Entrepreneurial Income

Entrepreneurial Income


the part of the average profit remaining to the functioning, that is, industrial or merchant, capitalist after payment of interest for a bank loan. Entrepreneurial income arises from the movement of loan capital. Attempting to extract the maximum profit, industrial capitalists resort to the use of borrowed capital in addition to their own. Having received a loan, the functioning capitalist purchases means of production and labor power. By exploiting hired workers, he extracts surplus value, which comes in the form of profit. This profit breaks down into entrepreneurial income, which is appropriated by the functioning capitalist-borrower, and interest, which goes to the loaning capitalist-creditor.

The division of profit into interest and entrepreneurial income camouflages capitalist exploitation and distorts the real nature of these parts of surplus value. This creates the appearance that interest does not result from production but from ownership of capital and that entrepreneurial income is not generated by the workers’ unpaid labor but by the functioning capitalist’s activities as supervisor and manager of an industrial or commercial enterprise. Acting as apologists for capitalism, bourgeois economists pass off appearance as reality and picture entrepreneurial income as a form of the capitalist’s wages.

There exists a bitter struggle between the functioning capitalists and the money capitalists over the division of profit. The former benefit from lower interest rates, and the latter, from higher rates. At the same time, both groups of capitalists oppose the working class, since both have a direct interest in exploitation of the workers. This opposition to the proletariat creates an underlying unity of capitalist class interests. Both money capitalists and functioning capitalists have an interest in increasing surplus value, that is, in intensifying the exploitation of hired labor. Thus, entrepreneurial income is a direct expression of the relations between functioning and money capitalists and, in the last analysis, of the basic production relation of bourgeois society: the relation between labor and capital.

References in periodicals archive ?
Whereas most prior studies tend to look at entrepreneurial income, this case focuses more on household wealth, which is defined as a stock of accumulated assets.
This sum includes entrepreneurial income (UAH 557 284) and bank deposit percentage (UAH 85 920).
This high cyclicality is not simply due to capital or entrepreneurial income.
That said, our results so far include income from all other taxable sources: wage and salary income (including bonuses and most stock options), entrepreneurial income, dividends, interest, and rental incomes.
The cyclicality of entrepreneurial income for the top 1 percent is relatively stable, at around 2 for both 1947-82 and 1982-2008.
Thus, in seeking to establish whether the pimp (as an ideal type) could be found on the streets of a British city we initially fixated upon floating social constructions of the pimp and the entrepreneur establishing many parallels between the pimp and entrepreneur in both the constructs and literature; however, it was not until we adopted a more holistic view of pimps and their prostitutes by observing them in action in their environment that we came to appreciate the full extent of their entrepreneurial income generating strategies.
It does not permit direct access to pimps, nor does it allow one to research the dynamics of mixed entrepreneurial income streams.
As applied to extractive-resource renewal, capital maintenance is essentially speculative action undertaken to maintain entrepreneurial income.
The principal goal of any extractive enterprise is the speculative earning of entrepreneurial income.
In fact, for the extractive firm choosing one of these strategies, the opportunity costs will necessarily include a subjective reckoning of the entrepreneurial income thought to be obtainable from the next most profitable relinquished strategy (Buchanan 1969, 49-50).
Reducing marginal tax rates on entrepreneurial income provides a clear incentive for entrepreneurial activity.
A marginal tax rate reduction of one percent on entrepreneurial income increases the probability of entrepreneurial entry by 1.

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