ENTREPRENEURSHIP IN BUSINESS

By Assistant Professor OctavianDragomir Jora, Ph.D.

The Bucharest University of Economic Studies The Faculty of International Business and Economics The Applied Modern Languages Program 2013-2014

On method in economic science. Praxeology and two questions:
how much economics the entrepreneur needs to be aware of? and
how much economics do we need to be aware of the entrepreneur?
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LECTURES (I)
1) Introducing and organizing the course. (The enterprise of delivering
lectures about entrepreneurs)
2) On method in economic science. Praxeology and two questions: how
much economics the entrepreneur needs to be aware of? and how much
economics do we need to be aware of the entrepreneur?
3) The economic problem and the institution of private property rights.
Indices and indexes revealing the economic freedom of the world
4) Spiritual values and entrepreneurial spirit. Projection of a
documentary movie and debate upon it: The Call of the Entrepreneur
(2007)
5) Economic functions: the capitalist-entrepreneur, the administrator-
manager, the operative-technician, the public servant-bureaucrat. Division
of labour and social coordination
6) The entrepreneur as creator of firms. Economic calculation and limits
of business organizations. Small and medium entrepreneur versus business
magnates: small is beautiful, big is gorgeous. Course with invitee from the
Foreign Investors Council / Romanian Investors Council
7) Profits and losses. The problem of the business cycle
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LECTURES (II)
8) Entrepreneurship and competition. Factors (of production), (mass)
phenomena and football. Projection of a documentary movie and debate
upon it: Once in a Lifetime: The Extraordinary Story of the New York
Cosmos (2006)
9) Entrepreneurs across cultures: a sincere geography of the history of
some modern entrepreneurs
10) Entrepreneurs in socialism, entrepreneurs in transition, entrepreneurs
in kapitalism. Screening the entrepreneurial behaviours in Central and
Eastern Europe. Course with invitee from ECE business environment
11) Knowledge economy, green economy, inclusive economy and the
entrepreneur
12) Entrepreneurship and sustainable development. Institutions and
instruments of the long run
13) Entrepreneurs of Romania. Mass media and political ideologies.
Between the divinization and diablization of the business person
14) Concluding course. (Recap and preparing for the exam)
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A POINT TO BEGIN WITH
MAN ACTS.
ENTREPRENEURS ARE MEN.
ENTREPRENEURS ACT.

WHAT IS THE PROPER WAY TO STUDY
HUMAN ACTION?
WHAT IS THE PROPER WAY TO STUDY
ENTREPRENEURSHIP?

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ENTREPRENEURSHIP IS NOT a
SCIENCE., but Economics is!
ENTREPRENEURSHIP is about ANTICIPATING the FUTURE, INNOVATING so
as to welcome it properly, and taking its specific RISKS.
There is no such thing as a pure SCIENCE OF THE FUTURE available for the
anticipating entrepreneur.
But there are social/economic FUNDAMENTAL LAWS that apply equally in
the past, present of future, in any places, to any persons.
If disregarding them, the ENTREPRENEUR becomes from a rational BETting
MAN to a blind BATMAN.
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ECONOMIC COGNITION AND
HUMAN ACTION
Ludwig von Mises, Human Action. A Treatise on Economics (penultimate
paragraph):

Man's freedom to choose and to act is restricted in a threefold way.
There are first the physical laws to whose unfeeling absoluteness man must
adjust his conduct if he wants to live.
There are second the individual's innate constitutional characteristics and
dispositions and the operation of environmental factors; we know that they
influence both the choice of the ends and that of the means, although our
cognizance of the mode of their operation is rather vague.
There is finally the regularity of phenomena with regard to the
interconnectedness of means and ends, viz., the praxeological law as
distinct from the physical and from the physiological law.
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PRELIMINARIES TO THE PRAXEOLOGY
OF THE ENTREPRENEUR
Ludwig von Mises, Human Action. A Treatise on Economics (last paragraph):

The elucidation and the categorial and formal examination of this third
class of laws of the universe is the subject matter of praxeology and its
hitherto best-developed branch, economics. The body of economic
knowledge is an essential element in the structure of human civilization; it is
the foundation upon which modern industrialism and all the moral,
intellectual, technological, and therapeutical achievements of the last
centuries have been built. It rests with men whether they will make the
proper use of the rich treasure with which this knowledge provides them or
whether they will leave it unused. But if they fail to take the best advantage
of it and disregard its teachings and warnings, they will not annul economics;
they will stamp out society and the human race.
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THERE ARE three categories of
economic judgments (I)
THEORETICAL JUDGMENTS

HISTORICAL JUDGMENTS

ENTREPRENEURIAL JUDGMENTS

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THERE ARE three categories of
economic judgments (II)
THEORETICAL JUDGMENTS are the general, or generally valid, ones, whose
validity is independent of places, times and persons.
They capture aspects of realitys consistency, of the order and rational
intelligibility of reality, without which no scientific and knowledge
approach, in general, would make sense.
In economics, this role is played by praxeological judgments.

E.g.: if the price of oil increases, ceteris paribus, the demand (quantity demanded) for it
decreases. Or, counterfactually: if the price of oil increases, the demand (quantity demanded)
for it will be lower than otherwise (than it would have been in the absence of price increase).
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THERE ARE three categories of
economic judgments (III)
HISTORICAL JUDGMENTS are those that pertain to particular circumstances
of place, time and persons from the past, be it the far or near one.
They are not independent of theory, but systematically rely on it.
They contain, however, an additional element of understanding,
Verstehen which concerns those aspects of past events which we are, in
no way, capable to relate, to or explain by, general rules or laws.
These require documentary evidence, one, of course, theoretically and
logically subject to criticism.

E.g.: in the 2008-2012 period the world price of oil was decisively influenced by the of tools
the U.S. monetary policy used in order to tackle the crisis.
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THERE ARE three categories of
economic judgments (IV)
ENTREPRENEURIAL JUDGMENTS are those concerning particular
circumstances of place, time and persons, but from the future.
Their main characteristic is that they are in no way scientific, they do not
involve an ex cathedra demonstration, defended with sufficient reasons.
They cannot be delivered simultaneously with the sufficient proof of their
validity.
The only such test for them is the market and it is an ex post factum test.
Only as far as the anticipated facts occur, the judgment is considered right.

E.g.: Tomorrow, the oil price will increase by X percent (I should buy cheaper today, to
speculate price spreads).
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THE LESSON
(CONCLUSION)
A realistic approach in economics must never divert from the basic features of
human actions reality. As such, it always has to take into account time,
uncertainty, scarcity, discriminate between the quest for theory and that for
historical account, asses the subjectivity of acting individuals. Thus, the natural
framework of human action requires severe constraints for the economist, methodologically;
his analytic audacity needs to be coerced by no more and no less than the mere reality.

Unable to screen properly the economic realm and to signal properly the right paths, push
both economics and economies in never-ending turbulences. Along with this, epidemical
relativism in finding due remedies, by recourse to trial and error experiments, leaves too
much room for undeservingly painful social engineering instead of clear-cut, tough,
but right myth-busting and real curing. The ultimate consequence of this drift is the
bureaucratic severance of the link between entrepreneurs and consumers.
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