Organization of all resources in a single manufacturing process carried out by the entrepreneur.

The entrepreneur himself provides a special resource - entrepreneurial ability and has the right to count on entrepreneurial income, like other owners of resources on the corresponding income: wages, rent and interest.

Entrepreneurial income includes normal and economic profits.

In modern economic theory receiving economic profit associated with two main factors.:

• entrepreneurial risk;
• his monopoly power On the market.

It is necessary to reveal the influence of these factors on obtaining economic profit and show their fundamental differences.

In a dynamic economy, uncertainty factor and the future cannot be accurately predicted. Therefore, the entrepreneur takes the risk and responsibility for making decisions. Hence, part of economic profit can be considered as revenue per adoption this risk entrepreneur.

Distinguish between insured and non-insurable risks. Insured- these are the risks of fire, flood, accident, etc., against which you can insure by paying insurance premiums insurance companies. They cannot be considered a source of economic profit, since insurance payments only compensate for the damage caused by the insured event.

The source of economic profit is uninsurable risks- these are, first of all, risks associated with cyclical and structural changes in the economy as a whole, i.e. with the action of factors external to the entrepreneur(changes in government economic policy; inflation rate; unemployment rate; tastes, preferences and fashion of buyers; market conditions, etc.). In addition, uninsurable risks include risks associated with the entrepreneur's own initiative and dependent on it (introduction of new technology, renewal and expansion of the product range, development of new markets, etc.).

important source of economic profit is also the existence of markets imperfect competition, firms have monopoly market power. The monopolist can limit production and raise the price in order to obtain monopoly profit.

Monopoly market power allows the entrepreneur to reduce uncertainty and its consequences, since the monopolist and oligopolists largely control the market.

There are important socio-economic differences between the two reviewed sources of economic profit- the risk of the entrepreneur and monopoly market power.

When an entrepreneur assumes risks associated with the action of factors external to him or with his own initiative, he performs the functions necessary for society: he takes into account changes in the state of the economy, market conditions, fashion, demand for products; introduces new technology and progressive technology, improves the quality of products and expands their assortment, etc. The solution of these problems contributes to the development of the economy as a whole, to an increase in the standard of living of the population.

If an entrepreneur receives economic profit as a result of using his monopoly market power, limiting the volume of production and raising prices for products, then he performs functions that are negative for society, since as a result, resources are not distributed efficiently in the economy, unemployment and inflation increase, and the standard of living of the population decreases. .

Striving for maximum profit the main objective firms in action market mechanism. It has an impact on the distribution of resources, and on scientific and technological progress, and on the efficiency social production. However, one should not forget about negative impact the desire of firms to make a profit, especially in the conditions of the predominance of markets of imperfect competition, on the fairness of the distribution of income in society, on the state environment, the unemployment rate, etc. Therefore, the natural desire of firms for profit should be accompanied by the government's socially oriented economic policy.

The first three chapters laid the foundation upon which the rest of the presentation rests. First of all, we can now explain the origin of entrepreneurial profit, and so easily and naturally that I prefer to discuss some related but more difficult problems in the next chapter, where we will try to solve them in one fell swoop, and keep this chapter simple. and short. Entrepreneurial profit is the part of the funds that remains free after covering all costs (KostenuberschuB), free primarily from the point of view of the entrepreneur. As political economists have long argued, entrepreneurial profit is the difference between the income and expenses of the enterprise. Such a definition is, of course, superficial, but it may well serve as a starting point. By "expenses" (Ausgang) we mean here all expenses (Auslagen) of the entrepreneur, directly or indirectly connected with production. They include an appropriate remuneration to the entrepreneur for his work, and rent from a land plot possibly owned by him, and, finally, a risk premium. I also do not insist that interest on capital should be excluded from these costs. In reality, interest is either actually included in the costs, or - if the capital belongs to the entrepreneur himself - is charged to him in exactly the same way as remuneration for labor or rent from his land. This suits us all the more since many theorists fundamentally put interest on a par with salary and rent. I leave the reader of this chapter complete freedom of choice: whether to abstract from interest, as we do with many things, or, in the spirit of any theory of interest, recognize it as one of the three parts into which income is statically divided, and include it. in the costs of the enterprise. The essence of interest and its source do not interest us here at all.

With this definition of “costs”, it is not at all clear where the difference between revenue and costs comes from. To prove that it exists is our first task. Briefly, our conclusion can be formulated as follows: within the framework of the circuit, the total income - we leave aside monopoly profits - barely covers all costs. There are producers who have neither profit nor loss, and their income is management fees. Since the new combinations carried out in the process of development must inevitably be more profitable than the old ones, the gross income here exceeds the total income (Gesamterlos) obtained in a static economy, and therefore exceeds the costs.

As a mark of respect to Lauderdel, who first touched on this problem,2 we will begin, as he did, by considering the improvement of the production process, giving an ancient example of a loom, which is also good because Böhm-Bawerk3 analyzed it in detail. Many of the deeds of leaders modern economy, if not the vast majority of them, are very reminiscent of the introduction of the loom. Such events were most typical for the period at the turn of the 18th and 19th centuries, when they had a significant impact on economic theory. At that time, of course, the fundamentally different functions of an inventor and a person implementing inventions were in practice less separated from each other than they are now, and people like Arkwright were both inventors and practitioners.

In addition, they did not have our modern credit system at their disposal. However, I think that the reader will allow me not to go into further repetition and clarification and to present a detailed theoretical outline of the process in its purest form.

Suppose that in an economy where the textile industry is entirely based on manual labor, someone sees an opportunity to organize an enterprise using mechanical looms. Let us also assume that he feels in himself the strength to overcome all the innumerable obstacles and makes an appropriate decision. Then he first needs purchasing power. He receives it on credit from the bank and establishes an enterprise, and it is completely indifferent whether he himself designs looms or another enterprise does this on his order, and he confines himself to using them. If a worker with such a loom is able to produce daily six times more cloth than a weaver working by hand, then it is obvious that our enterprise will receive a profit in excess of costs, under the following three conditions. In the first place, the resulting increase in the supply of the product must not lower its price at all, or, if a decrease does occur, it must not be such as to equalize the value of the worker's daily product before and after the introduction of the machine. Secondly, the cost of operating the machine during the day must not exceed the daily wage of five workers, or at least be less than what remains, taking into account the probable decrease in the value of the product, and after excluding the day's wage of the worker. The third condition is formulated as an addition to the previous two. They mention the wages of a worker who maintains a loom, as well as wages and rent, which are integral part amounts used to pay for machines. What I meant at first was that these wages and rents remained the same as they were before the implementation of our entrepreneur's plan. If its demand is relatively small, then this assumption suits us quite well. If this is not the case, then the prices of the services of labor and land will rise in proportion to the new demand. The fact is that at first the rest of the textile enterprises quietly continue to work and the necessary means of production must be withdrawn somewhere else, which is achieved by offering a higher price. Our man must foresee and determine in advance what the rise in prices in the market for means of production will be that will follow his appearance on the scene. He will not only have to take into account in his calculations the dimensions that have existed so far wages and rent, and proceed in advance from their increase by the appropriate amount. It also reduces the entrepreneur's income. Only taking into account all these three circumstances, we can say whether the income exceeds the costs or not.

