Capitalists and
entrepreneurs are often considered as the same group of people, and
they are often considered as the wealthy classes. Borrowed from what
is said in Marx’s “Kapital”, either capitalists or
entrepreneurs are those who exploit the working classes. However, the
two terms are different and represent their different contributions
to the production. Capitalists provide capitals for the process of
production and entrepreneurs provide entrepreneurship (including
management) for the process of production. There is a reason for the
confusion about the two terms. Firstly, nowadays, many capitalists
especially those well known capitalists earn their first bucket of
gold by their excellent entrepreneurship, so when they become wealthy
capitalists, they are also known as famous entrepreneurs. Therefore,
when the famous entrepreneurs are also capitalists, people become
confused about these two terms.
Capitalists do not
need to manage companies that they invest in; however, capitalists
are required by our economies, since in the modern era, the
investment has become more crucial as the amount of capital required
for production becomes greater. Unlike entrepreneurs, capitalists do
not necessarily involve in the production or the economy by
themselves, they can find wealth managers to manage their capitals
and generate even more capitals. In addition, if we believe our
economies are growing forever, large capitalists can always earn more
capitals as long as their investment portfolios cover large numbers
of sectors.
On the other hand,
entrepreneurship is always important in the process of production.
Entrepreneurship is a process of allocating resources in order to
improve the efficiency of resource allocation. Even those
entrepreneurs with new ideas, they are just entrepreneurs with new
ideas about how and where to allocate resources.
Therefore,
capitalists are those who add fuel to the economy to generate
productions and entrepreneurs are those who drive the economy and
manage the fuel more efficiently.
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