The classical economists that preceded Marx gave little thought to the dynamics of production, concentrating on problems of distribution, such as those involving price. Monetarists and Keynesians simply assume the productive process, focusing entirely on demand. It is more than a convenience for modern economists to ignore the role of risk-taking and innovation. The profession's determination to convert Keynesian demand theory into an exact science ran afoul of Princeton mathematician John von Neumann, who in 1936 demonstrated that risk and innovation could not be converted into mathematical equations. To this day, the computers that drive economic policymaking in most of the West cannot handle questions relating to this basic ingredient of entrepreneurial capitalism.
Every ingenious man is free to start new business projects.
He may be poor, his funds may be modest and most of them may be borrowed. He ploughs back the greater part of his profits into business, thus making it grow rapidly. These nouveaux riches are the harbingers of economic improvement. Their threatening competition forces the old firms and big corporations either to adjust their conduct to the best possible service of the public or to go out of business. It is true, the income tax prevents them, too, from accumulating any capital.