In practice, these conditions have been satisfied countless times. This indicates that they are, in principle, feasible, and, therefore, the income may exceed the costs6. Of course, it also happens that the conditions are not met. And when this is the case, then, if the forecast of all circumstances was correct, the enterprise does not arise at all, or, if it turned out to be erroneous, the enterprise will not generate income, but will incur losses. If all three conditions are met, then the excess of receipts (revenue) over costs, by virtue of the fact itself, is net income. Looms physically produce large quantity products than the services of labor and land embodied in them are able to produce under the former method of their use, which, under conditions of constant prices for products and means of production, would ensure further break-even production. In addition, these machines go to our economic entity - here we abstract from the possibility of patenting machines, since this case does not need explanation - obviously, according to the existing cost standards (zu Kostensatz). Hence there is a difference between revenue measured by prices, which were formed as the prices of a stable equilibrium of supply and demand in conditions of widespread use. manual labor, i.e., as the cost of production costs, and costs, which, per unit of output, are significantly lower for this enterprise than for all others. This difference does not necessarily have to disappear for the reason that our economic entity, by its supply and demand, will cause price changes. The latter is so obvious that at this point we can refrain from further specification.

But now the second act of the drama begins. The path is open, and, lured by profits, more and more new enterprises using mechanical looms are springing up. A complete reorganization of the industry is taking place: production is increasing, competition is unfolding, obsolete enterprises are being squeezed out, some workers may be laid off, etc. Below we will consider this process in more detail. Now we are only interested in one thing: end result there should be a new equilibrium at which prices will again equalize with costs, but at a different level. The price of the product will now be equal to the wages and rent for those services of labor and land which are contained in the looms, and for those which must be added to the looms to produce the product. Only when such an equilibrium is reached will the incentive to expand production disappear and the decline in prices caused by the increase in supply cease.

Consequently, the excess over costs received by our economic entity and its first followers disappears7. This happens, as a rule, not immediately, but after a more or less long period of time, during which this surplus gradually decreases8. Nevertheless, this excess is realized: under specific conditions, it forms, although temporary, but still net income. Who gets it? Obviously, to those economic entities that introduced looms into the economic cycle, and not just invented, created or used them. The one who made the machine to order will only receive a refund of his costs. Those who simply use it will at first pay such a high price for the machine that they will hardly make any profit. The profit will go to those economic entities, through whose efforts the looms were introduced; it does not matter whether they were engaged only in their production, or only in the operation, or both at once. In our example, the use of machine tools plays a major role, but in general this is not essential. The introduction is carried out through the establishment of new enterprises, and whether these enterprises produce a new product, or consume it, or both, is not so important. What is the contribution of our business entities to the implementation process? It is their will and activity: not specific goods, because they are bought - from others or from themselves - and not the purchasing power spent on acquiring these goods, because it is borrowed - from others or, if we suddenly want to take into account the results of past periods, again with themselves. And what did our business entities do? They did not accumulate any specific goods, did not create any primary means of production, but only used the existing ones in a different way, more expediently and profitably. They "carried out new combinations." They are entrepreneurs, and their profit, in excess of all liabilities, is entrepreneurial profit.

The introduction of the loom is a special case of the introduction of machines. The introduction of machines, in turn, is a special case of changes in the production process in the broadest sense, aimed at reducing unit costs and thus creating a difference between the old price of the product and the new unit costs. This also includes numerous innovations in the organization of the enterprise and all improvements in commercial combinations. For all these cases, you can repeat everything said above word for word. As an example organizational innovation let's call the emergence in the industry of large manufacturing enterprises which the national economy has not yet known. At such an enterprise, it is possible to place and use the elements of production more rationally than in small ones, and it is also better to locate the enterprise itself. But the emergence large enterprise associated with great difficulties. Under our assumptions, there are no conditions at all for this: there are no workers, qualified employees, much-needed market relations. In addition, there are many obstacles in the socio-political sphere. And the very creation of a hitherto unknown organization requires great talents. But if someone has what it takes to succeed in such a situation, and can get the necessary credit, he can produce and bring to market a unit of product at a lower cost, and if the three conditions we discussed above are met, he will receive the profit that will remain in his hands. But his success paved the way for others, setting a pattern for them to follow. They can and will follow him, at first singly, then in large numbers. The process of reorganization will begin again, as a result of which the surplus received by the entrepreneur in excess of costs must be eliminated as a result of the introduction of a new form of organization of the enterprise into the practice of circulation. But before that, a certain profit will be obtained. And here the economic entities only used the existing benefits more efficiently, implemented new combinations. They are -? entrepreneurs in our understanding, and their profit is entrepreneurial profit.

As an example of commercial combinations, we will name the choice of a new, cheaper source of obtaining a means of production, say, a source of raw materials. Previously, this source did not exist at all in the national economy. Let us assume that there were no direct and regular relations with the exporting country located across the ocean; there was no steamship line or postal service. Innovation is always associated with risk, most manufacturers do not dare to take it. But if anyone establishes an enterprise oriented towards a given source of raw material, if he is lucky, he will produce his products at a lower cost, while prices at first will generally remain the same. In this scenario, he will make a profit. With all this, he will put only his will and his labor into the matter and will carry out a new combination of the existing elements. He can again be called an entrepreneur, and his profit - entrepreneurial profit. And in this example, entrepreneurial profit and the entrepreneurial function itself disappear in the whirlpool of competition that overtakes it. The same can be said about the choice of new transport routes.

