This is not one of those usual whinges about the arts graduates not having a damn clue about anything to do with numbers. This is about the arts graduates not actually knowing what a word means. This ignorance aiding us in explaining why said arts graduates – and Guardian writers – so misunderstand economics.
We can correct this headline by changing the one word here but why we can needs a little explaining – you know, just in case you too did an arts degree at some third rate Technical College:
‘By May I’d made over £1,000’: teen entrepreneurs defy the Covid slump
It’s not “defy”. It could be “exploit”, “react to”, “take advantage of”, many different manners of making the same point. For this is what an entrepreneur does, things change so they try out different stuff. It’s also why the market system works.
So, things change. Tempus fugit, eheu fugaces, all that ancient wisdom. What changes doesn’t matter all that much for the point here. Can be tastes change. Can be technology, the law, how much time you’ve got, anything.
So, change. We’ve also got some universe of what is it physically possible to do. Another entire universe over here of things that people want to have done. If it weren’t for Richard Murphy’s use of them we could draw a Venn diagram here.
For example, snail caviar ice cream is entirely possible to make. There’s a small overlap, if any, with what people want done – therefore we don’t do that. Many people would like a cure for lung cancer but that’s not physically possible as yet so we don’t do that.
But note that we’ve just said that things change. What people want to have done changes. What it is physically possible to do changes. So, we need a system of exploration of those new – or changing perhaps – universes to see where that Venn intersection is now.
Which is what an entrepreneur does. We have those three traditional economic inputs, land, labour and capital. By the above definition what we can do with them changes, what people want done with them changes. The entrepreneur is the person who does the experimentation to see whether what is now possible is desired, whether it is possible to sate the new desires.
The reason the market system works is that those who get it right get hold and cold running Ferraris for having done so. So, given the incentive, people strive to do the exploration as those entrepreneurs.
Which should make clear the inapt use of the word “defy”. The entrepreneur is not defying the changed world, she is exploiting it, taking advantage of the new spaces, both in what is possible and what is desired, in order to line up the future supply of hot rods.
But, you know, arts graduates and actually knowing anything about the world, or even words.