 So we're going to talk a little bit about entrepreneurship this morning and talk about how we got to where we are So the title is how entrepreneurs built the world Of course, just like that last time if you haven't already Follow me on Twitter Okay, that's an order Everything else is voluntary, but that's not Okay, so What is it that the entrepreneurs built? Well here are a couple of pictures that I wanted to show you that show the difference in the world so on the left you have Shanghai With only 20 years of difference going from not much at all to something that looks Futuristic and on the left you have Dubai Going from basically a desert to a modern city Of course, I'm going to talk about entrepreneurship and the market and you might think that while communist China Dubai might not be super free markets and that's correct But I wanted to showcase what is possible by simply doing production and using resources in the right way right, so I'll limit this discussion a little bit not talking about Communism and how communism is great and how communism creates a lot because it doesn't Through the state, we don't actually get anything new they don't create value. They only reallocate value at best If it's really successful, we get to plus minus zero Entrepreneurship is about creating value and creating opportunities for us all so I'll leave that discussion about planning investments estate investments and regulations to a separate discussion that we can have later on if you wish and I've also Written a book on this showing the difference between the market process itself as an entrepreneurial driven process of creation and then adding regulations to it to see what are the actual true costs of regulations if you Google Well, my name I guess and and regulations you're gonna find a couple of speeches and things like that Why I argue that even libertarians don't really understand how destructive regulations are and that's what I show in that book so whenever you think that regulations suck and they destroy a lot of value Think again because it's even worse Okay, so let's get started Entrepreneurship we've already talked about it a couple of times and the first Dr. Klein's first lecture a couple of days ago was an entrepreneurship What entrepreneurship is and how Mises defines entrepreneurship as simply uncertain to bury Well, this type of entrepreneurship is sort of a broad definition that is a part of any action Right, so the world is changing around us. Everybody's taking actions Aiming for some and that they think is going to be valuable to them and everybody else is doing the same So you don't really know whether you're gonna be able to attain your own end And of course if you're producing for others, you don't know if anybody's gonna actually value what you're producing That's a huge problem. Well, we're not talking about all action. That's a little hard to Hard to analyze to begin with in specific cases. It's also not all action that creates Wealth and creates prosperity It's something more much more specific much more narrowly defined and we're gonna talk about that specific type of entrepreneurship that creates Much more wealth than simply acting because believe it or not even communist act, right? And they do not create wealth not a whole lot Sometimes they do for themselves, but that's just stealing from others okay, so this narrower case is what Mises refers to as the entrepreneur promoter and He has sort of a little bit of a vague definition of it, but that doesn't really matter We're gonna focus on what the promoters do and what defects they have in the economy overall Okay, so it's not just any action It's an action that is really disruptive and innovative and creative for the economy overall Okay, so if you look at what Mises writes about this, he talks about the promoter as the driving force of the market Now there are plenty of driving forces in human action and there's sort of varied a little bit He talks about entrepreneurship as the driving force of the market It talks about profit as the driving force of the market and he talks about the promoter as the driving force of the market Well, I would argue that it's he really means the promoter in all of these cases So it's not really different. He's just using different terms to show what he actually means What the what the core of this concept is? Okay, so the restlessness of the promoter he talks about here the unceasing innovation and improvement of the economy is The task of the promoter or rather whoever causes this stuff is a promoter, okay? Another way he puts this is that the promoters are those who are especially eager to profit from adjusting production to the expected changes in conditions, okay, so They have the quicker eye in the crowd and stuff like that That's doesn't really help us a whole lot, right? but the unceasing innovation and adjusting production that you've already heard of the about the capital structure and Production structure in the many stages and we'll get back to that And how the economy is so advanced and it's sort of directed towards people's future wants in some way Even though it's not planned and how could that happen? Okay, well the promoters are in engaged in this task of directing the whole production apparatus of the economy to create value for people in the future, which is a Difficult task to say the least. Okay, so if you take me's is then you have the unceasing innovation and improvement You have the pioneers of economic improvement He's also talking about how the main The main function of the promoter is To make the great adjustments of the economy, so it's not really tinkering in the edges It's not really you're