The same consequences as the improvement of the production process also have the replacement of one production good or object of enjoyment with a similar or close in properties, but less expensive. Let's name it as concrete examples partial replacement of wool with cotton in the last quarter of the 18th century, as well as the production of all kinds of substitutes. All of the above applies to these cases. True, here new products will no doubt not be sold at the same price as previously produced goods, but it is obvious that the difference between this example and the previous ones is only quantitative. In the rest, there is a complete similarity. Here we are also not interested in whether economic entities produce new production goods or objects of pleasure themselves, or whether they only use them or sell them, withdrawing them from their former areas of application for this. We emphasize that here, too, economic entities do not invest any benefits and any purchasing power in the business; from the realization of new combinations they make a profit, which is just as short-lived, and we again see them as entrepreneurs.

A slightly different case is the creation of a new good that better satisfies the needs that already existed and were satisfied before. A clear illustration of what has been said is the production of the best musical instruments in the presence of the worst. Here you can make a profit by selling best product at a higher price than the increased costs; this possibility is very real. It is not difficult to "adjust" our three conditions to this case, and we can safely leave it to the reader himself. If the production of new tools proves profitable, it is widely adopted, and the industry begins a process of reorganization that eventually re-establishes the rule of the law of cost. It is quite clear that here, too, there is a new combination of existing elements, entrepreneurial activity and - albeit temporarily - entrepreneurial profit. An example of a combination of better satisfaction of needs with a decrease in unit costs with a very rapid growth in demand is construction railways and channels.

Finding new markets where a given good has not yet taken root and where it is not produced has always been an extremely abundant, and in the past a very long-term source of entrepreneurial profit. An example is the most ordinary commercial profit, say, from the sale of glass beads to a Negro tribe. The essence of the matter is that here the buyer perceives the new good as a gift of nature or as a picture of an old master, that is, pricing occurs without taking into account production costs. We cannot predict at what height the price of this good will be established. But that is precisely why a good, torn out of its usual industrial and commercial relationships and transplanted into alien soil, can be sold at a price that so much exceeds the costs spent on its production. normal conditions the costs that all the difficulties associated with finding such a profitable market are more than paid off.

Only a few people see and use this opportunity at first. Here again we are dealing with entrepreneurial activity, the implementation of new combinations; this activity also generates entrepreneurial profit, which remains in the hands of the entrepreneur. Of course, the source sooner or later dries up. In modern conditions, an appropriate organization would have formed here very quickly, and the trade in glass beads would have ceased to be profitable.

Having considered this example, we have simultaneously explained what happens when an entirely new good is produced. First, it must be imposed on consumers, at least for free. There are many obstacles. But when they are overcome and consumers begin to show demand for this good, prices for it are directly formed for some time on the basis of consumer assessments. The costs, which here again consist of necessary services labor and land, accounted for by the old flails, are not of decisive importance in this case. This is where the surplus goes to the lucky producers. And again, these are entrepreneurs, who only by their will and activity carry out new combinations of existing production elements. Once again we are dealing with entrepreneurial profit, which disappears when a new good is introduced into the economic cycle and its price is brought into a normal ratio with costs.

In these examples, we have seen that, in essence, entrepreneurial profit is the result of the implementation of new combinations. They also showed us that the whole process is reduced to a new application of already existing productive goods. The entrepreneur does not save money to get the funds he needs; he does not store any goods before he starts production. The essence of the matter does not change from the fact that the establishment of an enterprise is not an act clearly defined in time, its formation can occur gradually, the enterprise in this case, as it were, develops from itself. If the implementation of the original plan has not completely absorbed all the energy of the entrepreneur, and if the latter, moreover, continues to manage his enterprise, he can set about putting into practice new changes, which in our terminology will be considered the second enterprise (business), often using funds from the entrepreneurial profits of the past. periods. The process looks somewhat different, but its essence remains the same.

What has been said above applies also to the case when a manufacturer establishes a new enterprise in his industry, without abandoning the use of old production. First of all, we note that this is more an exception than a rule: new enterprises are founded mainly by beginners; as for the old enterprises, they gradually fall into decay. It may turn out that the entrepreneur will turn out to be an economic entity that previously produced within the framework of an unchanging economic circuit. This circumstance does not affect the content of the process. The fact that the entrepreneur in this case already has the necessary means of production, or a certain part of them, or, finally, can pay for them from the funds of his enterprise, does not introduce anything new into the entrepreneurial function and does not change it. Of course, our scheme does not suit this case in all details: the new enterprise exists here along with the others, which at first work in the old way, but the emergence of a new demand for means of production and a new supply of products is already fading into the background. We have constructed our scheme in this way because much more important cases demanded it, and also because it shows us the principle of the process and the mechanism of how the new does not arise directly from the old. An appropriate interpretation makes it possible to adapt it to this case as well, since here we are only talking about new combinations and nothing else.

The entrepreneur almost never bears risks9. This is clearly seen in our examples. If the enterprise fails, the creditor remains in the loser. And although the entrepreneur is responsible for the success of the business with his property, this rather inspires confidence in him than actually provides a loan. But even if the entrepreneur finances himself from past entrepreneurial profits or uses the means of production of his former "static" enterprise, he bears the risk only as a creditor or owner of goods, and not at all as an entrepreneur. Even if he risks his reputation, he does not bear direct economic responsibility for the failure of his enterprise.

It remains for us to note briefly that entrepreneurial profit, as we understand it, is the core of the so-called founder's profit; Whatever the latter may be, it is always based on a temporary excess of income over production costs in a new enterprise. As we can see, the most typical representative of the type of entrepreneurs can act as the founder of a new enterprise. In this case, he is the entrepreneur who limits his activity to the implementation of his own entrepreneurial function, that is, the implementation of new combinations. If the establishment of a new enterprise proceeded according to all the rules and all the parties involved had a perfect gift of foresight, then entrepreneurial profit would be just what in this case would remain in the hands of the founder. Of course, in practice the situation is somewhat different, but economic basis process is just that. Of course, all of the above applies only to the founder himself, and not to his agent, who sometimes performs the technical work of establishing a joint-stock company and at the same time is officially called its founder. He receives only remuneration, which is in the nature of wages. Finally, the very fact of founding a joint-stock company does not exhaust the innovations created in it. Its leaders often organize a new "business", continuing to play the role of founders and at the same time becoming entrepreneurs, regardless of what position each of these leaders held. If, however, no innovations have been carried out in a joint-stock company since its establishment, then the founder was the only one who was engaged in entrepreneurial activity in relation to this company. Let us assume that the value of the joint-stock company means of production10 is represented in the bonds he issues - as is often done in America - and the capitalized income from the permanent sources of income at his disposal - in shares. Suppose further that there are also founding shares that are transferred to the ownership of the founder free of charge. These latter do not represent a permanent source of income, but bring temporary income to the founder until the enterprise finally becomes an integral part of the economic organism. After that, they depreciate. Here we see entrepreneurial profit in its purest form.

