8 - Entrepreneurial Profit and Common Prosperity

Summary

This chapter addresses the relationship between entrepreneurs and “common prosperity.” It argues four points both theoretically and empirically: (1) profit is a responsibility system under which everyone earns income only when he or she creates value for others; (2) entrepreneurs are the primary driver of wealth creation; (3) ordinary people are the biggest beneficiaries of the market economy and entrepreneurs; and (4) because the function of the entrepreneurship itself cannot be inherited, income distribution in the market is highly mobile and, “wealth cannot survive more than three generations” is the iron law of the market economy!