 Good morning, ladies and gentlemen. The question, what is the function of the entrepreneur has been decisively settled already, so I could stop immediately, has been settled by the greatest economist of the 20th century, Ludwig von Mises. However, his insights have largely been ignored, and I think that's due to some contradictions to psychological and historical contradictions, which can be resolved based on Mises' insights, but largely appear before and after the lifespan of Ludwig von Mises himself. I'd like to start with history. I can only give you a very brief introduction for a more detailed narrative, which is quite fascinating. I have to refer to my book on the German language, Held in Schocken Visionäre. The Americans among you might know what is a Bushism. A Bushism is a funny line attributed to George W. Bush to prove his dim-wittedness. And one of those Bushism, probably wrongly attributed, is his line that the French don't even have a word for the entrepreneur. And of course the punchline is that it's a French word. In the English language, there used to be a word very similar to the French one, and the precise translation of the German Unternehmer, the undertaker. Yet in the end, it only meant a very peculiar entrepreneur, the provider of funeral services. And I think that shows that in history something has passed, and something has happened about the perception of the entrepreneur. Because if we look into this word, which has only survived in the French and the German, we find that it's a faulty translation. The English or German undertaker is a faulty translation of the French, and the French is a faulty translation of the Latin root, which goes back to Imprehendere. And Imprehendere has a very odd meaning. Some of those meanings are to sack and occupy a fortified place, or to seduce by means of trickery and conceit. That's odd, I mean it doesn't seem to have anything to do with the entrepreneur. But it seems to be heroic and confronting uncertainty in a certain case, and of course the language was coined to the feudal era. We've heard some about it, and not everything was as positive maybe as it was portrayed. Of course, one thing that's different is violence played a more recognized role, so to say, in daily life. And the earliest entrepreneurs seem to have been entrepreneurs of violence. Like the Italian condo theory, people gather in mercenaries, and fitting them with uniforms probably or arms, and providing those services. If you look back to all French dictionaries and encyclopedias, they usually use the term entrepreneurs synonymously with either a military hero, or someone who is providing construction services in the field of fortifications. Now, of course, this era was passed, but it was not a binary change. It was a more dynamic change in between the feudal structure, where of course not all entrepreneurship was of the military kind, but the most apparent and obvious, I mean, those who made the headlines and the cover pages and the magazines back in those days, tended to be those with the high status, who were in scalable businesses at the time, and that meant a scaling of violence or fortifications, and that needed a new quality of entrepreneurship in there. In between this feudal structure, something new emerged, beginning in the 17th, 18th, and then in the rest of Europe in the 19th century, and I would call it the bourgeois era. And the change was not very well received, because what the historical proponents of the historical school, the historicists, and the Marxists observed, and I think correctly so, is that the roots of the concept of the entrepreneur are quite violent. Whereas in the 19th century, it was possible to acquire status and wealth by being a gentleman merchant or gentleman entrepreneur, and this contrast was so stark that Werner Sombard famously attacked the entrepreneurs by saying, well, your roots are being pirates and bandits, and now you're weaklings and not even capable of using violence anymore, and it seemed like a failed class, which is sitting on its wealth. And of course, there was lack of economic understanding of the dynamic that happened there. Now, the understanding of the full entrepreneur is very much dominant in Schumpeter, and I think it's a reason why Schumpeter is much more famous for his theory of the entrepreneur. And I think there are two reasons. First is that he himself was a very futile personality. He once claimed that he has three ends in life. He wants to become the greatest economist of Vienna. He wants to become the greatest horseman of Vienna, and he wants to become the greatest womanizer of Vienna. And he claimed to have succeeded in two out of three. Now, it can't be the economist, but I think that's what he conceived to be. Now, on the other hand, in particular in Austria and all those late-coming industrialized countries, the interlink between the full order and the new entrepreneurial dynamic economic order was much closer. You had government grants which granted unlimited entrepreneurial freedom, but only for a certain class who owned, who got this patent. Most entrepreneurs in Austria were either outsiders, Jews and Protestants, or descendants of the full order because they had capital at their disposal, aristocrats and even bureaucrats. So, of course, that led to kind of reactions and counter reactions and determined the understanding of the term. Now, things changed, and the problem is that this bourgeois epoch, which was like a layer on the futile order that is superseded, in between these two layers something new emerged. And it has grown like a weed, I'd say, and I think it's a new kind of order. And this will have and has repercussions for the understanding of the entrepreneur. And I think maybe even the meaning might change as we've seen in history of the term. Let's look back into Mises' definition of the entrepreneur and how he understood him. He understood him quite in contrast to Schumpeter as a servant of the consumer who's following the orders of the market. And in a way he wanted to defend the entrepreneur because the odd thing is that the entrepreneur was blamed at the same time to produce too little weapons and to produce weapons at all. So he couldn't even make it right. And Mises just said, well, don't blame him if you are willing to pay for weapons. You'll get weapons if you're willing to pay more for milkshakes. You'll get milkshakes. The more responsibility lies with those who decide about the production structure. Schumpeter had a very different approach. He thought that the entrepreneur is motivated by overconfidence and the kind of narcissistic personality who wants to create a dynasty for himself. And in order to do so, he destroys the current structure. He kicks the economy out of the equilibrium in order to find