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Entrepreneurship is experimentation

yenom

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The entreprenuer's role is to bear the cost of creating the product, so he is entitled to get the profits of selling the product. There is no guareentee that the product will be accepted by the market and be successfully sold, so the entrepreneur has to deal with this uncertainty. The role of labor is to create the product, but the entrepreneur already pays labor money to create product(which means entrepreneur will lose money eitherway). He is taking the risk of bringing the product to the market, and whether he can make a profit or not remains an uncertainty. But it is certain he will bear loses from labor costs. To say labor is exploited is not entirely accurate, because there remains the possibility the product will be unsold and entrepreneur lose money to laborers.
 

FDG

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Most entrepreneurs take loans anyway, rather than risking their own capital.

Why? Because an larger entity (a venture capitalisit trust fund, for example) will necessarily be less risk averse than a single individual. It might even approach risk neutrality. So they will be able to bear much higher levels of uncertainty.
 

ptgatsby

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The entreprenuer's role is to bear the cost of creating the product, so he is entitled to get the profits of selling the product. There is no guareentee that the product will be accepted by the market and be successfully sold, so the entrepreneur has to deal with this uncertainty. The role of labor is to create the product, but the entrepreneur already pays labor money to create product(which means entrepreneur will lose money eitherway). He is taking the risk of bringing the product to the market, and whether he can make a profit or not remains an uncertainty. But it is certain he will bear loses from labor costs. To say labor is exploited is not entirely accurate, because there remains the possibility the product will be unsold and entrepreneur lose money to laborers.

Well, an entrepreneur doesn't have to "bring something to market" and doesn't mean he absolutely will "lose money either way", and I don't know what you are responding to regarding labor is "exploited" in this environment...

But this is why patents and copyrights - state enforced monopolies exist. Otherwise the products an entrepreneur creates can be almost immediately commodified, to the immediate benefit of society but at the cost of innovation.
 

yenom

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Well, an entrepreneur doesn't have to "bring something to market"

I don't understand what you are arguing about. If the entrepreneur does not sell his product in the market, how can he make a profit? The entreprenuer have to bear the uncertainty of the market, and how the market reacts to the product the entrepreneur or his business creates.
He has to experiment with the product to make it successful.

doesn't mean he absolutely will "lose money either way"

No cost running a business?

Otherwise the products an entrepreneur creates can be almost immediately commodified,

I agree with this. Once the competitor copies your product, your product becomes commodified.
 

yenom

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The whole problem with capitalism is that people won't create goods for free. People are motivated by money. Hence I blame the worker more than the capitalist. The capitalist gets his money selling the product from the market, and there is large uncertainty factor to all this. If worker does not demand money in compensation for creating goods and services, than the capitalist does not have to be compelled to make a profit to pay back the workers. After all in the end workers just buy back the same shit he creates.
The whole irrational drive for profit starts from the worker, not the capitalist. The capitalist just plays along and take advantage of the system.
 

Il Morto Che Parla

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Most entrepreneurs take loans anyway, rather than risking their own capital.

Why? Because an larger entity (a venture capitalisit trust fund, for example) will necessarily be less risk averse than a single individual. It might even approach risk neutrality. So they will be able to bear much higher levels of uncertainty.

He would often have to put up collateral to get the loan, and also often be expected to invest at least some start up capital. Likewise he will later have to sacrifice consumption paying off the loan + interest (which is often usurious these days)
 

FDG

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He would often have to put up collateral to get the loan, and also often be expected to invest at least some start up capital. Likewise he will later have to sacrifice consumption paying off the loan + interest (which is often usurious these days)

Good point about the collateral, but if he's successful the business should pay much more than the interest, shouldn't it? (Not saying that it necessarily will, at all...)
 

KDude

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I suggest relocating to the wonderful land of Somalia, free of central government, worker's rights or unions, no floor on wages, and where all of your capital and experimentation is left to your own descretion and defense. It's an entrepeneur's wet dream.
 

ptgatsby

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I don't understand what you are arguing about.

