It definitely wasn’t Adam Smith. One type of person strangely overlooked in Smith’s free market masterpiece, The Wealth of Nations, is the entrepreneur. This is because the term was actually coined by an admirer of Adam Smith’s book. Entrepreneur is a French word coined by the economist Jean-Baptiste Say, and usually is translated as “adventurer.” Say studied Smith’s book and, while agreeing on all points, found that the omission of enterprising businessmen was a serious flaw.
Entrepreneurs Create New Opportunities
Say pointed out in his own writings that it was entrepreneurs who sought out inefficient uses of resources and capital and moved them into more productive, higher yield areas. Simply put, entrepreneurs seek opportunities for profit and, by doing so, create new markets and fresh opportunities. By constantly disrupting the balance of competition, entrepreneurs prevent monopolies from forming and create a wide diversity of products that keep consumers consuming and producers producing. In return for taking these risks, successful entrepreneurs like Bill Gates and Henry Ford reap fortunes far beyond those of normal agents in the economy. (For related reading, see: Famous Advice From Successful Entrepreneurs.)
Say put the focus on entrepreneurs because he was one. As a cotton manufacturer, he saw how an entrepreneur must be able to recognize opportunities and manage them effectively. Say’s A Treatise on Political Economy, or the Production, Distribution, and Consumption of Wealth captured the imagination of many people. Thomas Jefferson read the English translation and tried to convince Say to teach in his new nation. Although Say never stepped foot on U.S. soil, his entrepreneurial outlook found a home in America anyway. Combining Adam Smith’s free market principles and Say’s entrepreneurial call to arms, the U.S. went wholeheartedly into the industrial revolution and emerged with one of the strongest economies in the world.
(For related reading, see: Are You an Entrepreneur?)