a place for himself and his dynasty, his family and create some meaning for his position. I think economically it is his flaw, the idea. But there's some virtue to it in the psychological sense. And if we look at the whole context of who decides about the production order. Now Mises' definition is contingent on the idea of the market economy. And the market economy by Mises is explained as a market democracy. Now for our students of Professor Hoppe, it seems very odd to defend the market in the terms of it being a democracy. We would rather conclude otherwise. But he has a very specific understanding of democracy. It's for him, even in the political democracy, it's like an office that the voter has and he has a responsibility to use the vote to kick out incompetent people without the use of violence. And the same thing happens in the market economy. But much more perfectly and much more sustainably than political democracy is that you have one cent, one vote. And this vote of course should lead to incompetent, inefficient people being kicked out of their office. But there's another thing that's very important for the process of the market democracy. It's not just one cent, one vote. It's that there is an inherent dynamic which is put very well in the English saying of a fool and his money are soon to be parted. There's an inherent tendency that people with very short-sighted decisions and foolish decisions will in the long run run out of money and thus voting power. Thus the vote will shift towards the long-term oriented, sustainably and efficiently acting economic agents. And I think that's the precondition for a market order in the economy and that leads to a kind of moral praise for the entrepreneur because if he's within this structure then of course it makes sense to assume that the entrepreneur is the necessary agent of adopting the productive structures to the real preferences of the people and without the entrepreneur it wouldn't work at all. But of course I think it's a contingent definition. And I'm pretty sure Mises was right that in his times and in the United States of his times not everything of the production structure was decided by the one cent, one vote system but the larger extent of it. It means the production structure to the largest extent was decided upon by the individual decisions how much and what to spend your money on. If you consume, if you invest, if you hoard and what you consume and what you invest in. But there of course is the logical possibility that this extent might change, that the setting might change. And looking at the current data, my educated guess is that in the market economy we have passed a certain line and I think it's the 50% line that was passed in the political democracy before. What has happened in political democracy which was always meant to be like a long-term, sustainable process because you'd have short-term incompetent politicians but they'd be revealed by a transparency and then the vote will somehow assure that in the long-term people we get wiser and choose better leaders. It failed and it started obviously to be failing once the 50% mark was surpassed and the 50% mark is that now in all western democracies more than 50% of the electorate are direct dependents and beneficiaries of the state. Thus the political system has been overtaken by its employees and how has it done that by making the majority of the population employees of the state in a certain sense. And I think something similar has happened or is happening in the market economy. It's being taken over by the money creators by making a majority beneficiaries of money creation and then evidently the whole process that keeps the market economy healthy will not change overnight but it'll be a tendency, it'll be a tendency. It's like forces and that's why the 50% are important. Once you have more than 50% you know in which direction the force will push and what's the tendency will look like. And probably there'll be the tendency towards higher time preference as in the political economy and it's quite conceivable that the entrepreneur might change not entirely in its function but as the predominant function and those entrepreneurs that make it to the headlines and the cover pages might be a different type of function and people. And Mies has already recognized the possibility. He knew very well the fascist economy and he said well we need to think about maybe changing the term because they are still called entrepreneurs and they still formally have private property but it's the state which decides real price controls and quotas what and to which extent is produced. And then he suggested calling them not entrepreneurs anymore but betriebsführer operating officials. And probably we need to look for a new term maybe we could call it konsumführer or consumption officials and it's even conceivable that the entrepreneur not every entrepreneur but the strong tendency entrepreneur the apparent entrepreneur the prototype of the entrepreneur becomes an agent of distortion and destruction in particular capital destruction which of course is the essence of the market economies that avoid capital destruction with guaranteeing for a long term focus. Now I think the capital destruction is going on in the west it's been going on for a while but I think it's getting a new dynamic in particular if we have a more wider definition of capital which includes cultural capital and I think there's a great oversight of the importance of this invisible capital even for economic productivity so there might be dynamic processes which are not conspiracies I'm not very fond of the ideas that there's a very recent socialist conspiracy that it all makes break down I think there's a tendency going on and it's a tendency for capital consumption which is quite likeable not only to the electorate but to the population at large and if invisible capital is consumed all the better because you can live off things that have been created in the past without replenishing them that's only a tendency but it might explain some appearances and some recent appearances now when invest in Europe I look at recently created startups some of those are very impressive endeavours by young people who want to learn something or risk something but some of those endeavours are very odd to my understanding of entrepreneurship because what those do for example in Berlin the startup hub of Europe is first those kind of entrepreneurs fill out forums for the respective government's subsidy for entrepreneurship then they use the subsidy to rent an office and buy business cards and spend two or three years together as many eyeballs they can gather without providing anything a customer would pay for willingly just getting a traction of eyeballs and then they sell the ball of