To complete our understanding of entrepreneurial profit, let's look at what corresponds to this phenomenon in other, non-capitalist economic structures. There are no difficulties for us in a simple market economy, where, although there is an exchange of products, capitalist activities are not practiced, not to mention the natural exchange of products of closed economic units. In these economic units, the power of the producer over the means of production is different from that in the capitalist economy, as in the case that we will consider below. Otherwise, everything said about the capitalist economy remains valid. To avoid repetition, we shall confine ourselves to the closed economy (geschlossene Wirtschaft).

There are two types of organization here. The first, in its most striking manifestation, is something like an isolated landowner's economy, where all material wealth belongs to the landowner, and all the people are his serfs. The second is a separate communist economy, in which all material goods and labor services are administered by the central body, which also determines all cost ratios. Both forms can initially be considered jointly: in both cases, we are talking about economic entities that are outwardly different and, apparently, pursuing different goals, but possessing absolute power over their economy and not expecting from other farms either cooperation efforts in production or the provision of opportunities. making a profit. This is the main difference between these structures and the capitalist one: here there is a world of values, but there is no world of prices. By moving from our examples to the study of the closed economy, we are entering into the realm of an in-depth analysis of the cost phenomena that underlie entrepreneurial profits.

We know that even in a closed economy there is a cycle in which the law of costs operates, according to which the value of products is always equal to the value of the means of production expended, and that here economic development, in our understanding, takes place in the form of the realization of new combinations of existing goods. It could be assumed that under these conditions it is allegedly necessary to accumulate a certain stock of goods that performs a special function. The first part of this assumption is somewhat true: not always, but quite often, the creation of reserves is a step towards the implementation of a new combination. But this process does not perform any independent function with which specific cost phenomena would be associated. The decision on a different way of using the benefits in the economy is made by the head or the governing body itself. Whether such a decision leads directly to the desired results, or whether this requires a preparatory stage of accumulation of reserves, is completely indifferent to us. We are also not interested in whether all participants in the process approve of the new goals set for them and whether they are ready, if necessary, to accumulate reserves. At the same time, the leaders themselves do not experience any hardships - as long as they firmly hold the reins of government - they do not pay attention to possible temporary losses of those whom they lead. As for the governed, they will always resist as far as possible the implementation of any far-reaching plans, if - which is not an absolute necessity, but quite likely - these plans will limit their current consumption and. Despite this, they do not provide any direct or indirect economic influence. The most that should happen here is the restriction of consumption and the accumulation of stocks, however, also not of their good will. The latter means that there is no independent function that would correspond to our picture of the development process. If the leader gives those who are led the opportunity to receive a bonus, then he is thereby likened to a military leader who promises his soldiers a special reward in case of victory: this gift should make subordinates more accommodating, but it has nothing to do with the essence of the process and does not form a special economic category. . At the same time, the difference between the "landowner" and the head of the communist economy is purely quantitative. The fact that the latter does not pursue the goals of personal enrichment and seeks to increase the common good, while the “landowner” perhaps pursues only his own interests, does not make an essential difference between them for the simple reason that until the masses themselves try fruits of the new, it will be just as alien to them as if the innovation served only the interests of the “landlord”.

It follows from what has been said that the time factor has no independent significance in a closed economy. Managers can compare the result of the planned combination not just with that result - while

The "landlord" seems to be guided by his own interests - which was achieved with the use of the same productive elements in the old way of applying them, but also with the results of those new combinations that are carried out with the help of the same means. If these latter require less time, then the result of the planned combination must be compared with the sum of the results of all combinations that can be carried out in the same time. Therefore, the time factor is taken into account in a closed economy when drawing up economic plans, while in a capitalist economy its influence, as we will see below, manifests itself through interest. This difference, and only this one, is really obvious. As regards factors such as the need to wait (Wartenmiissen) or a lower appreciation of future pleasures, they do not play an independent role in both the capitalist and the closed economy. The worst thing is to “wait and catch up”, because at this time one could do useful work. We are less attracted to future pleasures because the longer we have to wait for them, the more “alternative pleasures” we are deprived of.

So, the leader of such a community, whatever its specific position, extracts from the former areas of application a certain amount of means of production and with their help implements a new combination, for example, produces a new good, or maybe an old good, but of a better quality or through the use of other methods. In the latter case, it makes absolutely no difference whether he extracts the necessary means of production from the same branch that previously produced the given good, or whether he allows it to continue to work in the old way and establishes a new production next to it, with the help of means of production taken from other branches. Ex hypothes (presumably) new products should - no matter what scale of values ​​is accepted in a given society - cost more than those that were previously produced with the same means of production. How does the process of imputing the cost of new products take place? How is the contribution of individual factors evaluated at the moment when a successfully implemented combination ends in obtaining a product, because its value has already been determined? It is even better to choose the moment when the decision is made to implement a new combination, and to assume that everything happens in the future as planned.

The first thing the actor has to do is to compare the value of the new products with the value of those that were produced before and which could now be produced in the normal circuit with the same means of production. It is clear that without such a comparison it is impossible to assess the benefits of a new combination and start active actions. We have to decide at which of these values ​​the contribution of the means of production is to be valued. One thing is clear: before the decision is made to implement a new combination - only at the previous cost of the products they produced. If the excess cost that the new combination would give in the expenditures on the means of production were included in advance, then its implementation would not bring any benefits at all, and the comparison of the values ​​of the old and new products would lose all meaning. But the decision has been made. What then? Should we not, in the spirit of Wieser12, impute to the means of production the entire amount of their contribution to production, as will happen in a future circuit in which these means of production will realize a greater value? Shouldn't the entire cost of new products, assuming everything functions perfectly, be charged to the used means of production?

