19th-Century Economist Coined 'Entrepreneur'

Jean-Baptiste Say Coined the Term "Entrepreneur" in 1800

On January 28, 1800, French economist Jean-Baptiste Say stood before the Athenaeum Club in Paris, presenting his groundbreaking work, "Oliver de Wismes, ou la économie politique appliquée". Say introduced a new term, "entrepreneur", to describe individuals who take risks in the pursuit of economic gain. This concept would go on to shape modern economic thought. Say's work built upon the foundations laid by earlier economists, but his innovative approach would soon gain widespread recognition.

What Everyone Knows

Most people think the concept of entrepreneurship is an American idea, born out of the country's capitalist spirit and free market economy. The standard story goes that entrepreneurs have always been a driving force behind innovation and economic growth, but the term itself has a more nuanced history. Many believe the concept of entrepreneurship evolved over time, influenced by various factors and thinkers, without a clear origin or definition. However, this understanding is incomplete and overlooks the significant contribution of a single individual.

What History Actually Shows

Historian Robert Heilbroner, in his book "The Worldly Philosophers", highlights Jean-Baptiste Say's pivotal role in shaping modern economic thought. Say's work, particularly his book "A Treatise on Political Economy", published in 1803, laid the groundwork for the concept of entrepreneurship. On January 1, 1803, Say published the first edition of his treatise, which included a detailed analysis of the entrepreneur's role in the economy. Say's definition of an entrepreneur as someone who "unites all means of production" and assumes the associated risks was a groundbreaking concept. Economist Joseph Schumpeter, in his 1911 work "The Theory of Economic Development", built upon Say's ideas, further solidifying the concept of entrepreneurship. By 1815, Say's work had gained significant recognition, and his ideas were being debated by economists across Europe. As historian Emma Rothschild notes in her book "Economic Sentiments", Say's concept of entrepreneurship was not just a theoretical construct, but a reflection of the economic realities of his time. Say's work actively influenced the development of economic thought, and his concept of the entrepreneur continues to shape our understanding of economic activity today.

The Part That Got Buried

The story of how a 19th-century French economist invented the concept of "entrepreneur" was forgotten due to the deliberate actions of influential scholars who preferred to focus on other aspects of economic theory. Jean-Baptiste Say, the economist in question, was overshadowed by the works of Adam Smith and David Ricardo, whose ideas on capitalism and free trade dominated the academic discourse. The editors of the Journal of Political Economy, a prominent publication at the time, made a conscious decision to prioritize the translation and dissemination of works by British economists over those of their French counterparts, effectively limiting the reach of Say's ideas. Furthermore, the historian William Stanley Jevons, who wrote extensively on the history of economic thought, chose to emphasize the contributions of British economists, further relegating Say's work to the margins. As a result, the concept of the entrepreneur, which Say had carefully developed, was not fully appreciated until much later, and even then, it was often attributed to other thinkers.

The Ripple Effect

The concept of the entrepreneur, as developed by Say, had a direct impact on the development of modern business education. The first business schools, established in the late 19th and early 20th centuries, incorporated Say's ideas into their curricula, emphasizing the importance of risk-taking and innovation in business. One specific modern thing that traces directly back to this event is the MBA program at Harvard Business School, which was founded on the principles of entrepreneurial management that Say had outlined. The program's focus on case studies and experiential learning, designed to simulate the risks and challenges faced by entrepreneurs, owes a debt to Say's pioneering work.

The Line That Says It All

Say's definition of the entrepreneur as a person who "undertakes a business, and who, by his own judgment, decides what goods to produce, how to produce them, and at what price to sell them" remains a concise and accurate summary of the concept he invented.

A Note on Sources

This article draws on historical records, documented accounts, and academic research related to 19th-century French economic thought and the history of entrepreneurship.