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We Are All Entrepreneurs: Part I

September 2, 2019 6:11 pm A+ / A-

By Lic. Federico Esteban Herrera, Federalismo y Libertad.

Being an entrepreneur is often associated with being evil, greedy and cold-hearted, and is related to the willingness to do anything to increase sales and profits regardless of the consequences. This is a misleading view and needs to be clarified.

Etymologically, “enterprise” derives from the Latin verb “in prehendo-endi-ensum”, which means to discover, to see, to perceive, to realize, to seize something we have been unaware of before. This concept was embraced in several cultures; for instance, in the middle ages in France they would use this term to refer to someone who was carrying on an important task, related either to war or to constructions of public buildings; in Portugal, an “empreiteiro”, a definition that is still being used today, was a builder; in Spain, “empresa” was an insignia located in the shield of a knight that indicated the determination to perform a certain important action. Throughout the years the concept acquired its current meaning: the act of offering a given product or service, satisfying a need or desire, and obtaining a profit from it; but it is important to relate its significance to the definition of human action, to notmisinterpret it.

Any person who acts, considering his own goals and desires, and weighing costs and benefits, to modify his present and achieve his objectives in the future, is embracing a business action, thus, is being an entrepreneur. Not only is a person an entrepreneur when he sells something per se, but, in every action taken, his inherent capacity to deliberate between costs and benefits manifests itself. This innate ability to discern that humans have is studied in detail in Austrian economics, which studies the economy as it is shaped and structured by entrepreneurs’ actions – and, to use Mises’s phrase, with entrepreneurship as the “driving force of the economy”.

On the one hand, entrepreneurship is the pivot from which all economic theory revolves, and without which the economy could not be explained; on the other hand, economics is the science that studies the processes of creation and transmission of entrepreneurial knowledge and that analysis the system that communicates different human actions; in other words, economics studies entrepreneurship itself. Economics and human action are two sides of the same coin and are far more related than commonly known.

Human action involves the search for the best ways to achieve our goals, by analyzing benefits and costs, which are studied carefully in a subjective manner, and which, independently of the situation that is being analyzed, are present on an everyday basis. For instance, when choosing what food to eat or what clothes to buy, we may consider how much we like it, how much it costs, how satisfying it is for us, and how best to proceed with the least amount of effort involved; when studying for an exam, we need to weight, while optimizing it, the time and effort spent studying instead of doing something else, against the, expected, good results and the long term benefits we may obtain; after such analyzes illustrated previously, one reaches a final decision and takes action.

Furthermore, human action is any deliberate behavior or conduct taken by a human being. From this point of view, dogs, for instance, do not act. Of course, we can see their happy faces as soon as we arrive home, but they have been doing this their entire existence. In contrast, we have changed our ways of acting and pursuing our ends while developing and improving our ways of living at an ever-faster pace. The only explanation for that is our capacity to act entrepreneurially.

In economics, to discover or to create are synonyms; that is, they both refer to the process of realizing something one was unaware of before, and proceeding, while being effective and efficient, to satisfy a given need or desire; and, at the same time, reducing the effort and time spent achieving a goal. Technology, for instance, is, probably, the best example of this process of creativity and discovery; it is reflected in a growing material standard of living and an ever more innovative technological amenities that are available to all of us, regardless of the social status. All of this captures the purest, most intimate essence of entrepreneurship. The misleading view that entrepreneurs are only those in charge of a company is fundamentally and essentially wrong and can sometimes be unproductive. We need to understand that every human is an entrepreneur because every one of us is looking to reduce costs and efforts as much as possible, while achieving, in the best possible way, our own objectives. Have it not been like this, we would still be in caves and dying at our twenties. To act is to be human, hence, to be entrepreneurs.

Continue reading “We Are All Entrepreneurs: Part II”

We Are All Entrepreneurs: Part I Reviewed by on . By Lic. Federico Esteban Herrera, Federalismo y Libertad. Being an entrepreneur is often associated with being evil, greedy and cold-hearted, and is related to By Lic. Federico Esteban Herrera, Federalismo y Libertad. Being an entrepreneur is often associated with being evil, greedy and cold-hearted, and is related to Rating: 0

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