I answer these questions in the negative, and maintain that the services of labor and land will retain their former value. There are two reasons for this: firstly, the former values ​​are familiar, they have developed on the basis of long experience and have taken root in the minds of economic entities. They change only with the passage of time and under the pressure of new experience. In addition, the services of labor and land themselves do not change in connection with the implementation of new combinations, which also contributes to the invariance of their values. On the contrary, the values ​​of new products, like their prices in a capitalist economy, are outside the established system of values; the transition from old values ​​to new ones does not take place gradually, but abruptly. Here the point of view is valid, according to which each production good is valued according to

ii with a value that it can realize not where it is currently used, but in other areas of use 13. The fact is that it is this value - in our case, the former value of the means of production - that depends on the specific means of production. If these means of production disappeared from one area of ​​application, the loss would be replaced by similar means of production from other branches. No unit of a good can be valued more than another, similar unit, as long as they exist simultaneously. The services of labor and land involved in the new combination do not differ in any way from those that are simultaneously applied in the old way - if they are not, then they differ in value, but this case is understandable without any explanation and does not relate to the essence of the matter - and therefore cannot have any other value than this. Even in the exceptional case, when all the productive forces of the national economy are engaged in a new combination, at this stage they would have to be valued at their former values, which could be realized in case of failure of the enterprise or would give us the magnitude of the losses if they were completely destroyed. Therefore, the successful implementation of a new combination provides a surplus of value not only in a capitalist economy, but also in a closed economy, and this surplus means not only better satisfaction of needs compared to the previous level, but also an increase in net income that is not spent on paying for the means of production. In other words, surplus value 14 in a developing economy is not only a private economic phenomenon, but also a national economic phenomenon. This national economic surplus is, in principle, the same as the capitalist entrepreneurial profit with which we met earlier.

Secondly, we can arrive at a similar result in a different way. Entrepreneurial activity of the manager, necessary for the implementation of a new combination, can be considered as a means of production. I don't do it on other occasions only? because there is more to the opposition of the entrepreneur to the means of production. But here their identification will serve us well. So, imagine for a while that the function of the

driver is the third primary factor of production. Then, obviously, a part of the cost of new products should be imputed to him. But what? In themselves, the abilities of the leader and the means of production are equally necessary for the production process, and if the question arose of the loss of one of these factors, then the leader would not only have to spend the entire cost of his products. to prevent the loss of the means of production, except for a certain minimum, but also to give away the entire surplus value (Oberwert) received from the sale of new products - again minus a certain minimum - in order to prevent the loss of one's creative power. There is no contradiction here with what we said "in the first place". All categories of value receive quantitative certainty only due to the presence of a moment of competition, whether it be competition of values ​​or economic entities. Since in a closed economy the second kind of competition is absent, and the question of what is and what is not entrepreneurial profit, as we will see below, is much less important than for a market economy, the value of entrepreneurial profit is not always defined here so unambiguously. and it is clear, as in the economy where this issue is more important, and the general situation does not undergo significant changes. However, even for a closed economy, in most cases we can determine what part of the cost is imputed to the performer of the entrepreneurial function. As noted, individual means of production, as a rule, can be replaced, but the manager does not. minus the cost that could be realized without her participation. Thus the resulting surplus must here be attributed to a special factor, the existence of which does not increase the share of the value attributable to the means of production.

At the same time, we must not forget that it is possible to speak of imputing the former value of the product to the means of production only with certain reservations. The fact is that the marginal value of the means of production in the former fields of application increases as a result of the withdrawal of some part of these means of production from them. We observed the same phenomenon in the capitalist economy. The rise in prices for the means of production in the capitalist economy, under the influence of new demand on the part of entrepreneurs, exactly corresponds to this proposition. the process of determining the value. Therefore, we should eat. to make an appropriate reservation, but the essence of our problem is . Lema will not be affected. This increase in value must not, of course, be confused with the imputation of the value of the product to the means of production in the process of development.

No one can argue that the process of determining the value we are depicting is unrealistic and entrepreneurial profit does not represent a special value in a closed economy. In a closed economy, you also need to evaluate your actions, evaluate the benefits from the implementation of a new combination and determine the source of these benefits. It would be more correct to say that in a closed economy, entrepreneurial profit does not matter as a category of distribution; in a certain sense this is true. Of course, under relations of domination and subordination, the “landlord” freely disposes of the amount of the product corresponding to his merits, but at the same time he disposes of other people's income at his own discretion. He may pay the workers more or less than the amount determined by their marginal productivity. In a communist economy, entrepreneurial profits - at least in theory - should accrue to society as a whole. By itself, this circumstance does not interest us. But does it not follow from this that entrepreneurial profit, especially in a communist-type economy, is dissolved in wages, that in this case the theory of value does not work and the whole product goes to wages? No, it shouldn't. It is necessary to distinguish the economic essence of income from what happens to this income. The economic essence of any income is that it is generated by one or another production service. In this sense, wages are income generated by the service of labor. In a market economy under conditions of free competition, this income goes to the worker, but only because the principle of remuneration in accordance with marginal productivity prevails here. This means that in a capitalist economy it is the given wage that generates the given service. If the services of labor were mobilized in some other way - by means of coercion or appeal to a sense of duty to society - then the worker would perhaps receive a smaller amount, but even in this case his wage would be determined by the marginal productivity of labor, and what he received less, should be considered as a deduction from wages. This deduction would also represent part of the wages, but the part that did not go to the worker. In a communist economy, the manager will obviously not receive entrepreneurial profit. But from this one cannot make a hasty conclusion that development under such conditions would be impossible. Most likely, with such an organization, people would change so much over time that it would not even occur to them to demand entrepreneurial profits, as it would have occurred to a statesman or military leader to demand all or any part of the spoils of war. But entrepreneurial profit would no doubt continue to be so. That it cannot be characterized as the economic wage of workers can be proved by slightly modifying the line of reasoning of Böhm-Bawerk in his classical analysis of the category of interest. This analysis is also quite suitable for the study of rent, in which it is necessary to distinguish the essence of the productive contribution of land from the payment of income based on it to certain economic entities.

In this case, with the wages of which workers should entrepreneurial profit* be identified? There are two possible answers to this question. The easiest way to say that entrepreneurial profit is a part of the wages of those workers who took part in the production of new products. From the contribution of the earth, we abstract here. But this cannot be, because then the wages of these workers, ex hypothesi (presumably) would be higher than those of their colleagues working in other industries in the old fashioned way. These latter perform the same - both in quantity and quality - work. Therefore, this hypothesis leads us to a contradiction with the fundamental principle of economic life, according to which the same goods cannot have different values. It is impossible not to recognize the injustice of such a situation. Moreover, there would be a group of privileged workers. In principle this is possible, but then the surplus that would be received by a privileged group would not be part of the wages.