looking. Oh, look at that. It's a little That chewing gum there is a little cheaper there and a little more expensive there So I'll just buy there and sell there that's sort of arbitrage. That's not really what he has in mind here He's not talking about just simple trade and simple spot-market profits or or being a day trader in the in the stock market and so forth He's talking about the great adjustments to production of production That's a fiscal thing right that's machines. Those are factories. Those are trucks Those are construction workers really manly stuff, right? So those great adjustments shifting production from one thing to a completely different thing is what the Promoters are involved in so let's add that to the list great adjustments of production Okay, so what the heck does it this all mean? Well It means that the promoter is something that is very different from other concepts of entrepreneurship. We already distinguished it from The entrepreneurship is simply uncertainty varying in any action well, the promoter is also different from Correcting errors as Israel Kersner would put it right. It's not about just reallocating Funds or resources from one end to the other Shifting back and forth a little bit tweaking the system making it a little more effective or efficient That's not really what we're talking about here It's not about correcting those in inefficiencies that are already in the economy It's also not about reallocating Resources that are already exist in between already existing production structures and production processes So it's also not Hayek's 1945 article where you see the pricing mechanism how how the pricing mechanism helps entrepreneurs do the right thing and choose the right materials Hayek talks about the pin the tin factory and the production of tin and how there's a Disaster that limits the output of tin in the world and entrepreneurs don't have to know this They just have to respond to the higher prices, right? So the entrepreneurship is sort of a responsive agent when prices change they go. Oh, that's too expensive for me I'm going to do something else or I'm going to choose a different material Well, of course from a necessity point of view is Why the heck did the new prices come from? The big question is not do people respond to price changes though. Yeah, of course they do But the question is why did the prices change and it's not the case that you don't have to know about the disaster in the tin mine Because you can just respond to prices. Someone has to jack up the freaking price to begin with Right that's someone. Why did they increase the price? But probably because they knew something about the disaster right very different Story so looking at the promoter. We disrupt the economy from within it's not really about disaster because that's where we started out with communism, right? Okay, so How does the promoter accomplish these these changes and change the economy and direct the The market process overall well luckman puts it like this that Everything is changing all the time right people's preferences are changing. We discover new resources. We discover new technologies We attempt new things even though most entrepreneurs fail most of the time We try in different combinations of capital, even though that sounds like you're playing you're you're playing with Lego blocks Right, the economy is a little more advanced. You're actually creating Lego blocks rather and it's talking about how The capital structure of the economy is constantly changing It's always dissolved and reformed and put in a diff together in a different shape It's not simply shifting resources from one production process to the next is building up new capital structures This is very different, right? Okay, so if that is the true Function of the entrepreneur which is the true function of the promoter Making the capital structure change Then how does that happen? Well We can create to recreate and direct productive capability through inventing or innovating well, which one do you think is of Interest to us here while we tend to focus on invention But invention is completely worthless in a sense because invention is just the idea. Okay, so This the standard distinction between invention and innovation is you can find that in Schumpeter, but others have I've said the same thing that the invention is the new idea and If you take a course in in entrepreneurship You will learn basically this first day that the idea does not really matter. It's the implementation that matters So the iPhone was not the first smartphone. There were plenty of smartphones before then It's just that they didn't implement the idea in a very good way. They didn't Position the idea position the product in a very good way. So consumers like I don't care Right the same thing with the tablet Most of you probably too young to remember that the tablet PC Which was basically an iPad But a much more powerful one based off of Windows XP. So some Microsoft innovation on Microsoft there. They're awesome at being Really bad at marketing So it didn't really sell at all and it was a complete flop. Well some ten years later Apple Innovates the iPad they didn't invent the iPad because the tablet was already in existence There are plenty of tablets before the iPad. They innovated the iPad that completely changed People's behavior and completely changed their perception of how it's useful. Right, so to innovate is Bringing an idea to market in a certain shape or form Making it valuable to your seem valuable to it's really speaking your language as a consumer Showing you how this can make your life better And we do that through creating value