Entrepreneurship and their remuneration

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					Entrepreneurship and their remuneration
Entrepreneurship and their remuneration
Comrade Jiang Zemin at the 15 major report makes clear: "the distribution
according to work and according to factors of production together." This is
the theoretical problems of socialism on the distribution of two major developments
and a major breakthrough, right Woguo deepening of economic reform has a positive
role in the socialist market economy system gradually Jianli He perfect, socialist
theory of distribution will continue to enrich and develop. The socialist market
economy are all factors of production are beginning to enter the labor market, labor
and means of production are the two basic factors of production. Distribution
according to work should be allocated according to factors of production an important
part of the ownership, ownership of distribution according to factors of production is
socialist market economy principle of distribution. Ownership of distribution
according to factors of production should be divided according to the labor allocation
of the necessary ownership of product value (V), by means of production and
distribution of surplus value of ownership (m), can be referred to as distribution
according to work and by the means of production, the socialist market economy
should be in is the distribution of national income and personal income distribution.
Therefore, the socialist market economy principle of distribution should include these
two aspects and apply to both, the combination of distribution according to work and
by the means of production from distribution.
With labor, capital, land and other production factors in the modern economy and
society in entrepreneurship is a scarce factor of production. In China to move toward
a socialist market economy, entrepreneurs can be said to be the most scarce factors of
production. Socialist economy, according to the allocation of production factors,
including by entrepreneurs to invest their contributions to the actual output
distribution. Entrepreneurs to get the appropriate recognition of compensation is
reasonable, under the market economy is encouraging the supply of scarce resources,
promote resource use efficiency needs, but also of the socialist market economy, the
same below the socialist principle of distribution according to work hand in hand.
Entrepreneurship: a unique factor of production
Social production process is combination of different factors of production products
and services for the community to provide the supply process. As factors of
production, not only capital, land, and labor is the most basic, but in the modern
economy, the capital, land, labor and other factors combine to coordinate the
organization of the production elements of the team, that entrepreneurship is essential
of. Because the modern economy is increasingly deepening division cooperation
system, trading and market network innovation and expand the economy, the different
combinations of factors of production become increasingly sophisticated, complex,
difficult of arts. Entrepreneurship is a good combination of elements, the unique,
innovative elements.
First of all, in the modern economy, all the basic factors of production are scattered by
different elements to the owner of possession. If workers have labor, capital, owners
of capital, land owners own the land. Although some people may not only with capital,
labor, and they own the land, and only willing to engage in their own
self-management elements of the independent production. However, the vast majority
of people in the modern division of labor and cooperation expanding economy, often
have some elements of his transferring out of production by some organization and
coordination activities. In this organization 中 responsible for managing,
coordinating, creative functions of man, could neither capital nor Tude, not in general
Lao Dong, Yao Su but Jin Jin in combination of technology and system innovation
She Ji, management Deng activities. We call such people entrepreneurs. This can be
competent to take up entrepreneurial function, quality and entrepreneurial spirit has
the ability, known as entrepreneurship. Therefore, it is also a unique factor of
Second, in the modern market economy, the different factors of production activities
in the market with its marginal contribution to the series was roughly the same pay.
Get some interest such as capital, land access to the appropriate rent, some kind of
wage labor. In the fully competitive market and the equilibrium price system, the
capital earn interest, labor is wages, land rent happens to be their proper place, the
distribution of income is distributed among the three elements. However, competition
is not always adequate, the equilibrium price is ideal. Competition in the market
because of insufficient information, the market changes with uncertainty and risk,
production and distribution process is subject to uncertainties, disturbances. The
output of certain production process may be higher than the value of their investment
may also be lower than the value of its inputs to form the profit or loss. This profit or
loss beyond a fully competitive market in the interest of capital, land a rental, labor
for a wage of domain industry, with a net surplus (or losses). Who created such net
surplus? Are entrepreneurs. They are aimed at innovation and the pursuit of
high-profit group. Profit is a product of innovation, system innovation, including
technological innovation or product innovation and entrepreneurs should be involved
in the risk of revenue and reduce uncertainty to pay.
Again, in the modern economy, with the development of productive forces, science
and technological progress accelerated expansion of global economic integration,
capital, labor, and other factors of production is relatively abundant supply of capital,
a relative surplus of labor is more common. In contrast, entrepreneurship is even more
for the other elements of the shortage. In the modern economy, finding new
opportunities in the market, 寻找 to lower transaction costs, the reduction of
uncertainty in new ways, new methods become increasingly difficult, modern
entrepreneur is expected that with the economic Fazhaneryan less of. Relative
economic development, science and technology, products and resources, the level of
supply capacity and the continuous improvement of entrepreneurship, especially in
modern economic development, entrepreneurship elements of the shortage of
technical and economic innovation serious constraints, industrial restructuring, new
markets, open up new requirements affect the sustainable economic development.
