Download Now – Research Paper by Randall G. Holcombe
Economists have been studying the factors that improve people’s material well-being at least as far back as Adam Smith (1776), but the phenomenon of economic progress—or as it is often more narrowly studied, growth—barely predates Smith.1 Prior to about 1750, economic progress was so slow that people would have to be very observant to see any progress during their lifetimes. Everywhere in the world, the standard of living and the quality of life was much the same in 1750 as it was in 1650, and it was much the same in 1650 as it was in 1550. Indeed, it was much the same in 1550 as it was in 550.2 Since then, economic progress has manifested itself partly in income growth, but even more in new methods of production and in new types of output. This article examines the indispensable role that entrepreneurship has had in the production of economic progress. The link between entrepreneurship and progress may seem obvious, yet the connection between the two in economic analysis is tenuous, partly because mainstream economics does not do a very good job of representing entrepreneurship or progress.