would wish to restrict the term “entrepreneur,”7 the man who undertakes risks, of which class the
most prominent, though not the only, species is the investor in joint stock companies.8 Fourth, at the
extreme degree of tenuity, is the entrepreneur who makes no profit. It might seem, indeed, as if this
class did not call for special treatment, as differing only in the amount, not in the kind of
remuneration. A fig tree which bears no fruit is not therefore a tree of a distinct species. The horse
which the Scotchman its owner had just trained to live upon a minimum, when the animal
unfortunately died, was not therefore a new variety of the equine genus, requiring mention in a
treatise on Natural History. However, as imposing theories have been connected with this last
category, it comes within the scope of the present inquiry.
As our aim in comparing definitions should be, as Sidgwick says, “far less to decide which
we ought to adopt than to apprehend the grounds on which each has commended itself to reflective
minds,”—the hunt for a definition being followed not so much for the sake of the quarry as of the
views which are incidentally presented,—let us go on to consider the principal propositions which
the several conceptions are adapted to bring under our notice. In this inquiry much assistance will
be obtained from a series of articles on cognate subjects in the Quarterly Journal of Economics,9
which forms a sort of economic symposium.
The first definition is particularly suited to inquiries in which the parties who are in the habit
of saving are contrasted as to their actions and interests with the parties who do not save,
approximately, the working classes. Specimens of such inquiry may be found in the fifth chapter of
Mill’s first book, and in Professor Taussig’s important article on “The Employer’s Place in
Distribution.”10 It sounds paradoxical to add that the classical conception is not particularly adapted
to illustrate the Ricardian theory of rent. But the definition of the capitalist above given is not easily
reconciled with the received representation, that the capitalist’s remuneration is equal to the number
of doses which he lays out, multiplied by the remuneration of the last dose, the ordinary rate of
profit. For, as Sidgwick argues, there is no adequate reason for expecting that “remuneration for
management” as well as interest should tend to be at the same rate for capitals of different sizes.11
Doubtless, the proposition is accurate enough to support the practical consequences which have been
deduced from it. But, while fully admitting this, one may still agree with Sidgwick that “even Mill’s
7. Quarterly Journal of Economics, Vol. VI (1892) p. 283; VII, p. 459 et seq.; XV, p. 77 et seq.
8. Compare Mangoldt, Unternehmergewinn, pp. 41-43. A person who does not work, “wie der stille
Gesellachafter, hort darum nicht auf, wahrer Unternebmer zu sein.” This type is the limiting case,
short of which the trouble of management in various degrees is combined with what Mr. Hawley
calls “the irksomeness of risk.” As Professor Taussig says, “The corporation of modern times
presents all possible varieties of the relation between active manager and idle investor. Nominally,
the stockholders are a group of associated active capitalists. Practically, they range from shrewd
managers to the most helpless of inactive investors.” Quarterly Journal ofEconomics, Vol. X (1895)
p. 83. Cp. Marshall, Principles of Economics, Book IV, chap. xii, §§8 and 9.
9. References to the series up to November, 1900, are given in the Quarterly Journal of Economic.,
Vol. XV, p. 75.
10. Quarterly Journal of Economics, Vol. X, p. 72.
11. Political Economy, 3d edition, Book II, chap. ix, §3. Cp. chap. ii, §8.