Xob yui

BLASÉ REPORT

RICHARD CANTILLON (1755)

HE WAS THE FIRST TO PRESENT A THEORY OF ENTREPRENEUR. SO WHAT IS ENTREPRENEUR? IT IS A FRENCH WORD
MEANS “ABILITY TO TAKE CHARGE”

 1st to present theory of entrepreneur

 ENTREPRENEUR – a French word means “ ability to take charge”7

HE ASSUME ENTREPRENEURS AS RESPONSIBLE FOR BUSINESS RISK, SURVIVING FROM IT FOR PROFIT

 Cantillon’s Theory suggest that without entrepreneurs taking and overcoming risk of business ventures,
economic progress would have slowly stopped a long time ago.

YES BECAUSE IT IS WHERE OUR ECONOMIC SUCCESS DEPENDS

ACCORDING TO HIM, ENTREPRENEURS ARE DIFFERENT FROM EMPLOYEES, IN WHICH ENTREPRENEURS HAS
UNCERTAIN INCOME WHILE EMPLOYEES HAS FIXED INCOME. BOTH TAKES RISK AND DEPENDENT UPON EACH OTHER

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 He categorized people in terms of their economic functions.

HE ALSO,

 Cantillon distinguished three functions of Entrepreneurs:

 1st, buying and selling products from the villagers to the cities
 2nd, buying and selling products from the city to the villagers
 3rd, producing goods and services sold in the villages or cities0.

THESE FUNCTIONS INCORPORATE ALL ACTIVITIES WHICH ORGANIZES THE INPUTS OF PRODUCTION, THE LAND,
LABOR, AND CAPITAL FOR THE PRODUCTION AND CONVEYANCE OF PRODUCTS.

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 Assumptions implicit in Cantillon’s theory:

 Ex. Entrepreneurs must avail of the different forms of utilities in the production and distribution of
goods.
 This utilities include:
 Time
WHICH IS ESSENTIAL IN PROVIDING CONSUMERS THEIR DESIRED GOODS AT A CERTAIN TIME
 Form
WHICH IS ALSO NEEDED IN TRANSFORMING RAW MATERIALS INTO A FINISHED PRODUCTS AS
WELL AS THE DESIGN TO CAPTURE CONSUMERS
 Place
 Service
BOTH PRIVATE AND PUBLIC IN ORDER TO OPERATE
 Possession utility
TO TRANSFER GOODS OWNERSHIP THROUGH DIFFERENT PAYMENT METHODS
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5 Pre-classical Economic Theories In Cantillon’s Essay:

1. The role of entrepreneurs and economic geography, entrepreneurs and labor market
ROLE OF ENTREPRENEURS REFERS TO TAKING CHARGE AND COORDINATING THE PRODUCT MARKET
AND RESOURCE MARKET. THE SIZE OF TOWN/CITIES DETERMINED THE NUMBER OF ENTREPRENEURS
THAT WILL LIVE IN IT. TO MEET THE DEMANDS OF CONSUMERS, ENTREPRENEURS GATHERED IN THE
SAME LOCATION.
2. Critical role of entrepreneurs
IN LABOR VALUE DETERMINATION, ACCORDING TO HIM IT’S NOT JUST ABOUT DEMAND AND SUPPLY
THAT DETERMINE THE WAGE BUT ALSO THE OPPORTUNITY COST AND RISK.
3. Entrepreneurs and theory of value
IT REFERS TO THE INTRINSIC VALUE OF GOODS; THERE WERE DOUBTS ABOUT WHETHER IT REPRESENTS
LABOR, LAND VALUE OR BOTH. BUT CANTILLON’S DEFINED THE INTRINSIC AVALUE AS AMOUNT AND
QUALITY OF THE LAND AND LABOR SPENT TO PRODUCE GOODS IN CONSIDERATION OF THEIR
RESPECTIVE COST.
4. Circular flow model;
CANTILLON DEVELOPED IT WHERE ENTREPRENEURS ARE RESPONSIBLE FOR BRINGING ALL GOODS AND
SERVICES FROM DIFFERENT, BUT MUTUALLY INTERDEPENDENT CLASSES OF PEOPLE TOGETHER.

5. Price-specie flow mechanism

CANTILLON SHOWED THAT THERE ARE POSITIVE AND NEGATIVE EFFECTS AS THE VOLUME OF MONEY
INCREASES, SINCE VOLUME OF MONEY AFFECTS THE PRICES OF GOODS DEPENDING WHERE AND WHEN
THE MONEY IS SPEND. CANTILLON’S THEORY ALSO REFERS TO THE SECTORS AND THE TIMING OF
MONEY EXPENDITURES

CANTILLON’S PRICE- SPECIFIC FLOW MECHANISM HAS LIMITATIONS IN MODERN INTERNATIONAL

TRADE. IT DOES NOT APPLY TO THE PRESENT CAPITAL FLOWS OF THE COUNTRY AND THE THEORY DID
NOT ALSO EXPLAIN THE EFFECT OF INTEREST RATE IN THE BANKING SECTOR THAT AFFECTS THE FLOWS
OF CAPITAL IN AND OUT OF THE COUNTRY

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 Neoclassical Theory of Entrepreneurs

 Contradicted the classical model
 Neoclassical economists give importance to the principle of diminishing marginal utility that drives
entrepreneurial engagement

FROM THIS PERSPECTIVE, ENTREPRENEURS MUST CONSIDER THE

DECREASING SATISFACTION OF CONSUMERS AS MORE UNITS OF A GOOD
CONSUMED.
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GET UP BACK TO BACK
1. PARTNER SHOULD HAVE THE SAME HEIGHT
2. SIT DOWN BACK TO BACK
3. HOOK EACH OTHER’S ARM THEN BE IN A LONG SITTING POSITION
4. STAND UP CAREFULLY WITH THE SAME POSITION

KNEE STAND
1. PARTNER STANDS IN STRIDE POSITION, ABOUT SHOULDER
WIDTH APART, WITH KNEES SLIGHTLY BENT.
2. PARTNER PLACES HIS HANDS ON OTHER PARTNER SHOULDERS,
WHILE THE OTHER PARTNER RISES UP THAT PARTNER IS SITTING
ON HIS SHOULDERS
3. PARTNER PLACES HIS FEET ON THE OTHER PARTNER’S THIGHS.
MEANWHILE, THE OTHER PARTNER LEANS BACKWARD FOR
BALANCE REMOVING HIS HEAD FROM BETWEEN THE PARTNERS
LEGS AND GRASPS THE UPPER THIGHS OF THE PARTNER WHO
RAISES HIS ARMS SIDEWARD FOR BALANCE. MAINTAIN THE
POSITION