Clearly, entrepreneurship is different from the capital, land, labor, unique and
essential factors of production. The main elements of this unique feature, is the ability
through the organization, marketing, management, innovation in, make the production
factor Zuhe Xiaolvgenggao, output in line with market's demand,
production Chengben and transaction Fei Yong Jiang Di.
In the socialist market economy, entrepreneurship is still one of the scarce factors of
production. Especially from the planned economy to a market economy in the process
of entrepreneurship is very conspicuous that the shortage of production factors.
Because the system long domination of state planned economic system, so that China
has almost no real business, more units are planned economy. Urban state-owned, and
even the leadership of the collective economic organizations are state cadres. They
plan actors, coordination and grass-roots units of the responsible person, has never
been an independent decision-makers, let alone in the market, so innovation.
Therefore, the Chinese at this stage, the entrepreneurship as a unique factor of
production than other market economy countries, is even more scarce resources.
Profits: Entrepreneurs can reward
Entrepreneurship as a scarce factor of production, in a market economy in economic
operation have to get paid, and must be in accordance with market principles, its
marginal contribution to the prime minister as a reward. No corresponding returns, not
many people willing to invest scarce factors such entrepreneurship; not quite the same
marginal contribution to the series compensation is difficult to encourage
entrepreneurial talent into full play and stimulate the supply of entrepreneurs to the
investment factor. In a market economy, profit is the entrepreneur can use and play a
role in the creation of a reward.
From the general sense, the owners of capital investment is to have more than the
principal balance. To this end, his capital investment can take many forms, such as
setting up direct investment companies, lending capital to purchase real estate
(including real estate), or even to gaming, and so on. Here we put aside loans,
purchase real estate form, only to see the situation of enterprises invest. As loans, real
estate leasing and other sections we have analyzed before.
If the capital investment in a business owners want to profit, he can have two options;
first became the owner of this enterprise, in the modern market economy through the
purchase of all or part of the shares of companies can achieve the purpose. As owner,
he enjoys the power of the owner (such as major strategic decisions of enterprises and
the ratio of the corresponding voting shares) at the same time, enterprises have to bear
the risks and other related obligations, the income and gains and losses are closely
related with the business. Second, as the enterprise's debt into loans to the
company or buy its bonds, the corresponding debt proceeds received, the stability
constant of interest. Generally, investment as a business owner, access to ownership of
income, to more than just a company's creditors, get business to pay
interest on the amount of capital. Of course, the risks of ownership should be greater
than the capital gains interest risk. Overall, the average risk difference between the
two is not great. At the same time between the two there is always a certain minimum
level of income disparity, that as a business owner's expected return and
claim the difference between the lowest level of interest, is to attract people to choose
when the owner rather than the creditor's primary incentive. The minimum
level of difference, we call normal profits. Most of the enterprises generally have
access to such a normal profit. However, this is just normal profit entrepreneurs to the
minimum level of remuneration, as below this, no one is willing to do business owner,
only willing to eat instead of themselves as risk-free.
However, the fact that not all of the normal profits of enterprises have access to many
of the businesses at a loss, there are quite some enterprises have excess profits. Cause
such a big difference in profit enterprises the main reason is the different enterprises
of the entrepreneurs, innovation, develop skills and management, there is a big
difference in the level of coordination. Profits of such entrepreneurship is essentially
one of the rewards.
Why entrepreneurs can pay no less than this factor into the so-called normal profit
returns it? Based on the above analysis, at least summarize the following reasons:
1. First, entrepreneurship is a non-deterministic in the investment options under
capacity, due to information inadequate, uncertain future, always risky investment in
the. Entrepreneurs as a business owner, must bear the considerable investment risk.
On the one hand, the owner of the business income of the claims came in labor, loan
Elements of the land lease, the total revenue that companies pay wages, interest, rent
payments until the balance of profits after the 6 On the other hand, when the company
due to poor management of liquidation, the owner's claim on the
liquidation of the residual value is also at the most at the end. Therefore, in the four
basic factors of production, the entrepreneur can take this element of risk is the largest
risk for such compensation must be given appropriate incentives.
2. Entrepreneurship is an innovation in an uncertain environment, to reduce the cost
of production and operation activities. Distributed or transferred to various risks, to
seek an excess return. Entrepreneurship as a creative talent, a lot of people more or
less. Some people are good at engaging in technological innovation, social system,
some people are good at innovation, and some people can have many innovations. But
as an entrepreneur to innovation, refers only to investment companies and key
decision-makers engaged in business decision-making and strategic planning aspects.
Entrepreneurs to make such innovations to reduce production or transaction costs than
other companies access to some excess return. Without this innovation, enterprises
can only be the same as with other companies, most were so-called normal profits.
