Entrepreneurship, knowledge and employment

Uncertainty and rationality: approaches to the interpretation of an entrepreneurship

Kalmychkova Elena, Moscow State University

In classical economic theory, uncertainty is considered as a state of nature. R. Cantillon, J-B. Say and F. Knight believed that the entrepreneur always acts rationally and agrees to the uncertain profit that does not depend on the marginal productivity of factors. The XX c. introduced economists to irrational reality. J. Schumpeter puts forward the thesis that the entrepreneur is an innovator. He creates uncertainty himself as an opportunity to destroy the existing system and incorporates fundamentally new technology in business. For the “classical” entrepreneur the normal environment is a competition between all market participants, since an uncertainty is perceived “passively”, because all are equal. Information in this case is an active subject of purchase, since it could help to reduce the level of uncertainty and win the competition. For Schumpeter the normal environment is the monopoly, since the main goal of business is "struggle for the empire" due to the destruction of existing rules, the "active" use of uncertainty. In this case the information has no absolute value, since it depends on how and who will use it. W. Baumol in 2010 proposed the term "microeconomics of innovation". His model of the market is based on the co-existence of two types of entrepreneurs. One uses the standard tools. The other changes the rules himself due to establish the new ideas. That is how the innovations are born. Baumol does not abandon the idea to build a rational market model, but he proposed to make corrections for "rebels" as engines of a progress. At present, the rational model of entrepreneurship organization is seen in the works of the authors of industrial organization theory (model Samuelson – Nordhaus). Whereas the Schumpeterian model is typical for the evolution theory (K. Perez), can be traced in the works of A. Alchian, representatives of the Neo-Austrian and Stockholm business schools. So what is an entrepreneurship? Нow to build a working model of it?


Keywords: uncertainty, rationality, entrepreneurship, irrationality, innovator, competition, monopoly, information

Please Login in order to download this file