Entrepreneurship, Recession, Economics, Profit and Loss and the modern day entrepreneurs .

Every step toward the elimination of profit is progress on the way toward social disintegration - Ludwig vo Mises.

Entrepreneurs are the heartbeat of every economy and it is good that they are equipped with the right knowledge so that they can make good judgements and appraisal.

Recession might be on the brink and few entrepreneurs and organizations are prepared to deal with it which might result in the same effects suffered in 2008 to recur again. I therefore think that few people understand what business and entrepreneurship is all about. They have the wrong assumptions of what money and profit is as well as what drives the people we call entrepreneurs.

“The life of money-making is one undertaken under compulsion, and wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.”
― Aristotle, The Nicomachean Ethics

The Austrian School of Economics which is well known for explaining the business cycles and their views of explaining what happens to economies, can provide knowledge to better understand these  things

I want to just explain what I think is the main component of what drives economies i, Profit and loss and the misinterpretations people might have been harboring all along and where it comes from.

It is not the capital employed that creates profits and losses. Capital does not “beget profits” as Marx thought. The capital goods as such are dead things that in themselves do not accomplish anything.

If they are utilized according to a mistaken idea, no profit or losses result. It is mental acts, the mind of the entrepreneur, from which profits ultimately originate.

Profit is a product of the mind of success in anticipating the future state of the market. It is a spiritual and intellectual phenomenon.

In branding profits as excessive and penalizing the efficient entrepreneurs by discriminatory taxation, people are injuring themselves. Taxing profits is tantamount to taxing success in best serving the public.

“Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects.”
― Murray N. Rothbard

The only goal of all production activities is to employ the factors of production in such a way that they render the highest possible output.

A good decision is based on knowledge and not on numbers.  - Plato

The fact that in the frame of the market economy entrepreneurial profit and loss are determined by arithmetical operations has misled many people. They fail to see that essential items that enter into this calculation are estimates emanating from the entrepreneur’s specific understanding of the future state of the market. They think that these computations are open to examination and verification or alteration on the part of a disinterested expert. They ignore the fact such computations are as a rule an inherent part of the entrepreneur’s speculative anticipation of uncertain future conditions. There is no such thing as a static economy and mathematical formulas calculate things in states and therefore miss the dynamic and social phenomena in the economy.

The public tend to hurt entrepreneurs with more money viewing it as profit and asking for it’s abolishment this is money that will be ploughed back into the business although some of it will be consumed by the entrepreneurs. Capitalism cannot survive the abolition of profit. It is profit and loss that force the capitalists to employ their capital for the best possible service to the consumers.

“Wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.”
― Aristotle, The Nicomachean Ethics

It is profit and loss that make those people supreme in the conduct of business who are best fit to satisfy the public. If profit is abolished, chaos results.

Rugged individualism can be the one thing that can result in the public having a high standard of living or prosper. Examination of the Austrian Gewerbepolitik a policy that from the early eighties on aimed at preserving the economic structure of the ages preceding the industrial revolution. Many of the economies today are not prospering because they tend to preserve the old inefficient ways of doing business and trade instead of embracing innovation and new ideas that propels economies forward.

If a person choose a position with a more modest yield it might be because he lacked the abilities required for entrepreneurship or, in rare cases indeed, because his inclinations prompted him to enter upon another career. That being said depicts that everyone should be any entrepreneur.

Mankind ought to be grateful to those exceptional men who out of scientific zeal, humanitarian enthusiasm, or religions faith sacrificed their lives, health and wealth, in the service of their fellow men.

“The Master said, “If your conduct is determined solely by considerations of profit you will arouse great resentment”- Confucius.

I think in my view that there is no reason why capitalists and entrepreneurs should be ashamed of earning profits, because this is what reduces wastage in any economy and avoids maladjustments .

I decided that it was not wisdom that enabled poets to write their poetry, but a kind of instinct or inspiration, such as you find in seers and prophets who deliver all their sublime messages without knowing in the least what they mean. - Socrates

A social order based on private control of the means of production, cannot work without entrepreneurial action and entrepreneurial profit and of course, entrepreneurial loss. The elimination of profit, whatever methods may be resorted to for its’s execution, must transform society into a senseless jumble. It would create poverty for all.

 “The entrepreneur builds an enterprise; the technician builds a job.” Michael Gerber

I think Millennials and fellow young entrepreneurs in Africa and around the world should first understand the market as well as the economy before they launch their startups or ideas to change the world. Care should be taken in knowing one’s economy before an action or investment is made.

“It is not the fault of the entrepreneurs that the consumers,the people, the common man,prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling bad things than in selling good things. His profits are the greater the better he succeeds in providing the consumers with those things they ask for most intensely.”
― Ludwig von Mises, Human Action: A Treatise on Economics