004 2005 Right before the iphone has been introduced And do the rnd and go out and buy the materials and start selling iphone-ish things before apple ever goes into the market Right, you know, then I would be the bazillionaire Instead of steve jobs and people holding apple stock and so forth Right, and we often think that way because we think you know gosh If if apple hadn't come up with this innovation somebody else would have It was just out there all the money you can earn from selling ios devices was sort of sitting out there waiting for somebody to stumble upon it Okay, I get it. I mean I get the idea But I think that is in some sense a misleading way to think about what entrepreneurs do Because as I indicated a few slides back, you know, yeah in hindsight Gosh, why didn't I think of that? But at the time it was far from clear that making that kind of device was a good idea Right, so it wasn't that steve jobs discovered Prophets that were out there or that he discovered a device That anybody could have made no he took sort of the bold initiative To introduce something new to the market which might have succeeded which did succeed But at the time could have been successful could have been a colossal failure But of course steve jobs had many colossal failures like the next computer system Uh, the newton some of you old timers might know about or you could google it Um, so that's that's one problem. I think this notion leaves out It de-emphasizes the creative aspect of entrepreneurship and of course opportunity is a metaphor Right opportunities don't literally exist That's a that's a metaphorical term that we use x post To describe successful action Right. Oh, I'm glad I have the glad I have the opportunity Uh, you know to make that money literally opportunities The word opportunity literally refers to objective physical conditions Right, I'm I appreciate the opportunity to speak with you this afternoon I mean because I mean I literally have it There's like a podium here and a microphone and you're like sitting out there and they've locked the doors and all that right It's not quite the same thing as to say I discovered a profit opportunity that could be earned from selling iPhones Right, that's that's that's just a cognitive sort of tool that we use More practical problem is if we understand entrepreneurial profit as the result of successful discovery It becomes a lot more Difficult to explain entrepreneurial loss Okay, so if all the profits from selling ios devices Is understood by the fact that apple was quicker than other people to discover that those profits that could be earned What did research in motion in nokia do? Did they discover losses? What doesn't make sense. Did they discover failure? No I mean the way kerster describes it is he said well, you know, some people fail to discover Opportunities that other people see which is fine, but if you fail to discover something then you break even Right, you never invested you never tried so you didn't win anything but you didn't lose anything either Right, so to me the only way to understand profit and loss symmetrically is in terms of sort of investment under uncertainty Right, you lose money when you spend money You earn losses when you spend money on inputs and combine them to produce outputs that nobody wants By the time you've produced them. That's how you have losses, but you can't have loss with that investment So then entrepreneurship can't be discovery Because then there's no way to explain profits and losses symmetrically and of course again, I think You know entrepreneurs have to be have to be owners have to own something they have to put capital at risk They have to have skin in the game To earn a profit, which means there's also the possibility of loss just this little footnote on this had this interesting Conversation with Pete Bedke and some other people online about this point You know Kershner refers to what he calls the pure entrepreneur and he cites mesas as giving a description of the pure entrepreneur By citing the following passage this is page 254 of human action the scholars edition Let us try to think the imaginary construction of a pure entrepreneur to its ultimate logical consequences This entrepreneur does not own any capital The capital required for his entrepreneurial activities is lent to him by the capitalist in the form of money loans If he succeeds the net profit is his if he fails the loss must fall on the capitalists Sorry who have havee who have lent him the funds In other words mesas does seem to talk about some sort of abstract notion of a a moneyless entrepreneur An entrepreneur who invests no capital but just discovers sort of arbitrage opportunities and then reaps the profit The problem is if you keep reading the very next sentence of this passage is as follows This is mesas the very next sentence such an entrepreneur would in fact be an employee of the capitalists Who speculates on their account and takes a hundred percent share in the net profits without being concerned Without being concerned about the losses in other words this so-called pure entrepreneur is actually not an entrepreneur at all But just it's kind of like an agent working for the capitalists Or the capitalists say oh, hey go out and find some ideas and bring them to me And if I if I like them i'll invest in them and i'll pay you a finder's fee But you're not really an entrepreneur. You're just an employee or a contractor who helps the Investors the owners find good invest. You know places that they can invest their money a capitalist is always also virtually an entrepreneur and speculator Okay, so if you own productive assets under uncertainty You are by necessity an entrepreneur because there's no guaranteed Safe return for those investments if you have any doubt whatsoever about what i'm trying to get out with this distinction Go watch the scene from fargo original movie fargo Where jerry goes to his rich father-in-law wade And tries to get money for a deal some of you young people are looking at me blankly This is not the netflix series, but like the original movie the cohen brothers movie That that it's sort of a cult classic, but just look for the scene on youtube The the protagonist jerry has gotten himself into some kind of a jam where he owes a bunch of money to people He needs money And that's why he arranges to have his wife kidnapped Sort of their original plot device of the movie then things go sideways, but at one point in the movie He he has this idea for some kind of investment or some kind of a venture This is going to make him a lot of money solve all his problems So he goes to his wealthy father-in-law And tries to get money for the deal And of course the father-in-law wants to pay jerry a finder's fee For bringing the deal to the father-in-law and jerry's saying no no it's my deal You give me the money I make the investment and of course they laugh him off because we're not not going to give you money We're not a bank jerry if any of you remember the scene, but go watch it on youtube And if you want to see my debate with with bedki the great bedki climb debate of 2017 This was on liberty matters It's liberty matters discussion on kersner actually mario rizzo and frederick saute were also involved in this debate But forget about them You can see these issues sort of discussed in greater detail. Of course, I think I won easily So to conclude You know There is a there is a a vibrant research literature in entrepreneurship today That is not explicitly austrian, but is very sympathetic to austrian economic theory Okay, so they're entrepreneurship periodicals and lots of books and of course courses and seminars and so forth and you know, this mainstream entrepreneurship research literature and practitioner literature It's very austrian friendly Okay, so those of you students scholars who are interested in Finding new research topics You're interested in research projects that that Uh, you know with with which you can engage with uh, your fellow students and fellow professionals In academia. I think entrepreneurship is an excellent field of inquiry Right, so there are a lot of debates in that literature outstanding issues about what entrepreneurship really means How do we conceptualize the entrepreneur? Right, are entrepreneurs just self-employed people like like street vendors and small business owners? Are they innovators or is entrepreneurship something more fundamental? as mesas Would hold what's the relationship between You know what entrepreneurs do and the skill with which particular entrepreneurs do it And the successive business firms right firm growth profitability firm dynamics Innovation and so forth. What's the relationship between entrepreneurship as and economic growth? What should be public policy toward entrepreneurship? Do we need special government programs to encourage entrepreneurs to subsidize them to to train them and so forth? You can sort of anticipate what my answer might be But I think there's a lot of room for austrian economists and people interested in austrian economics to participate in these discussions And really to advance the modern entrepreneurship literature In the right direction. Thanks very much Thank you