Heterogeneous entrepreneurship and the Sunday Times Rich List


  • Anthony J. Evans Assistant Professor of Economics, ESCP Europe.
  • Toby Baxendale Founder and CEO, Seafood Holdings.




It may appear surprising that economists devote such little attention to the heterogeneity nature of entrepreneurship, however there are several possible explanations. The concept represents a well-known tension between typical economic theory and the concept of entrepreneurship itself. When Baumol (1968) and Kirz-ner (1973) wrote their seminal works they were attempting to respond to a perceived neglect of the entrepreneur within neo classical economics. The explosion of entrepreneurship re search since then has not been comfortably reconciled with for mal mo - dels, and indeed empirical studies have a tendency to lapse into psychological profiling. It might be argued that such profiling (be it in terms of gender, race, age, experience, education, IQ, marital status, employment history, etc) does make entrepreneurs hetero - geneous, however this differs from the way in which we use the term. «Heterogeneity» does not merely mean «differentiated» but ties into a deeper methodological debate about the nature of scientific analysis. In short, heterogeneity is an aspect of the broa - der concept of subjectivism. At a basic level subjectivism implies that individuals can interpret events in different ways, and as a consequence of this we expect a diversity of action that is glossed over when people are modelled as homogenous agents.

Having said this, it’s important to recognise the diversity of approaches and methodologies within the economics profession. For example, although the neoclassical system is liable to eschew premises that aren’t tractable, Austrian-school economists do tend to emphasise subjectivism and heterogeneity. But whilst this is strikingly evident in capital theory (see Lachmann 1956) it is cu-rious to note that a similar attitude towards entrepreneurs them - selves is underplayed. In short, since Austrians emphasise the functional qualities of entrepreneurship they treat entrepreneurs as homogenous blobs. This paper intends to strike a middle ground between homogeneity and psychological particularism by de-constructing the entrepreneur (Evans and Baxendale 2008).


BAUMOL, W. (1968): «Entrepreneurship in Economic Theory», Ame-rican Economic Review.

BEAVERSTOCK, J.V., HUBBARD, P., and SHORT, J.R. (2004): «Getting away with it? Exposing the geographies of the super-rich» Geoforum, 34(4): 401-407.

CHU, T. (2001): «Vertical specialisation with heterogeneous entre-preneurs: can trade promote industrialisation in developing countries?» Minnesota Centre for Economic Research, Paper N.º 310.

EVANS, A. J. and BAXENDALE, T. (2008): «Austrian business cycle theory in light of rational expectations» the role of hetero-geneity, the monetary footprint, and adverse selection in monetary expansion» The Quarterly Journal of Austrian Eco - nomics, 11(2): 81-94.

EVANS, A. J. and BAXENDALE, T. (2010): «The monetary contraction of 2008/2009: Assessing UK money supply measures in light of the financial crisis» Available at SSRN: http://ssrn.com/abstract=1416922

FOSS, N.J. (1994): «The Theory of the Firm: The Austrians as Pre-cursors and Critics of Contemporary Theory» Review of Aus-trian Economics 7 (1): 31-65.

HAZLEDINE, T. (1997): «How did the wealthiest New Zealanders get so rich?» New Zealand Economic Papers, 31(1): 35-47.

HOWDEN, D. (2010): «Knowledge shifts and the business cycle: When boom turns to bust» The Review of Austrian Economics, 2010, vol. 23, issue 2, pages 165-182.

KIRZNER, I.M. (1973): Competition and Entrepreneurship, University of Cambridge Press.

LACHMANN, L. (1956[1981]): Capital and its Structure. New York University Press.

LANDERRETCHE, O. (2006): «Heterogeneous entrepreneurs, creation and destruction: a simple model and some evidence from an emerging market» Working paper

SHLEIFER, A, and SUMMERS, L.H. (1990): «The Noise Trader Approach to Finance» Journal of Economic Perspectives, 4(2): 19-33.




How to Cite

Evans, A. J. E., & Baxendale, T. . (2012). Heterogeneous entrepreneurship and the Sunday Times Rich List. REVISTA PROCESOS DE MERCADO, 9(1), 411–428. https://doi.org/10.52195/pm.v9i1.241