The second possible answer is this: the value we call entrepreneurial profit and the quantity of products corresponding to it simply form part of the national dividend and should be evenly distributed among all the labor services of a given period, and it is assumed that they are all equal among themselves, and inequality in terms of Qualifications are taken into account in a known way: skilled labor also includes the labor expended on acquiring qualifications. In this case, workers who are not engaged in the production of new goods receive more than the product of their labor. Wages in excess of the value of the product produced by the worker cannot be explained from an economic point of view. It is obvious that here the workers receive part of their wages on grounds that have nothing to do with the economy. This option is just as possible as many others. Society, one way or another, must dispose of entrepreneurial profits, as well as all other income. Moreover, it must dispose of them in the interests of the workers, because there are no other claimants here. At the same time, society can be guided by any principles: distribute benefits according to the need for them or strive to achieve any common goals without resorting to individual distribution. But all this does not change anything in economic categories. In a normal circuit, workers can neither directly nor indirectly receive more than the product of their labor plus the product of the land, since nothing else simply exists. In our case, this is possible only because one of the agents of production is deprived of his product voluntarily or forcibly. If in our definition of the polysemantic concept of "exploitation" we are guided by the fact that it takes place only where the share of one of the driving forces of production and, accordingly, its owner accounts for an amount less than its product in the economic sense of the word, then we have the right ut-

to argue that the increase in the wages of workers in our case can only be explained by the exploitation of the manager. However, this definition includes the exploitation of the land user and is therefore not applicable to a communist economy where there are no land owners. We can give a narrower definition of exploitation as a situation in which the personal contribution of the agents of production is rewarded not with the product they have created, but with a smaller amount. But even then there will be exploitation of the leader. Of course, we cannot and do not intend to give a moral assessment of this phenomenon.

Therefore, from an economic point of view, entrepreneurial profit cannot be identified with wages, even when it goes entirely to the workers. For a communist economy, the realization of this fact is of great practical value. It not only makes it possible to correctly understand the economy of a given society, but also allows us to solve some specific issues. For us, the consideration of a closed economy allowed us to penetrate deeper into the essence of entrepreneurial profit. We found out that this phenomenon does not depend on the specific form of organization of the national economy. For all these forms, entrepreneurial profit is a cost phenomenon associated, in essence, with the function of economic management. If in the process of development there was no need for guidance and coercion, the amount of entrepreneurial profit would be included in wages and rent, and it would not exist as an independent phenomenon. Since this is not the case, and since any mass of people is at least a little like all those peoples that are known to us from universal history, insofar as the ideal organization of economic processes and their completely smooth and timeless flow, by no means all income should be attributed to the services of labor and land. .

I turn to the second act of the drama associated with any innovation, not only in a market but also in a closed economy. And in the latter, entrepreneurial profit does not last forever; and here changes take place leading to its disappearance. Let us assume that a new combination is carried out, its result is obvious, the success is obvious, and the skeptics fell silent. The way to achieve this result is now known: a simple manager who would make sure that everything goes according to plan is enough. The need for creative abilities and administrative power of the leader disappears. To achieve the same success, it is enough just to repeat everything that has been done, and at the same time it is quite possible to do without a leader. Of course, certain complications and difficulties may arise, but in principle the matter has been greatly simplified. The benefits of the new combination have become a reality for all members of society, and new products, the arrival of which is evenly distributed over time, are constantly before their eyes. Therefore they do not feel any deprivation and one should not wait long for the production of the next batch of products in the sense in which we wrote about it in chapter 1. Further progress is no longer required from the national economy, but to maintain the flow of goods at an unchanged level, we believe , in condition.

Consequently, the new production process will be repeated again and again 19. This does not require entrepreneurial activity at all. If, again, we consider it the third factor of production, then we can say that with a simple repetition of new combinations that have become habitual, one of the factors of production necessary for their implementation turns out to be superfluous. At the same time, of course, this factor ceases to claim a share of the value of the product and, accordingly, similar claims for labor and land services expand. Now these factors are more important: they create all the value of the product; it is entirely imputed to them, and first of all to the services of labor and land directly employed in new production, and then, in accordance with well-known principles, to all other services of these factors. Consequently, the direct user costs of the new combination of labor and land services increase first, and then this process covers the costs of all other services of these factors.

Thus the values ​​of all the services of labor and land increase, but this increase is neither in size nor in character like that which takes place during a new combination. In the latter case, it is not the magnitude of the value of the services of labor and land that grows, but their marginal utility. The reason for this is that a part of the Means of Production is withdrawn from the branches that are still working, and as a result needs are satisfied that are more intense than those that were satisfied before. After the new combination is realized, something completely different happens: the value of the new products begins to be taken into account in the value of the means of production. It increases marginal utility production goods, but not only it, their total value also grows. The difference that exists between these two phenomena is of great practical importance, for example, for someone who is going to increase the amount of means of production he uses. The rise in the cost of the means of production reflects the fact that the product of labor and land has increased, while a more complete satisfaction of needs now depends on production goods and only on them. The value given to the means of production is no longer that which they had in the circuit of the previous year, but that which is realized by them in the new circuit. To evaluate them at the time of transition above the then replacement cost was simply meaningless. Now the cost of replacing the means of production includes the value that they have in a new field of application. Both in the old and in the new circuit, the value of the means of production is determined by the regularly realized value of their product, only its magnitude is now different. An increase in the cost of a social product entails a rise in the cost of means of production. In the new situation, the old, customary value, confirmed by experience, is replaced by a new value based on the new marginal productivity, which in the final analysis will also become familiar and will be confirmed by experience. This is how the connection between the product and the means of production should have been established, which would ensure a “full-flowing” flow of values, destroying any “profit” in its path. There was no gap between the value of products and the means of production before, and there won't be one now. And if everything functioned perfectly, then the communist national economy could rightfully consider the entire result of production as the product of its labor and its land and direct it to the consumption of its members20. This practice is quite acceptable from an economic point of view.