propositions, right? So we're proposing that this is of great value to you because this will satisfy a once that you might not even have known that you had but I'm presenting this good to you in the service and By using it you can using it use it in all these different ways, right? And that will make your life so much better off There's a reason there are like beautiful people in commercials because people want because they Transmit sort of a feeling so that you get you get the picture much more much sooner than you would if you only had ugly people in commercials Right, so it has more value to you can see the value more clearly. It's not about tricking you It's really about informing you what is possible, right? So this little cream here will make me look like Whoever is beautiful nowadays Right then and by by selling it like that you get a feeling. Oh, I should try that because I want to be beautiful too right, I think dr. Klein mentioned Clooney has the sort of the Peak beauty or something. I don't know. That's that's his problem All right, so how does this happen and how do we how do we deal with innovations? Well to draw from Schumpeter again and I do realize that this is the Mises Institute and Schumpeter sort of Austrian Right, but he was so schooled Austrian and his earlier works are definitely more Austrian than his later works So this is one of the first works the theory of economic development from 1911 or 12 So he was still sort of Austrian and then and he viewed the entrepreneur as sort of a heroic figure a pioneer almost like a Semi-god or something stepping into the economy and just shaking things up by creating value while he Identified that there are five ways that you can do this and completely disrupt the economy And one is to create new goods for consumers That's sort of an obvious one right we can we can think of many examples of this in other ways a new method of production So producing things in a very different way will Facilitate different types of products and make more products available to you and probably make them cheaper as well create new markets Which is breaking new ground from the point of view of the of the company could be taking an innovation from one industry Putting it in the next and disrupting that industry new source of supply finding a new oil well or maybe finding a new way of Take getting oil out of rock or whatever and my favorite than the most overlooked new organizations new type types of organizing production in an industry or in a firm or whatever right so very often what businesses do when they create new business models and new Ways of producing is simply organizing people and resources in a different matter So it's a super important way of disrupting the economy All right, so Schumpeter referred to these as new combinations all of these so you just create a new combinations again it sounds like playing with Lego and That's not really what we're doing here these new combinations could be completely new types of of Machines new types of factors new types of logistics like Amazon for instance things like that those are new combinations of resources so it is creation even though it looks like it's sort of Simple, but it's not really okay, so these new combinations They first facilitate in different ways new consumer value, so it creates a means to satisfy ends and wants in a better way or To satisfy wants that we're not satisfied before well that is value I can even make your talks about how value is the satisfying of a wants that you had But that's that's why value comes out of consumption and that means a production are value valuable because we're expected to contribute to this consumption right so What we have then is when we're talking about Interest rates like I think Dr. Rittenauer talked about yesterday and How interest rates shape? investments in production and so forth well the savings rate Which determines the interest rates? really determines the rate of Innovations undertaking it doesn't mean that lower interest rate means that we get better innovations We could just get more innovations. So more innovations Will appear profitable to entrepreneurs and they will go ahead with it if the interest rate is lower okay, but of course they will go for the The biggest most valuable one first because that's that's the one that gives them greater profit Which is exactly what the promoter does right? It's Going for the profits okay, so What entrepreneurship does is the exercise kind of judgment and I think Dr. Klein mentioned this in his lecture too in Dedicating resources trying to figure out. How can we use all these resources? Maybe taking a few extra steps and building new types of machines or new types of Companies or new types of perceptions of goods or whatever it is To create greater satisfaction while the use imagination of what is possible that has not been done yet They use empathy so they're basically placing themselves in the in the shoes of consumers and putting themselves in their position saying well this would probably be a good thing to produce because It will make people's lives so much easier Right many many very successful disruptive goods are produced in this way right that they're new But they're intended to and they're focused on making people's lives better one way or the other Okay, and by doing this they direct factors right then we already talked about this By directing factors towards more highly valued ends. They're really increasing the value of those factors right so We know that factors are valued because of their contribution to satisfaction ultimately through consumption which means if you take Resources used over here for towards that end and