No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Nine: P31W: Enter the Entrepreneur! 202 INTRODUCTION Many people want to believe they have entrepreneurial traits, or at least they would like to have those traits. A daring risk-taker with strong initiative—these sound like features I’d like to say describe me, whether or not it matches reality. Not only does this word evoke images of who we’d like to be, but we often think about the results of entrepreneurs such as the late Steve Jobs of Apple Computer or Bill Gates of Microsoft. They seem to have had exciting lives making interesting things, and in the process, making a lot of money. That doesn’t sound too bad either. Perhaps this is why we prefer to focus on the entrepreneur as a person rather than thinking about how entrepreneurship is viewed in economics—as a function to be performed. ENTREPRENEURSHIP: THE ESSENCE OF THE MARKET PROCESS In the previous chapters we introduced supply and demand analysis for price searcher (monopoly and monopolistically competitive) and price taker (perfect competition) markets. These models assume that suppliers and demanders have the necessary information to assess their costs and benefits. In this equilibrium model, we can imagine that there is a fictional auctioneer who calls out prices and quantities, and settles all offers such that everyone can buy and sell at the same price. Unfortunately, while this model is very simple and relatively useful for understanding general economic realities, it is less useful in navigating the real economic world. The real world has uncertainty and passes through real time, and we require entrepreneurship to navigate these unknown waters. THE “DATING GAME” Imagine a world where you wanted to go on a date with an attractive member of your class. If you are a male, you may want to ask a certain young lady out. Likewise, if you are a female, you may want a particular male to know that you are available (but not too The real world has uncertainty and passes through real time, and we require entrepreneurship to navigate these unknown waters. En-tre-pre-neur noun 1. a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.