To a certain extent, the process of eliminating entrepreneurial profit proceeds in a closed economy in exactly the same way as in a capitalist one. But the decline in prices for new products, which is characteristic of a capitalist economy, due to the competition of other economic entities, should be absent here. Of course, even in a closed economy, new products must be included in the circulation, and their values ​​must be brought into line with the values ​​of all other products. Mentally, we can also distinguish here two different points: the implementation of innovations and their introduction into the circuit. But, as it is easy to see, in practice it is of great importance whether both these processes occur ipo actu (simultaneously) or not. In a closed economy, it is enough to identify the surplus of value due to entrepreneurial activity in order to solve our problem. In the capitalist economy, this magnitude of value can find its way to the entrepreneur only through the mechanism of market processes, and again only through this mechanism can it be destroyed or withdrawn from this entrepreneur. Therefore, the essentially simple problem of value is complemented by the question, how does entrepreneurial profit accrue to the entrepreneur? The mechanism of this process reveals some features that do not and cannot exist in a closed economy.

And yet not only economic essence entrepreneurial profit, but the nature of the process that eliminates it is the same for any organizational form economy. In any case, it comes down to removing the obstacles that prevent the entire value of the product from being attributed to the services of labor and land, or from their prices being equal to the price of the product. The dominant principles of the process under consideration are that a free economy, firstly, does not allow an excess of value for individual products, and secondly, systematically pulls up the value of the means of production to the value of the product. These principles are implemented directly in a closed economy, and in a capitalist economy through the mechanism of free competition: under capitalism, prices for the means of production must be set in such a way that they completely exhaust the price of the product produced with their help.

If this is not possible, then the price of the product must be reduced accordingly. The existence of entrepreneurial profit under such conditions is solely due to the fact that the transition from one state in which there is no surplus of value to another in which there is also no such surplus cannot take place without the help of the entrepreneur. In a capitalist economy, it is also necessary to observe an important condition: even competition should not immediately deprive the entrepreneur of his entrepreneurial profit.

Entrepreneurial profit is as directly related to the means of production as the results of a poet's work are to his draft manuscript. Neither smallest part this profit is not imputed to the means of production. But that is not all. Providing means of production or owning them is not the content of the entrepreneurial function. But the most important thing is that the prolonged rise in the cost of primary means of production, caused by the discovery of new areas of their application, cannot, as we have seen, be considered a source of entrepreneurial profit. Consider the example of a slave farm, in which the land and workers (i.e. slaves. - Approx. ed.) belong to the entrepreneur (read: slave owner. - Approx. ed.), Who bought them to implement a new combination. Here, rather than anywhere else, it might be said that land and labor are bought at a price corresponding to their former use, and entrepreneurial profit is equal to the amount by which their production has increased. But this would be wrong for two reasons. First, the revenue from the sale of a new product will increase only at the beginning, and then decrease under the influence of competition. To ignore this circumstance would be to overlook important aspect entrepreneurial profit. Secondly, permanent additional income - if it is not a quasi-rent - from an economic point of view is always an increase in wages, which in our example goes to the "owner of labor", and not to the worker himself, and land rent. Of course, slaves and land now have for the owner and in general a greater value than before, and therefore he becomes richer, but not as an entrepreneur, but as an owner, if we abstract from one-time, or temporary, profit. The situation is no different when nature becomes the fl of a new combination as a means of production (for example, the hydropower of a stream is used). True, in this last case, it is not hydropower that brings profit, but land rent in our understanding.

So, a part of what was originally entrepreneurial profit passes into rent. At the same time, the economic nature of the corresponding indicator changes. Let us suppose that the owner of a sugarcane plantation turns to the cultivation of cotton, which until recently21 was a much more profitable occupation. This is a new combination. Therefore, the plantation owner becomes an entrepreneur and begins to earn entrepreneurial profits. At first, his costs include the same amount of land rent that existed in the production of sugar cane. Further, we will assume that the resulting competition will sooner or later reduce his income, as it actually happened. But if there is still a surplus after that, how should this phenomenon be explained and what does it represent from an economic point of view? We will not take into account possible obstacles to the functioning of the economic mechanism. Then the appearance of such a surplus can be explained either by the fact that this area has the most favorable conditions for the cultivation of cotton, or by the fact that, because of this innovation, land rent has increased everywhere. As a rule, both of these factors act simultaneously. This alone allows us to attribute the permanent additional income entirely to ground rent. In addition, if the plantation owner continues to grow cotton, his entrepreneurial function will come to naught, and from that moment on, all income must be imputed primary funds production.

Now a few words about the relationship between entrepreneurial and monopoly profits. Since an entrepreneur, when first appearing on the market with new products, has no competitors, the prices for these products are fully or partially determined by the principles of monopoly pricing. Consequently, under the conditions of a capitalist economy, entrepreneurial profit contains an element of monopoly profit. Let us suppose that the new combination amounts precisely to the creation of a long-term monopoly position, say, for example, to the formation of a trust, which hardly needs to fear competition from outsiders. It would seem that there is every reason to consider entrepreneurial profit as permanent monopoly profit, and monopoly profit simply as entrepreneurial. And yet here we are dealing with two completely different economic phenomena. The establishment of a monopolistic organization is a function of the entrepreneur, and its "product" finds its expression in entrepreneurial profit. While functioning, the organization receives excess income, but now it is imputed to those natural and social factors, which form the foundation of a monopoly, henceforth it becomes monopoly profit. From a practical point of view, founder's profit and permanent income are also different things: founder's profit is the cost of monopoly, and permanent excess income is the product of monopolistic market relations.

The scope of the present work does not allow me to continue this, probably already protracted presentation. It is possible that I have extremely tired the reader. Nevertheless, I cannot but say that even this lengthy presentation does not pretend to cover all aspects of the problem under consideration and eliminate all possible misunderstandings. I hope, however, that I have succeeded in highlighting the essential points. But before we move on to another topic, I would like to make a few more remarks.

