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

Chapter Nine: P31W: Enter the Entrepreneur! 214 As consumer sovereigns, we are spoiled by the entrepreneur middleman who almost always has what we need immediately on hand and who bears all the risk. If he serves us well, he’ll earn a profit. If he does not serve us well, we will mercilessly find someone who will! The best entrepreneurs will know our future needs even better than we know them ourselves. We don’t know what we are going to want, so how can the entrepreneur know? The answer is that entrepreneurs don’t know our individual needs, but rather they are able to estimate what a representative or average consumer will want. As many customers bring their wants and desires to the entrepreneurs, the fickleness of one consumer may be balanced out by a change in desire of another. They never need to sell you a particular good or service; they just need to be able to sell it to somebody. And because of our understanding of the conceptual tool of marginal utility driving the demand curve, we know (and so do the entrepreneurs) that if they don’t exactly get the balance right, changes in price are likely to have the desired result (equate supply with demand). It would be incredibly expensive for us to preserve all of our options to meet possible future needs and desires if we had to buy everything we might want and stockpile for the possible contingency. Fortunately the social system of the market preserves our options at very low cost to us. The entrepreneur is willing to bear our risk and be the middleman—for a profit. The P31W was willing and able to bear risk for others. She expended resources (both labor and materials) in advance to make linen garments available for others. Merchants were supplied with sashes at their moment of need—they didn’t have to expend resources to preserve their options. They depended instead on a risk-bearing entrepreneur who could “smile at the future.” For her, a woman who feared the Lord, she could trust that the future would be kind to a hard-working entrepreneur who served her family, the poor, and others in the market place. As consumer sovereigns, we are spoiled by the entrepreneur middleman who almost always has what we need immediately on hand and who bears all the risk. ENTREPRENEURS BEARING UNCERTAINTY: COVID-19 The Spring of 2020 saw a pandemic emanating from China spread globally, with entrepreneurs across the world struggling to cope. Many business models were found not to be resistant to the virus, and a worldwide recession is ongoing as this 3rd edition is being updated. Entrepreneurs are adapting quickly, using new technologies (e.g., Zoom) and developing new business models (e.g., expanded home delivery). Covid-19 is wreaking havoc, but the entrepreneurs are battling hard on our behalf.