A:

For one, it wasn't Adam Smith. One person strangely overlooked in Smith's free market masterpiece, The Wealth of Nations, is the entrepreneur. This is because the term was actually coined by an admirer of Adam Smith's book. Entrepreneur is a French word coined by the economist Jean-Baptiste Say, and usually is translated as, "adventurer". Say studied Smith's book and, while agreeing on all points, found that the omission of enterprising businessmen was a serious flaw.

Say pointed out in his own writings that it was entrepreneurs who sought out inefficient uses of resources and capital and moved them into more productive, higher yield areas. Simply put, entrepreneurs seek opportunities for profit and, by doing so, create new markets and fresh opportunities. By constantly disrupting the balance of competition, entrepreneurs prevent monopolies from forming and create a wide diversity of products that keep consumers consuming and producers producing. In return for taking these risks, successful entrepreneurs like Bill Gates and Henry Ford reap fortunes far beyond those of normal agents in the economy.

Say put the focus on entrepreneurs because he was one. As a cotton manufacturer, he saw how an entrepreneur must be able to recognize opportunities and manage them effectively. Say's A Treatise on Political Economy, or the Production, Distribution, and Consumption of Wealth and his entrepreneur as an agent of change captured the imagination of many people. Thomas Jefferson read the English translation and tried to convince Say to teach in his new nation. Although Say never stepped foot on U.S. soil, his entrepreneurial outlook found a home in America, anyway. Combining Adam Smith's free market principles and Say's entrepreneurial call to arms, the U.S. went wholeheartedly into the industrial revolution and emerged with one of the strongest economies in the world.

To learn more about free markets and entrepreneurship, be sure to read our Economics Basics Tutorial.

This question was answered by Andrew Beattie.

RELATED FAQS
  1. How does an entrepreneur help the economy?

    Find out about how entrepreneurs play a fundamental role in capitalist economies by helping to coordinate resources and bearing ... Read Answer >>
  2. How does an entrepreneur pay taxes?

    Find out what kind of impact tax policy can have on entrepreneurship in the United States and why all economic agents have ... Read Answer >>
  3. Why do some economists consider entrepreneurship to be a factor of production?

    Find out if entrepreneurship should be considered a factor of production in economic models, and whether or not entrepreneurs ... Read Answer >>
  4. What is needed to be a successful entrepreneur?

    Discover how successful entrepreneurs succeed through passion, motivation and accepting failure. Learn about the qualities ... Read Answer >>
  5. What does the term 'invisible hand' refer to in the economy?

    Discover and understand the concept of the "invisible hand" as explained by Adam Smith, considered the founder of modern ... Read Answer >>
  6. What resources are available to an entrepreneur to raise capital?

    Learn how entrepreneurs can use various resources to raise capital and how each is beneficial throughout the different phases ... Read Answer >>
Related Articles
  1. Entrepreneurship

    The 5 Skills Every Entrepreneur Needs

    Understand what an entrepreneur is and the type of risk an entrepreneur faces. Learn about the five skills necessary to become a successful entrepreneur.
  2. Retirement

    On This Day In Finance: June 5 - The Birthday Of Adam Smith

    The birthday of Adam Smith.
  3. Entrepreneurship

    10 Characteristics Of Successful Entrepreneurs

    Do you have the qualities of a successful entrepreneur? Those who do tend to share these 10 traits.
  4. Entrepreneurship

    5 Good Habits Every Entrepreneur Needs

    Understand who an entrepreneur is and what an entrepreneur does. Learn about the 5 good habits that every entrepreneur should have.
  5. Investing Basics

    Entrepreneur Vs. Small Business Owner, Defined

    An entrepreneur is different from a small business owner, and requires a different temperament.
  6. Entrepreneurship

    The Real Risks Of Entrepreneurship

    Here are some ways you can try to reduce the risks associated with being an entrepreneur.
  7. Entrepreneurship

    Why, How, Where and When Entrepreneurs Make Money

    Why, how, where and when do entrepreneurs make money? Eleven stages or "terms" that entrepreneurs and their ventures go through on the road to success.
  8. Entrepreneurship

    Importance of Risk Management for Entrepreneurs

    Entrepreneurs - particularly new ones - often overlook risk management. Here are some ways to put a risk management plan in place.
  9. Entrepreneurship

    Top 6 Most Successful European Entrepreneurs

    Understand what makes European entrepreneurs successful. Learn about six European entrepreneurs who have found great success in terms of their net worth.
  10. Entrepreneurship

    5 Bad Habits Every Entrepreneur Should Avoid

    Learn how to avoid specific bad habits that plague entrepreneurs, such as failure to plan, bad associations and not keeping a good work-life balance.
RELATED TERMS
  1. Adam Smith

    An 18th-century philosopher and free-market economist famous ...
  2. Say's Law Of Markets

    An economic rule that says that production is the source of demand. ...
  3. Jean-Baptiste Say

    A French classical, liberal economist and scholar. Jean-Baptiste ...
  4. Angel Investor

    An investor who provides financial backing for small startups ...
  5. Love Money

    Seed money or capital given by family or friends to an entrepreneur ...
  6. Self-Interest

    Acting in the way that is most personally beneficial. Adam Smith, ...
Trading Center