Entrepreneurial profit is not a rent, i.e., not an income generated by the special advantages of the permanent elements of a given enterprise. It is also not return on capital employed (Kapitalgewinn), however we define the latter, so there is no reason to speak of a trend towards leveling off levels of entrepreneurial profit. In reality, such a trend simply does not exist. Only the lumping of interest and entrepreneurial profits explains the fact that some authors prove the existence of a similar trend22, although we have the opportunity to observe in the same place, at the same time, finally, in the same industry, enormous differences in terms of profits. We want to further state that entrepreneurial profit is not the same as wages. In itself, this could easily be allowed. It is clear that entrepreneurial profit is not just something that remains in the hands of the entrepreneur. It is a value expression of what the entrepreneur creates, just as wages are the value expression of what the worker creates. Neither one nor the other can be called profit derived from exploitation. It is true that wages are determined by the marginal productivity of labour, and entrepreneurial profit is an obvious exception to the general law. The problem of the latter lies precisely in the fact that the law of equality of prices to costs (Kostengesetz) and the law of marginal productivity, as it were, exclude its existence. What the marginal entrepreneur gets is completely irrelevant to the success of all other entrepreneurs. Any wage increase applies to all workers. But if someone as an entrepreneur has achieved success, then he first uses it alone. Wages are one of the elements of price, and so is entrepreneurial profit, but not in the same sense: if the payment of wages is a brake on production, then the same cannot be said of entrepreneurial profit. It can rightfully be said about it the same thing that the classics of political economy said about land rent, namely, that it is not included in the prices of products. Wages are a constant source of income; entrepreneurial profit is not such at all, if we consider one of the characteristic features income, the regularity of its receipt. The entrepreneur is deprived of this profit as soon as he fully fulfills his function. The entrepreneurial function is inextricably linked with innovation, the implementation of development parameters, and the creation of a new value system. She is both a child and a victim of development 23.

Without development there is no entrepreneurial profit, and without the latter there is no development. We will only say that in a capitalist economy without entrepreneurial profit there could be no formation of property and property. In any case, this process without it would not have become the significant social phenomenon that we are witnessing today. If we abstract from "capitalization" various kinds rents - the essence of this process, also generated by development, we will consider in the next chapter - from the placement of money by the population on deposits in savings banks - we do not attach much importance to this - and, finally, from those amounts that development and chance give individual economic entities - in the latter case, such amounts are received irregularly, but even if they are not consumed, they participate in the formation of property and property, then there remains one, in essence, the most important source of the formation of property. Non-consumption of entrepreneurial profit is not saving in the true sense of the word, nor is it abstinence in satisfying needs. Thus, we can say that it is the activity of the entrepreneur that has created most of the property and property. Reality, it seems to us, convincingly confirms our conclusion.

Although in this chapter I have given the reader the opportunity to consider the cost of production, along with wages and rent, also interest on capital, nevertheless I have structured my analysis as if the entire surplus remained in the hands of the entrepreneur, minus, of course, wages. and rent payments. In fact, he also has to pay interest on capital, by the amount of which, naturally, this surplus decreases. Lest I be reproached for calling the same amount at first entrepreneurial profit, and then interest, I will especially emphasize that this aspect will be considered in detail by me.

The amount of entrepreneurial profit is not determined as firmly and unambiguously as the amount of income received within the framework of the circuit. This size cannot, for example, in contrast to the elements of costs in the circuit, be said to be quite sufficient to generate - fixed by the equilibrium factors of the system - "the amount of entrepreneurial services offered", a quantity that is easily explained in each specific case. It is theoretically impossible to determine the magnitude of such a proposal. Both for the entire set of entrepreneurs and for an individual entrepreneur, the amount of entrepreneurial profit actually realized at the moment can significantly exceed the amount that would be sufficient to use the actually used services of entrepreneurs. Certainly, total amount entrepreneurial profits are greatly exaggerated24. However, it should be noted that a clearly overestimated assessment of the success of a single entrepreneur has its own function, since the opportunity to achieve similar success stimulates potential competitors much more than if they were guided by the real value of entrepreneurial profit multiplied by the probability of obtaining it. In addition, those entrepreneurs who have no chance of success also have hopes for a big “reward”. Nevertheless, it is quite obvious that in many cases, especially if we do not take into account the influence of habit and the general belief in the attainability of tempting goals, the income of the whole group of entrepreneurs or its individual representatives could be less without any damage to the cause. It is also clear that in this case the relationship between the quality of services and profits is much weaker than, say, in the labor market of freelancers. This is not only important from the point of view of taxation theory - although in the practice of taxing entrepreneurs the focus is not on this moment, but on the process of "capital formation", that is, an increase in the stock of means of production - but also explains why the entrepreneur is relatively easy to part with his profit, and a "hired" entrepreneur, for example, the director of an industrial enterprise, who often plays the role of an entrepreneur, as a rule, puts up with the fact that his earnings are much less than entrepreneurial profits. The more our life is rationalized, leveled, democratized, the less strong are the ties of an individual with the people around him - primarily in the family circle - and also with specific things - on the one hand, the factory where he works, on the other - the house, where he lives, the more meaningless the motives listed by us in the second chapter, the weaker becomes the entrepreneurial grip and the less the desire for profit25. Along with this, and partly for the same reasons, the process of development is becoming more and more automatic, which reduces the importance of the entrepreneurial function.

However, not only in an era that did not know this social process, the entrepreneurial function was

the driving force of both constant change in the economy and constant change in the elements that make up the upper strata of society. It remains that driving force to this day. Together with successful entrepreneurs, people close to them who have not made any effort to rise up the social ladder. Career is the most important motive in the capitalist world. But since this "social rise" is accompanied by the displacement of old enterprises as a result of competition and the ruin of all those associated with them, then at the same time there is a process of decline, declassification, degradation. The same sad fate awaits the entrepreneur, whose strength is running out, as well as his heirs, if they could only inherit from him the booty, but not the "hunting" grip. The point is not only that any individual entrepreneurial profit dries up, but the mechanism economic system, based on competition, does not allow the long-term existence of surplus value, destroying it with the help of the same incentive - the desire for profit. The main thing is different: usually the success of an entrepreneur acquires material form possessions industrial enterprise. The heirs, on the other hand, are in the habit of transferring the enterprise they have inherited to the rails of an economy conducted within the framework of a circuit. As a result, it is quickly replaced by new enterprises. An American saying goes: from work blouse to work blouse, there are only three generations. So it must be, and it really is. Exceptions are extremely rare. More often than not, the fall is much faster. Since there are always entrepreneurs and their family members and their heirs, public opinion and those who engage in idle chatter around and around the social struggle willingly ignore this fact. It makes of the "rich" a class of heirs standing apart from the struggle for existence. In fact, the upper strata of society resemble an inn, which is always full of people, but people who are constantly changing. These strata are replenished from the bottom to a much greater extent than many of us dare to admit. This gives rise to many new problems, and only by solving them will we be able to know the true nature of the competitive capitalist economic system and the structure of capitalist society.

Fourth Chapter Enterprise Management