Varieties of Entrepreneurial Function under Totalitarian (dis)Orders

Abstract

Communist’s collectivistic approach to social order is based upon the premise that private means of production should be abolished, and instead be managed by a centralized power representing the people as a whole. As such, it defies one of the most inherent characteristics of human condition, the innate, creative, subjective, and perennial search for a better condition in life expressed by the entrepreneurial function. Thispaper uses the Austrian School’s praxeology to show how entrepreneurs, as motors of the market system, end up being also the most relevant and widespread challengers to the socialist approach to economics. The real exercise of entrepreneurship defies the unreal socialist economic system in three basic ways: by exercising this latent entrepreneurial function in the most unfavorable conditions creating secondary markets in order to correct an official planned scarcity; by escaping the widespread statist mentality in socialist societies; and by actually exercising economic calculation in spite of the politburo calculus. The paper shows that as much as there are varieties of social order there is a on the kind of entrepreneurial function, which is impossible to eradicate from individuals. Therefore, even when totalitarian regimes take place, entrepreneurship finds ways to exist and emerges albeit of a different lacunar kind, in the shadows, supplying for consumer’s wellbeing under the limits of such societal disorder and, more importantly, bringing to light the intrinsic impossibility of the socialist economic arrangement.