The Summary of the Entrepreneur as American Hero

MK346-01

Dr. James Ricks

Zheming Chen

Extra credits paper

The Summary of the Entrepreneur as American Hero

The main idea of the article is about price value. The author thinks that the dollar is the certificates of performance, when a person or a company provides products or services to another entity; they will get dollars for providing the service. When the service or products represent high value to another part, the providers can get more dollars. To apply the principle into a company, companies make profits while finding and meeting the needs of the customers. They can make much more profits if they could provide scarcity resources.

        The article is divided into three parts, the first part start from a brief discussion of the sources of income. Some Americans think the distributions of dollars are unfair, they think the dollar dealer is racist and sexist. They the author explain the value of dollar by a brief example, a man get a certificate of performance from his fellow man by mowing his lawn, repairing his roof or teaching his kid economics. Some people can get more certificates-dollars because they are more effective at serving and pleasing their fellow man than others. Therefore, the level of wealthy depends on how effectively the entity serves their fellow man. The pursuit of profits is a good thing because the direct impetus for technological innovations progress has been the entrepreneurial search for profits and the competitive economy.

When the basic physical needs been met, it is possible for those people to have time resources to develop spiritually and culturally. Owning greater wealth, entrepreneurs can get more fulfilling by attending the arts, affording recreation etc. According to Adam Smith, the market is led by an invisible hand, promoting an end which was no part of his intention. The entrepreneurs get profits while providing huge benefits to us.

        Then, the second part is in defense of profit, the part focus on the magnitude of profits and the role that they play in a free market economy. The profits can be divided into two kinds, one is normal profit, and another is “windfall profits”. Normal profits is the opportunities cost of using entrepreneurial abilities in the production of a good. Normal profits must be paid to employ entrepreneurial services, the decisions, innovations and risks that drive economic progress. The “windfall profits” also means obscene profits. There are two ways for entrepreneur to make a profit, the first is whether he is producing a good that consumer’s value and are willing to pay for, and the second is whether he is using the scarce resources of society in the most efficient manner to produce the good. A business going bankrupt does not mean that its productive resources will vanish into the air; it means someone else will own them.