you direct them to a new end over here that you perceive is going to be much more valuable Than the value of the factors increase too Right and the difference in the shifting is basically your profits okay, so let's get to the Hayekian Triangle because it's in the Capital structure that we find the promoter the entrepreneur shifting things back and forth and completely changing the shape and the one on the Right It's the one where we see we talked about this a number of times before this week where the interest rate Falls because people save more and that decreases consumer spending and then we get more investment And that is sort of extends the the triangle. It makes it longer, but shorter Okay. Well, how exactly does this work? How do we in insert an entrepreneur here to make this happen? Well, the problem is right there Right. There's one way thinking of okay. Well, we'll just push it down and we'll drag it out a little bit well, it has a Problem here that it's least physically speaking or in terms of entrepreneurship That is hardly ever mentioned and it is how we get to that point well, so if we Illustrate this very very simply then well, we can have cruise. Oh just catching fish with his hands Or he can think well, maybe I can produce a net and I can get more fish out of this while producing a net It needs to be inserted in the production process somehow, right? So If we take a more advanced production process The production of automobiles say we have production of automobiles like this where automobiles are made out of iron So they all rust very quickly So while we have the original factor land, then we have different stages of productions We have mining for iron ore We have smelting of the of the ore to get iron out of it Then we start producing automobiles out of that and then we have dealerships who make the automobiles available for consumers And then the consumer goes yeah, I can drive That's the value right? Okay, well, what if we would insert a promoter here saying that you know, there's a better way of doing this So we can produce automobiles Using steel it's much harder. It's not as soft It can protect from rusts much more easily, right? How do we do this? Well, it's not the case. We can just extend this we have to insert it Right, it has to be there Good big why because the production process is already complete, right? We go from original factor land to the lowest stage good Automobile in the hands of the consumer. We can't add anything before land There's no pre land that we can add to it Right, so we have to insert new stages within the production structure Right, so when we extend the triangle That's very macro in a sense, right? It's very abstract But what's actually happening is that someone needs to figure out a new way of either replacing a stage that we're already using We're inserting a new stage that makes the rest of the process much more valuable That's a much harder problem than just oh extend the triangle, right? Okay, so if you look at this then this is the triangle again the difference is that it's blue and white So if we innovate in this stage here just take this out of the triangle I'm sure if you can see this But there are different stages right there are six stages in this triangle Early and late stages and then producing out output The consumer goods at the right, right? So at the very left where the triangle begins you have the original factors land and labor and Then you're adding through one stage and then the next stage you're adding value in a sense You're getting closer and closer to the ultimate consumer good Well, if we take that second stage there So this is we need to figure out a new way of doing this That's the only way of changing this stage, right? So either we can insert one like we did with the steel Or we do it in a different way so we can increase output lower the cost increase the quality or whatever it is Right the value needs to increase or it doesn't make a difference And as dr. Herbner mentioned this has to be a longer process, right? We're already using the shortest process we can think of and we're going for longer processes with more steps Only if they are more valuable if they produce more output then Then we're gonna try it out, right? So how do we do that? Well, basically we're splitting this stage into several different Tasks or procedures or whatever it is. We might develop new new forms of capital new machines and and what have you, right? So we're taking this which is one stage traded in the marketplace and we're splitting it in the new way So in a sense, we're creating a new sub process. So we're replacing this one stage with a new type of of production Okay, well these are new combinations, right? and This has to fit within the production structure But since these are new a new process with new stages Internally in this stage the sub process what we're doing is really extending it this way Right because we have more Operations more tasks going on in this stage. So we're sort of extending that part of the triangle This looks a little ugly. It's not much of a triangle anymore Right, but the point is that this is actually really hard. Why because you can't just insert stuff Any way you like it rather it has to fit in this process that already exists right, so what that means is that You have to be compatible. So even if you have a new sub process You have to use the inputs already used in the economy Right, you have to buy the inputs from the first stage in this case And you have to sell the outputs used in the third stage So even if you have a new process it has to set have the same Interfaces in a sense as the previous stage that you're replacing