Likewise - I didn't really know what you were getting at so I scatter shot as much as I could.

If the entrepreneur does not sell his product in the market, how can he make a profit?

By definition, an entrepreneur operates a business and has ownership (risk). Historically it has also meant speculator (buy low, sell high, middleman, trader, etc.) Colloquially (and primarily in the US) and the way you tend to use it, it means inventor and creator. In any case, depending on your definition and scope, market can be as simple as R&D or financial speculation, or it can be the full creation of a widget to bring to market. It could be a person who owns stock in a company, or a partnership, or a family running a restaurant. The definition is pretty broad and tends to be idealized.

The entreprenuer have to bear the uncertainty of the market, and how the market reacts to the product the entrepreneur or his business creates. He has to experiment with the product to make it successful.

Sure, like all businesses. He may bear financial risk, but this concept of a wild west entrepreneur with everyone on the line is very rare (and stupid). Most invest into a corporation or LLC, limiting their exposure. It's true that an unfortunate amount take loans guaranteed by personal assets, but many also get venture funds or other sources of money (giving away equity in the first, often higher commercial loans or government funding in the second). The point being that it is an active choice to take on risk and it scales at a very personal level.

No cost running a business?

This is akin to asking if there is "no cost to consume" (ie: to live); you said he would lose money either way, however he is spending money, not losing money. It's important to differentiate "losing" and "spending", just as it is important to differentiate "profit", "earning" and "making".

I agree with this. Once the competitor copies your product, your product becomes commodified.

Right, at which point he makes zero economic profit.

---

I'm presuming that the focus of your argument is about entitlement of his profit under a free market. He is, of course, as entitled to his profits as labor is to their labor, or other ventures (personal financial risk being irrelevant) like corporations/LLCs... which is to say, not absolutely. This is because society directly and indirectly supports his ability to profit from his ventures. Under a free market, all creations are quickly commodified* and society decided that patents and copyrights exist to allow him to profit from successful ventures. Likewise, a business is not taxed on income like labor allowing pass through, giving a tax shelter to their enterprises. In most countries, the workers are supported collectively, through education, medical care and safety nets. Governments tend to offer credits for types of development (namely R&D), as well as small enterprise benefits and preferred status. The list is pretty long, including legal structures and contract support.

The reasons for these is to support entrepreneurs who create value. There are a lot less incentives to repackaging a widget that is already around, but a lot more for innovative or niche items.

So, for the most part they are allowed to win big, but they also pay a portion of the winnings for the chance to play in a more favorable environment.

The whole problem with capitalism is that people won't create goods for free.

That's not a problem, that's a feature. The price mechanism is what moderates the creation (and selection) of goods. The price mechanism requires consumers to have limited resources (income) so that they signal their preferences. Likewise, the income (cost of labor) is a baseline cost of producing a widget (service), allowing allocation of successful production to available labor. If labor was free it would also have to be unlimited not to run into issues... unfortunately, we don't have a lack of scarcity quite yet.

OTOH, more media is produced on YouTube, for free, than I'll ever be able to watch. Non-monetary incentives can be more powerful than (reasonable) monetary incentives. People do indeed create for free.

---

* Of course there are exceptions, barriers of entry, market space, unstable equilibriums, etc. Apple is a good example; generally technically inferior but occupies a weird part of a market that can't be entrenched on easily because they occupied that space first.
 

Il Morto Che Parla

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I suggest relocating to the wonderful land of Somalia, free of central government, worker's rights or unions, no floor on wages, and where all of your capital and experimentation is left to your own descretion and defense.

lol, this is what I always say to extreme libertarians and anarchists.

some people have a good concept, but take it too far beyond what could ever work in practice.

comic-on-atlas.gif
 

Il Morto Che Parla

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Good point about the collateral, but if he's successful the business should pay much more than the interest, shouldn't it? (Not saying that it necessarily will, at all...)

Maybe. I think it depends on very specific circumstances. Generally I would say that for many start-ups, the chance of ending up on the street is very real, and they therefore deserve a risk premium. I know it from experience!

