Then the historian uses one word for the expression of two different things. He applies the term sometimes to signify its praxeological connotation, but more often to signify an ideal type. Nobody in using it thinks of shoe-shine boys, cab drivers who own their cars, small businessmen, and small farmers. What economics establishes with regard to entrepreneurs is rigidly valid for all members of the class without any regard to temporal and geographical conditions and to the various branches of business. What economic history establishes for its ideal types can differ according to the particular circumstances of various ages, countries, branches of business, and many other conditions.
History has little use for a general ideal type of entrepreneur.
Whether the use of a definite ideal type is to be recommended or not depends entirely on the mode of understanding. This typification is the outcome of a definite mode of understanding. Another mode would contrast Democracy and Dictatorship. Then Russian Bolshevism, Italian Fascism, and German Nazism belong to the ideal type of dictatorial government, and the Western systems to the ideal type of democratic government. It was a fundamental mistake of the Historical School of Wirt- schaftliche Staatswissenshaften in Germany and of Institutionalism in America to interpret economics as the characterization of the behavior of an ideal type, the homo oeconomicus .