And at the same time you have to create more value because otherwise it's just well, it's a failure Right, so you have to use compatible inputs and you have to produce compatible outputs Unless you're in the last stage and producing consumer goods because then you can produce a completely different type of good But you still have to use what is in the economy No one well, maybe someone but that would be the stupid someone Would create a completely new process from original factors to consumption good in a specialized economy Of course you would use the resources that are already out there But to the extent that you need new resources you have to create them And you probably need to educate people in this new way of doing things and so forth Well, it's there's another limitation and I refer to that as incompleteness that you have to cover the full distance right you have to Start with the inputs of that stage and you have to produce the outputs of that stage and You have to cover the whole distance you can't just stop halfway because no one is going to buy Whatever that is how I have finished something because there's no market for that right so What we have is in this formalized example you have a three stage production process where you have three tasks one two in three And you have this entrepreneur thinking hmm I think there's a better way of of producing whatever inputs are used in task three Using the outputs of task one I just use a very different type of process that refines It and pushes more goods through and lower costs so I can make a profit out of it And that is in itself a three stage process so I'll just call those tasks 21 22 and 23 and they're they have to be Done in that order Right, so I'll insert those. Well, obviously you can't insert those and just skip 22 because that's going to leave a gap Right. You also cannot skip 21 or 23. So those are Interdependent and they all have to be carried out in that order in order to make production proceed right Well for those tasks There are no market prices. You just invented this stuff Right. So you have to start with pricelessness Because no one is bidding for those resources because you just made them up basically Right. So prices might come later when others are copying what you're doing and trying to beat you at what you're doing This new type of process, right Then they will probably try to Bid for the people you have already trained by the machines that you are using and so forth But in the beginning when you are innovating Those new things that you create their price Then don't price by anyone right you can make something up Like that, but that's not really a market price. But you need competition for that So Only later on will you have those prices and then you can put it on the market, right? So you're in a sense producing this sub process Beyond the extent of the market because there are no prices that can guide you So that's that's how I how I define the firm and the role of the firm the function of the firm in the economy Implementing this new innovation is necessarily integrated, right? It's necessarily somewhere else and it relies on producing in pricelessness so I elaborate on that in in this book, which is available downstairs And online for those of you watching this stream Anyway, so what what promoters are doing is creating this new stuff and they have to rely on their own judgment in doing this Because there is nothing else they cannot rely on prices other than for inputs and the outputs that they Envision that they will be able to produce anything in between That's up to them They have to figure that out somehow Okay Now another way of putting the the triangle Is to use Rothbard's Diagram and this one confuses the hell out of my students every year when I teach Because apparently it's really hard to To read but we don't have to read it because we just have to see that there is a triangle in here Right That's all we need for now And then if we have in the second stage you have a promoter innovating again What is he doing? Well, he's really replacing that stage with a sub process Right different ways of producing so in this case four sub stages Obviously, what is whatever is changing hands between the first and the second sub stages Is it's not available in the market? There's no price Right because we just invented this stuff Okay so Entrepreneurship we know the drives Drives change it changes the capital structure and we saw that it just did right the capital structure is very different We changed how things are are done We are in a sense beyond the extent of the market the market will follow Hopefully if we're successful, but we're not there quite yet Okay, so in production Any of these existing stages an entrepreneur can enter and replace that stage with some other way of doing it So that we have the great adjustments to production We have how the promoter Dissolves and reforms the capital structure They create new capital and they accumulate more capital by creating new capital so that they can have this throughput of goods Uh, and they can they increase the quantity of goods in the production process thereby increasing our standard of living because that means more consumption goods at the end right so suddenly Figuring ah steel We can do we can produce steel. We don't have to use iron. Well You make that happen. You accumulate capital and smelting plant and whatever else else you need for a steel plant And then you start creating steel Which increases the value of the output further down in the production process because a car made out of steel Well, if we're right, it will be valued much more highly than the car made out of iron