6. Profit, Loss, and the Entrepreneur | Peter G. Klein
Channel: misesmedia
Date: 2021-11-09

Causal-realist analysis allows imaginary constructs like the ERE — Evenly Rotating Economy — in order to isolate certain factors like interest.  There would be no profit or loss in the ERE, because those can only exist under conditions of uncertainty.

Klein explains profit as a category, not a line item. The entrepreneur’s function is to experiment with combinations of factors of production to find those that produce the greatest economic value.

The sixth in a series of ten lectures designed to introduce the layman to the basics of applied Austrian economics: "Fundamentals of Economic Analysis: A Causal-Realist Approach".

Recorded at the Mises Institute in Auburn, Alabama, on June 13, 2007.