However I don't know who was questioning this, so I'm not sure what was the point of the OP. We don't live in North Korea and that premise is basically accepted by everyone.

Unless he was hoping to find a stray Marxist to have a 180 page theoretical debate with which will never be resolved because both have completely different unfalsifiable intuitions about the future, human nature, and the history of civilizations.
 
S

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The entreprenuer's role is to bear the cost of creating the product, so he is entitled to get the profits of selling the product. There is no guareentee that the product will be accepted by the market and be successfully sold, so the entrepreneur has to deal with this uncertainty.

yes, or rather more accurately, the role of entrepreneurship in society is to experiment.


as for the "blaming the labor" - that's BS - the cost of the labor exists because for them to survive and live in dignity (relatively to the social standards of what dignity means at the time), they need to pay for the labor and fruits of past entrepreneurship - more often then not the generations away from when the entrepreneur in the family line was involved, and yet that entrepreneur had every right to want the best to his/her children, and so did they to theirs, as do the laborers themselves. and by finding ways to secure that, eventually their children have a higher likelihood of gaining the capacity to afford the risks and be entrepreneurs themselves.

to address your larger point: a free society means both the free market and the right to unionize. it's a never ending and highly circumstantial balancing act.
 

Azure Flame

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The only people who have a problem with capitalism are those people who only see the emotional morality of an issue.

Sure, its greedy and "evil" to take advantage of a hurricane by selling generators for 500%... but you cannot deny the fact that greed has brought power to hurricane victims.

With that being said, most laborers are self entitled and taught to be that way in school, promised they'll get a good job based on their education and if they work hard.

Once you learn that your bosses are fallible humans too, you'll have a better grasp on how to take advantage of the situation and use it to your advantage. Entrepreneurship is true freedom.
 

Standuble

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I suggest relocating to the wonderful land of Somalia, free of central government, worker's rights or unions, no floor on wages, and where all of your capital and experimentation is left to your own descretion and defense. It's an entrepeneur's wet dream.

It would help if he had the wonders of a modern infrastructure and technology in order to do the "experimentation." Somalia is too backwards, does it even have an internet connection in that country? Plus unless he wants to live a despotic ENTJ wet dream where he modernises the country using slave labour and forms his own market to sell his goods he would need to pitch his goods to foreign markets so would need to extensively research the cultural climate of potential customer countries. Somalia would only help cut costs of production. Unfortunately a large number of competitors already use cheap labour through outsourcing.

The only people who have a problem with capitalism are those people who only see the emotional morality of an issue.

- Or people who are losing out due to unscruplous deals by others in the name of profit e.g. companies here in Europe who risk losing significant amounts of shares and suffering permamently damaged reputations due to their Beef suppliers using Horse meat without telling said companies who in turn mis-sold them as Beef.
-Or people who desire technologies, inventions or scientific discoveries to be made but which are not (if not deliberately suppressed) because there isn't much short-term profit or slightly lesser long-term profit as a consequence.
-Or people who are unhappy with environmental destruction caused by wasteful consumption of resources by a company - who have rationalised the inefficiency by convincing themselves that said issues are irrelevant or without consequence.
- Or people who run governments or organisations who face severe economic difficulties because banks fix interest rates and other activities.

All the above are different expressions of the capitalist dream. They are not limited to capitalism and not the sole outcomes of the system. But capitalism has profit as its sole goal and in its pure form does not care how you make it. Plenty of encouragement.
 

Il Morto Che Parla

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It would help if he had the wonders of a modern infrastructure and technology in order to do the "experimentation." Somalia is too backwards, does it even have an internet connection in that country?

Doesn't that just show what happens when you remove the state from economic development, thereby proving the point?

Put another way, has any developed country, become developed, using those policies?
 

Il Morto Che Parla

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The only people who have a problem with capitalism are those people who only see the emotional morality of an issue.

Sure, its greedy and "evil" to take advantage of a hurricane by selling generators for 500%... but you cannot deny the fact that greed has brought power to hurricane victims.