Well, obviously and the more easier to think about I guess example is to change consumption and consumption goods And as austrians, we know that the lion's share of the economy is really in production not in consumption But we're always exposed to consumption goods So it's easier to think about in terms of consumption goods well These promoters what they're doing is increasing the availability of already known goods As in the steel example there or you can have a new type of production that just increases out Outflow of goods the production of goods that increases the quantity at at lower cost Um, we can facilitate new value by creating new Types of goods and let's innovate right the a new value proposition a new type of business model the ipad is It's the example you used a minute ago, right? And this drives a social change too Entrepreneurship changes this society overall and our culture and how we lead our lives Okay, so let's look at a few examples. So First of all innovation doesn't have to be completely new in fact, it's usually not It's an improvement one way or the other and as we said innovation is the bringing to market Of some idea the implementation of it So this guy here innovates a round wheel Whereas the other guy with the square wheel is just complaining that This is not a new innovation. This is nothing new. I invented the square wheel already You're just improving on what I made Yeah, well the But that's not the point, right the square wheel would have pretty limited market value The round wheel would have a lot of market value. It's the same same invention the wheel Right, but very different Usability usefulness in the economy Okay, so here you have creative destruction In changing how we behave I mentioned The ipad already the smartphone is one of those ways we Consumers completely change how we behave and how we deal with things So how many of you just raised your hands are usually using one of those paper maps when you're When you're driving driving somewhere Opening it up Most people would just use their smartphone, right? And it will even tell you where to go like But that changes your behavior, right suddenly you have internet in your pocket and then you Or you can call people but you could do that before right, but you you have all these possibilities And it completely changes how people act and behave and how people hang out Right when I was a teenager No one has a cell phone Instead you had to in advance Come up with a time and place where to meet If the other guy did not show up If your date did not show up Is it because she's late is it because that she just stood you up or is this did something happen You have no idea you can't reach out either because the only way of reaching that person is to find a phone somewhere And then call their landline Right now when we're when we're meeting up with someone just say yeah, we'll we'll meet in in that city that day And we'll just we'll just text whenever Very different type of behavior, right? It creates different Consumptive behaviors as well So it changes How we behave as individuals and with each other so completely new behaviors It creates institutional change and the obvious example nowadays is uber versus taxi So Being a promoter doesn't mean just changing things to tweaking things a little bit But rather what uber did was saying wait a minute We can basically provide a taxi service just like a regular taxi service, but change it up a little bit But sell this comes something completely different So we can step outside of this regulated space where you have to Pay taxes and you have to do things these ways that politician tells you tells you It's a good way of running a taxi cab company Which is usually not the case Um, and then uber said well, why don't we just Skip that stuff and do it in a different way well That freaked politicians out because they had to regulate this new space. We're like, oh my god. It's unregulated We can't have people driving around and people traveling in cars So it's completely new what are we gonna do with this? But it also meant that it had to It expanded our options It made us realize that a regular taxi What kind of madness is that I don't know who's driving it That I don't know if it's a real one. I don't know if it's going to show up. It's usually a terrible ugly car in bad shape And it's overpriced Now we know that it's in my pocket I'll just I'll just I'll just get an uber Right, that's not what happened before Then you had to find a landline and call a taxi cab company and they would tell you whether you would get one or not and when Okay, so it changes what politicians have to react to this new reality when when entrepreneurs change the way society works Okay, it's also It facilitates new types of transactions And one is of course the sharing economy and everybody's sharing everything online I think you're all you've all used those things Sharing of underwear and I don't know what But that cuts out the middleman and and and it changes how we deal with things Right, but it's it's not only through it's not the technology. It's not the invention itself It's not the technology in in your smartphone that That is the deal here It's really that it facilitates new types of transaction You can find other people and and you can pay them a small amount of money to live in their houses In their house for a night or two That that changes things because you couldn't find them before you had no clue that they were actually offering their house It's not the technology the sears catalog is an example of this People were dependent on their local store. That was one local store If you wanted something you went to the store