Inseparable from control of the firm in which he operates. The essence of the entrepreneur, therefore,

Is that he is alert to gaps in the market which others do not see and is able to raise the finance

and other resources required by a firm to exploit the market that he initiates.

If successful he will make a super-normal profit that will later reduce to a normal profit as new

competitors are attracted into the market. In this conception, the pure function of the entrepreneur

Is as a fourth factor of production.

Other functions than risk-taking have been attributed by economists to the entrepreneur: invention,

the provision of risk capital and management, for example. Though not part of the pure entrepreneurial

function which is remunerated by profit, all these functions may be embodied in the owner — manager

* Cantillon, Richard (1680-1734) — ирландский банкир и экономист.

** Say, Jean-Baptiste (1767—1832) — французский бизнесмен, экономист.

*** Knight, Frank Hyneman (1885-1937) — американский ученый-экономист.

160

of a small business. His remuneration may be made up of rent as an owner of land, interest as a return on

capital, a wage or salary for his management function and therefore as a return for his labour, and profit

as a return for his entrepreneurship. In the large firm the entrepreneur is a theoretical abstraction whose

functions are divided between the management (the board of directors and senior executives) and the

shareholders. Many economists have argued that the separation of ownership from control has important

Implications for the behaviour of managers and market performance.

Vocabulary Notes to Text 11.7.1.5

1. to perceive market opportunities — постигать рыночные возможности

2. to assemble — собирать (аккумулировать)

3. perfect competition — совершенная конкуренция

4. to be alert to gaps — быть готовым закрыть брешь

5. risk capital — рисковый капитал

6. remuneration — возмещение

11.7.2. Match the following terms with the correct definition

Work with a partner.

1. portfolio 2. overdraft3

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iltrsacebdghnopuvAwm

it()frsacenoадн itfrsaeеbgknopyоручдйпщлориы зоипаю ilrsтaceеклdnopuонm— аекпн аврноужщ ()rевuои затесмал ilaonL .tse5agodnu itsroF ..seropm troynm4

b) The payments of the Fund include interest, management

and expenses of the national debt, deficit on the consolidated

fund and loans to the nationalized industries and

public corporations, local authorities and the private sector.

Receipts (денежные поступления) include interest on

loans, profits of the Issue Department of the Bank of England,

interest transfer from the consolidated fund and borrowings.

c) A loan facility on a customer’s current account at a bank permitting

him to overdraw up to a certain agreed limit for an

agreed period. Interest is payable on the amount of the loan

facility actually taken up, and it may, therefore, be a relatively

inexpensive way of financing a fluctuating requirement.

d) The collection of securities held by an investor. In the widest

sense, documents giving title to property or claims on income

which may be lodged (депонирован), e.g. as security for a

bank loan.

e) A legal document between a lender and a borrower whereby

the latter agrees to certain conditions for the repayment of

the sum of money borrowed. When one borrows from a commercial

bank, one signs a promissory note. Particular forms

of promissory notes, known as commercial paper, can be

bought and sold. They are usually issued by large corporations,

but in some countries, for example Spain and Japan,

promissory notes are a common form of small business finance.