Friday, June 09, 2006

Entrepreneurs and 'Contractors'?

In my contribution to the discussion about Cantillon and Adam Smith in ‘comments’ on, I mentioned the differences in meaning in French and English for the word, ‘entrepreneur’.

A correspondent (‘CC’) asks: ‘Why aren't contractors entrepreneurs?’ To which I replied:

Good question. I didn’t stray into defining entrepreneur as used by modern economists because I assumed a common discourse on this subject in the thread.

Not all proprietors, owners of businesses and such like are entrepreneurs in the English language sense. Being one implies a certain ground breaking, above average, even very high, risk taking in new ventures of the kind that Schumpeter expressed as the ‘perennial gale of creative destruction’. These are the people who innovate, even revolutionise products, processes and markets, cross frontiers of technology and marketing, and who build businesses way beyond the aspirations (and more important, perhaps, the abilities) of the rest of us.

Many businesses are managed as routine, seldom changing, and administered by risk- averse type persons, who envisage little change in their market environment. Not all capitalists are entrepreneurs, which leaves the gaps and the room for those who are.

By ‘contractor’ is meant people like ‘haulage contractor’ or ‘building contractor’. They could be entrepreneurs, like the shipping owner who created the container industry in place of ‘loose’ cargo, or the founders of global courier companies, or the foudners of iPod and Apple computers, or Bill Gates of Microsoft.

‘Contractors’ in the French ‘entrepreneur’ sense could become entrepreneurs in the English sense – if they delivered a new service in their business sector not successfully applied before; for example, if one of them invested in a national network of self-haulage delivery branches (‘U-Move’?).

In early-mid 18th-century France, when Cantillon writing (and Adam Smith in 1748-52) these differences in meanings are important when we make assertions about their insights. My point is that we should be careful to transport modern terminology back 200-plus years and expect to have the necessary exactness for meaningful comparisons about their relevance today.


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