if they didn't have it you Maybe you could ask them to order one for you But those were the prices. That was it the sears catalog Combined and and put together producers and consumers in a different way suddenly had Millions of goods available that were not in the store So they sidestepped the store and changed the complete changed the economic Landscape changed how people interact and how people transact okay So we get new behaviors and entrepreneurs have to deal with this they have to Create these new behaviors and make sure that we understand what those new behaviors are that what the possibilities that we can get Out of these goods that they're offering They're not offering the the thing itself the thing is doesn't that's really matter. What matters is The whole experience So how does this change our lives? That's the subjective valuation of the whole package. It's the the price. It's the advertising. It's the service It's whatever else they can Make up that would be of value to consumers. That's what they're doing. They're changing people's behaviors And how do you do that? Well, I use this slide in my previous presentation too Because consumers don't know how they want to change their behavior We don't know how we will react to a new type of good And this non quote by henry ford How do you actually ask people what are what is it you want? Let me I'm like an innovator What type of stuff do you want? Well, they would have said faster horses because they only had a carriage and they had a horse, but it was a lace bastard so They want faster horses Well, Henry Ford was like that's that's nuts I'm not even gonna ask them. It doesn't matter because I have this vision I have I imagine that they would want to carriage without horses Or even better I'll put horse power in a little engine And then you can run around with your little carriage without a horse So he tried that right that changed people's behavior quite a bit you could say and it changed The structure of the economy too because you don't have as many stables today as you did before You don't have to produce a whole lot of hay for cars So it changed the whole economy with the ripple effects just disrupting everything and there's another guy also the dead white guy Who says something to the same effect? Right that focus groups We're not using focus groups in apple because asking people about stuff. They don't know anything about Like they don't know anything about it. That's the whole point So we'll just produce the good and then when they see it they go wow This is awesome, which means of course that you can fail quite a bit And Oh, here we go They have to offer offer a feeling offer the A sense of the value that people get out of these products Because people resist change people don't want change people want Whatever they know already new stuff is terrifying because It's uncertain So very often you have to offer a good deal in order to enter the marketplace and you have to start getting people to change their behaviors And this has been the case all along so this is a A photograph from a previous protest Where they protested this new technology that someone invented imagine if If you would have had no entrepreneurs or rather that you would have a democratic Economy you have this entrepreneur saying A wheel would be pretty cool and you have people saying no We already have feet man So no wheel. Well, why would we be today? Obviously, we would be pretty much nowhere or wherever we were born because we couldn't get out of there other than walking So they have to Challenge us and our behaviors. That's what entrepreneurs do They have to overcome for us They have to overcome our resistance to the newness That they're offering Okay, so They do this Through changing the capital structure like we saw before both within production structures and by producing new types of goods You need both And by doing that they are the driving force of the economy just as mises said Because they're changing not only the economy the only economy is just All this production that happens in order to give us the life that we we choose and the life that we prefer But they're directing capital and directing all our efforts as producers In order to bring about this new type of society Right, so they are in effect directing the economy hoping to make a profit We're all as consumer sovereign. So Either we take it. Yeah, I'll pay for it Or we don't and then they're out of business That's their job. They're just directing Whatever we might be able to get so the in conclusion then You might be too too young for the Jetsons, but The future Seems wonderful. There are basically no limitations to what is possible in the future As long as we let entrepreneurs create our tomorrow because that's what entrepreneurs are in the business of doing They are disrupting the economy. They're changing production And thereby creating whatever our lives are going to be like tomorrow Which out here is going to be a life with masks, but Entrepreneurs tend to create something that is of greater value to us. That's something that we choose voluntarily right, so Whenever you think of entrepreneurs and disruption It's not really about destroy destroying things like Schumpeter had it creative destruction, right? That's It's really about creating tomorrow creating a better tomorrow That's why why we need these entrepreneurs and that's why we need to let them figure out what works and let them fail Unless they fail, we're never going to figure out what people actually want. We would actually benefit people Okay, so i'll stop there and Here are links for those of you online Uh to my books in the store. Thank you very much