With that being said, most laborers are self entitled and taught to be that way in school, promised they'll get a good job based on their education and if they work hard.

Once you learn that your bosses are fallible humans too, you'll have a better grasp on how to take advantage of the situation and use it to your advantage. Entrepreneurship is true freedom.

I agree, but I don't think everybody who disagrees, is being emotional. A lot of them just think other systems are more efficient.

Also in that example, the state could have simply prohibited them from raising prices so much, or facilitated transportation from other parts of the country at a normal price, and the hurricaine victims would have still got the power, but at 1/5 of the cost.

Not saying its right or wrong, but there is nothing "inevitable" about it.
 

Standuble

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Doesn't that just show what happens when you remove the state from economic development, thereby proving the point?

Put another way, has any developed country, become developed, using those policies?

I think you misunderstood a little what I was implying and ended up making a strawman. The only anarchist system I would see potential in would be a minarchist society with a techno-utopic, post-scarcity infrastructure. I would agree that a lack of government in a society with parameters short of these criteria would be a bad idea.

What I was saying was that an entrepreneur would not do well in such an environment as he would have to do extensive legwork outside of the desire to innovate in order to make it suitable. A place like Somalia would be better for a globalist company which can move in, seize power or install puppet leaders and impose an efficient clear top-down regime of technological industrialisation. Once this has taken place (and the country is pretty much an extension of the company itself) entrepreneurs working for the company can do the experimentation there. Stable, ordered entities has been the only way for chaotic, disordered entities to grow throughout human history. Perhaps that is true for everything, I would need to look into it
 

Il Morto Che Parla

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I think you misunderstood a little what I was implying and ended up making a strawman. The only anarchist system I would see potential in would be a minarchist society with a techno-utopic, post-scarcity infrastructure. I would agree that a lack of government in a society with parameters short of these criteria would be a bad idea.

Depends how optimistic you are about human nature.

I think you would have Somalia, with better technology.

It's not a perfect example, put the former Yugoslavia had decent infrastructure and economic development, but when the state imploded, collapsed into warring factions.

Also I can show you countries in South America, which produce enough food to feed their population 100 times, but where a weak state means that different governors run their provinces like feudal kingdoms, and most people are hungry while the small regional elite in each area took everything. Not because of scarcity, just because of breakdown of republican central state democratic authorities.
 

Standuble

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Depends how optimistic you are about human nature.

I think you would have Somalia, with better technology.

It's not a perfect example, put the former Yugoslavia had decent infrastructure and economic development, but when the state imploded, collapsed into warring factions.

Also I can show you countries in South America, which produce enough food to feed their population 100 times, but where a weak state means that different governors run their provinces like feudal kingdoms, and most people are hungry while the small regional elite in each area took everything. Not because of scarcity, just because of breakdown of republican central state democratic authorities.

I make the effort to be a bit objective regarding human nature (perhaps in part because it isn't my natural strength) so I don't think I'm overly optimistic.

My view on the issue is unfalsifiable as it needs cornucopia to function so any failed examples can be chalked up to not being cornucopian enough (or pie in the sky enough!) An interstellar civilisation with interstellar space flight would have both space and resources which eliminates those needs and minimalises the need to fight over it. Easy yet immense energy output powers technology and utilities to increase the carrying capacity. Nano-repair bots construct and maintain technology (powered by the previously mentioned high energy output) which allows a degree of communication and high standard of living to be maintained. Star-trek style replicators would eliminate the need for labour intensive agricultural plans. Providing all the above were abundant in a region (and accessible on the near individual level) then a loss of government would not necessarily cause a destructive vacuum as they are purely self-sufficient and there is less friction due to the aforementioned minimalisation of problems. It of course would not make conflict or war obsolete but inhibit it for the most part.

But this is all wild speculation on my part.
 

KDude

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It would help if he had the wonders of a modern infrastructure and technology in order to do the "experimentation..

Well, that flies in the face of libertarian chest beating about being self-made ubermenschen and whatnot. Infrastructure? What do they want next? Welfare checks?
 
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