6. Profit, Loss, and the Entrepreneur
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, from Fundamentals of Economic Analysis: A Causal-Realist Approach.
