CAPITALISM WITHOUT CAPITALISTS
The prevailing theory of capitalism suffers from one central and disabling flaw: a profound distrust and incomprehension of capitalists. With its circular flows of purchasing power, its invisible- handed markets, its intricate interplays of goods and moneys, all modern economics, in fact, resembles a vast mathematical drama, on an elaborate stage of theory, without a protagonist to animate the play.
The prevailing assumption is that at any particular time the economy is a problem with a small number of solutions--limited by tastes, technologies, and natural resources--which can be expressed as a set of simultaneous equations. Within this scheme, the acknowledged role of the capitalist or entrepreneur is to mediate marginally among all the limiting conditions. Even his leading academic advocates see him as a mere "scout of opportunities," a puppet of price signals, a servant of sovereign consumers. A dependent variable, the entrepreneur rapidly vanishes into the shadows of such imperious factors of production as land, labor, and capital, such massive numbers as money and aggregate demand.
The Marxists, surprisingly, have provided a grander and in some ways more accurate view. Karl Marx himself acknowledged the supreme productive genius of the bourgeoisie and assigned to the capitalist phase a central, if transitory, role in economic progress. But the left fantasizes a tiny elite of tycoons wielding the powers of enterprise rather than an immense class of entrepreneurs and aspiring businessmen--perhaps 50 million in the