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for Ricardo from what it is for us after a century’s experience of improvements in machinery. Similarly the proposition that the improvement in the mechanism of importation which is effected by the liberation of trade, though it may divert the direction, will (in the long run) not impair but increase the efficiency of the productive forces in the country, rests partly, I think, on specific experience of what improvements in arts of production have done for the benefit of the working classes. To distinguish empirical evidence of this kind from the still more diffused and universal experience on which the first principles of exchange (communicated in proceding paragraphs) are founded is, I think, philosophically just; and may be practically important in certain peculiar pathological cases.
Function of the entrepreneur. — The central figure in the productive system is the entrepreneur. Buying the factors of production, the use of land, labour, machinery, and working them up into half manufactured or finished products, which he sells to other entrepreneurs or consumers, at a price covering his expenses and remunerating his work and waiting. The symmetry of the entrepreneur with respect to the factors of production was first, I think, clearly enunciated by M. Leon Walras. Justly, or with very slight exaggeration, on the occasion of M. Walras’ anniversary in June, 1909, the leading economists ad statisticians of Italy have declared: «The model that he was first to furnish for the comprehension of economic phenomena, the theory of economic equilibrium, constitutes the greatest advance which our science has received, since the impulse (l’avviamento) given to it by Ricardo»1. All the more deserving of examination must be any tenet in the doctrine of such a teacher that challenges attention as paradoxical. In this spirit I have before now noticed the peculiar proposition that the entrepreneur normally makes neither gain nor loss. At first sight the dictum might pass as a façon de parler, as Companies, make their liabilities and assets exactly balance by including among the liabilities of the Company the property of its members. But the latest utterance of the Lausanne School make it indisputably clear that the proposition is to be interpreted literally. Professor Pareto
- «Giornale degli Economisti». June, 1909.