eyeballs to one overloaded corporation which has more cash and credit it can spend and that's an exit a quite successful exit usually on the other hand there's a cover page entrepreneur who has literally become a hero he's been turned into a superhero and if you look at this way of entrepreneurship it's quite odd I mean even given all the hype he can't produce a product with a profit with five billions or so subsidies the superhero might turn out a super crook so I'm doubtful if the term entrepreneur might still merit 100% certain more praise but there's still some praiseworthiness I see even in those very odd occurrences and I think it explains a certain reluctance to conclude out of this analysis kind of anti-capitalist stance or even anti-entrepreneurial stance and I think it's an aesthetic preference and I think at the heart of this aesthetic preference is the idea that it's more noble to be a pirate than a slave it's more noble to be a pirate than a slave because pirate usually is an agent of destruction but at least he's an agent he's active he's determining his destiny and he's using the means available and of course it makes quite a lot of sense and actually the idea was developed before by an economic historian called Baumol in the paper he said we have to look at the context and of course in some geographic and historic contexts the avenues, the ways that are available to reach status and wealth may be quite different so of course it might be more entrepreneurial sometimes to be a pirate and to take other ships than engage in trade the great achievement of the 19th century is that it was economically beneficial to people to turn from pirate to merchant because you can make much more wealth by trade than by destroying ships and getting destroyed in the process and looting but that's not necessarily so it might depend on the context what kind of activity is incentivized nowadays if you look at the production structure or the general structure in Europe and if you see a bridge built somewhere I'd say we've passed the point it's very less likely that the bridge is the outcome of the preferences of people in place A and B who somehow reveal few of the decisions that it's worth the cost to be better connected it's much more likely that this bridge will be a totem with some strange flag on it claiming people be grateful that there has been bestowed upon you this grace of the bridge by the great god of Brussels and much more likely a lot of the production structure and its relative weights are set by those factors outside of the pure economical so my prediction would be that we'll see probably a change in the perception of the entrepreneur once certain bubbles bust and certain superheroes will be perceived as super crooks in the end I think that the lines are not that clear-cut I don't believe that Elon Musk is a hero I don't really believe he's a crook I believe he's a visionary who is pragmatic and pursuing the means at his disposal and those means nowadays don't really favor serving the potential consumer or even the future consumer but more serving yourself and the political structure around you by taking those means available another example is a parallel field to the distorted economic structure where another kind of entrepreneurship emerges because it's outside of the official economic pattern and one example is someone who very aptly took the Monika Thread Pirate Roberts who was a young guy who created and ran one of the largest black markets on the internet of course it got busted in the end but if we look at that person and this kind of entrepreneurship and piracy I think it shows that the real types are very far from the ideal types in the sense of economic function to say or in the sense of an idealized entrepreneur like done by Ayn Rent Ayn Rent has the pirate in her book Rachna Dunn is killed and I think the fault with the character is that it's highly unlikely that the pirate just takes from evil people and gives to good people and he's this kind of Robin Hood creature I think psychologically it's unlikely I think it's a more of a gray area where we will expect people so the Thread Pirate Roberts I don't think he was a hero even though he's claimed some to be he was heroic in the sense of of course as every entrepreneur depending if he's a crook at heart heroic in the sense that he confronted uncertainty and so no matter what the context there will always be something heroic about the entrepreneurial endeavour to confront uncertainty and risk something in the game he was no crook neither Thread Pirate Roberts even though the state claims he most certainly was a crook he most certainly was a visionary and I think we'll see a dispersal of entrepreneurs into those maybe two or three groups and one group is like the entrepreneur of the front page and I guess if the process, the tendency is allowed to continue at one time we and students of Mises and Professor Hoppe might have a hard time defending those people just because they're entrepreneurs and the second realised thing we'll see arise a larger variety of entrepreneurs like in the Soviet Union where in the end 40% of all when your creation was done by unofficial people shouldn't even have existed there was no account for them of course they were no heroes some of them were crooks because it made it much easier to have access to the political structure but they played a role and there was still something heroic about their entrepreneurship and with the possible and potential collapse of the structure which hasn't had a name yet I don't think it's the market per se I think the market after passing the 50% line turns into a zombie market but it turns cannibalistic it's a kind of undead market and it's different I think it's a new epoch and what makes it complicated is this epoch it has antecedents very early on and it's always these three layers of the feudal order epoch and the bourgeois layer and the fiat money layer on top which started early with its early signals and was earliest maybe perceived in the British tradition that there's something new emerging and that's where the undertaker lost its meaning and the projector was used but usually in a negative sense of people trying to get rich quick by selling some foolish stuff to the population of course there was lack of economic understanding but at the same time perception of distortions going on and of course we understand those distortions now thanks to Mises that they were part of the business cycle but that explains so much more in the history of ideas and why the entrepreneur has been perceived rather negatively so my prediction might be that maybe the entrepreneur the term itself what we refer to as entrepreneurs may turn out to be the providers of the funeral service for the market economy thank you