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TOWARD THE UNDERSTANDING OF AN UNFORTUNATE LEGACY
Author(s) -
Redlich Fritz
Publication year - 1966
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1966.tb00849.x
Subject(s) - biography , interpretation (philosophy) , adam smith , neoclassical economics , capital (architecture) , function (biology) , entrepreneurship , sociology , root (linguistics) , economic thought , economics , epistemology , positive economics , philosophy , law , history , political science , archaeology , linguistics , evolutionary biology , biology
SUMMARY The paper starts from Schumpeter's interpretation of Adam Smith's concept of the contemporary embryonic industrialist whose main function was considered to be the accumulation of capital. The author traces the development of this concept in the nineteenth century and tries to explain its origin. He shows that medieval reality, i.e. the relationship between stans and transactor in the societas maris is at the root of Smith's concept. It remained justifiable as late as 1776 on the basis of the cooperation of capitalist and entrepreneur‐manager in the early mechanized cotton industry, as it is presented in Robert Owen's autobiography. But just this self‐testimony shows also the rapid change of this relationship after the appearance of the Wealth of Nations , which neither the classical economists nor Marx under‐stood in their implications. From this came an unfortunate economic legacy, the misunderstanding of certain aspects of entrepreneurship, which only Schumpeter discarded on principle in his Theory of Economic Development.