Answer to Question #91186 in Microeconomics for Manu Karan

Question

Many theorists have developed theories which explain the existence of entrepreneurs. In relation to this, explain Max Weber’s theory and Schumpeter’s theory.

Answer 1

In his theory, Max Weber illustrates that the existence of entrepreneurship is based primarily on social roles and everyday economic growth. Moreover he was a communist and did not support capitalism. Conversely, Schumpeter’s theory supports the existence of entrepreneurship based on innovation as he believed that creativity would help an entrepreneur to succeed. To this end, he embraced the development of new markets and new methods of production.