In this article, I want to continue my discussion about entrepreneurship development. I will be talking about all that you need to know about the contributions of Richard Cantillon and Jean Baptiste Say to Entrepreneurship Development.
To earliest theories of entrepreneurship are of Richard Cantillon and Jean Baptiste Say. Both were 18tj century French economists. He argued that all entrepreneurs -merchants, financiers, farmers and artisans operate their enterprises at a risk by buying at a certain price and selling at an uncertain price.
He is regarded as the founder of the term entrepreneur. He explained that the person bearing risk (entrepreneur) is distinct from the person providing finance (capitalist).
He observes that entrepreneur plays a pivotal role in the development of the market economy.
Cantillon and Say belong to the Economic School Of Thought known as the ‘Physiocrat’ which concerned there economic analysis mainly on the physical aspect of an agrarian economy.
Cantillon wrote that there are those classes of people in an economy or society:
- The entrepreneur
- The landowners
- The workers
According to him, entrepreneurs were actors in the economy. They provide mainly commercial roles in the stages of production. Cantillon’s views were not considered by the earliest industrial economists probably because of the dominance of their thinking on land and agrarian economy.
Jean Baptiste also emphasised this difference between the entrepreneur and the person providing capital.
He distinguished between the profit of the entrepreneur who bears the risk and the interest paid to the provider of the capital.
Say described the entrepreneurial functions as that of combining various business resources, risk-taking and management.
According to him, the entrepreneur shifts economic resources from areas of lower productivity to areas of higher productivity and greater yield.
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