The innovation is to make it available to higher than normal profits in excess profits.
This excess profits due to innovation and entrepreneurial activity, reduce the cost of
the enterprise, or improve the efficiency of enterprises. Therefore, the profit is to
reward entrepreneurs for innovation.
Click here need to distinguish between the different innovation and invention.
Innovations include the first to manufacture new products, introduce new production
techniques, discover and use new materials, opening up new markets and create new
forms of business organization such as the system. The invention is only a technical
sense, the invention is only to be put into commercial production, management, is
innovation. Innovation not only to entrepreneurs, normal profits, and excess profits in
the short term will bring.
3. Entrepreneurship is a very scarce, with the born and the day after the club to invest
in human capital is closely related to factors of production. Entrepreneurship as a kind
of courage to take risks, be good at innovation, and skilled in organizational capacity,
may be more or less to all colleagues in the health and personality, related to
differences in intelligence. In comparison, with the relative scarcity of entrepreneurs
who can, much more of this scarcity factor, the elements of remuneration should be
higher. Moreover, entrepreneurs can be more investment in human capital with the
acquired closely related. An entrepreneur who can often require long-term investment
in education, through various training, suffering, and even investment, business
failure blow to pay money, time consuming and spiritual aspects of a large number of
long-term heavy load. These are to become entrepreneurs, entrepreneurial to the
ordinary people must pay more than the huge investment costs. These costs are likely
to earn higher future returns. This special is the return on investment profits.
Entrepreneurs can profit as life in the real economy has played a unique role in the
reward, not only in the capitalist market economy, but also exist in a socialist market
economy. Of course, the socialist market economy, the distribution of profits and the
profits of the capitalist market economy are quite different distribution.
First of all, the socialist public ownership, the profits of state-owned enterprises in
particular, although from entrepreneurial innovation and management activities of the
efforts, but the socialist state system of entrepreneurial functions, different from those
in the private sector in the capitalist entrepreneurs. Countries as investors, owners,
major investment decisions by the state and the exercise of government departments
at all levels, enterprises are mainly state appointed managers, selected. Countries and
all levels of government in fact has some important features of entrepreneurs. In
capitalism, private enterprise, the entrepreneur often is the investor, the owner, is a
major determinant in decision-making, top management.
Second, the socialist state-owned enterprises, investors, policy makers, and can not
bear the risk of investment failure of responsibility. Not only because they did not
have any capital investment, but also because investment failures in the end who is
difficult to distinguish. Therefore, many key leaders of state-owned enterprises are
generally not perform well in business and back to a dried out. So many entrepreneurs
are usually state-owned enterprises not responsible for. This is a capitalist economy
with private entrepreneurs, self-commitment in investment decision-making risk, and
is part or all of the private capital to bear the risk of failure, with significant
Because the differences in these two areas, the socialist state system, although
corporate profits from entrepreneurial innovation, but this innovation is not purely
business level, the entrepreneurial innovation, including the government level on
policy, management, resource supply, etc. the matching, adjustment, innovation.
Therefore, the entrepreneur can not be exclusive profit sharing profit even qualify.
Under the socialist market economy, entrepreneurs, state-owned enterprises,
state-owned investors should only be the basis of normal profits are excess profits, to
get real profit rewards - of the entrepreneurs to pay. In general condition, the
state-owned enterprises paid the so-called entrepreneurs, but a class one, only with the
management of labor remuneration, that senior staff salaries.
Strengthen incentives, norms regulating
Socialist economy is still a market economy, market economy on the scarce factors of
production paid by the competitive market with its decisions and elements of the
marginal contribution to the prime minister should be paid. The formation of the
socialist market economy, the process of development, entrepreneurship in quite a
long time is the most scarce factors of production, the requirements of this element
will show the relative and absolute increase. As entrepreneurs to increase the
remuneration of the corresponding incentive and restraint mechanisms to strengthen,
the regulation of remuneration of such elements should gradually improve and
One is to accelerate the establishment of a sound competitive market, entrepreneurial
talent, let the market work on the entrepreneur's identification,
configuration, determined by market competition, the price of entrepreneurial skills.
Over the years, China has been the lack of growth in a market economy, grew up
entrepreneurs. A considerable number of state-owned, collective enterprises by
government officials when his family only. These business leaders are relying on
government offices and organizations, departmental administration selected,
cultivated. Many of them under the conditions of modern market economy, little is
known about business decisions, lack of innovation, risk awareness, entrepreneurs do
not have the basic quality and ability. However, they are many state-owned enterprises
as the top leadership positions, to exercise the functions of the entrepreneur.
In a market economy, entrepreneurs by entrepreneurs to full competition in the market
stand out. First is the entrepreneurial talents of the owner is free to enter or exit the
market, entrepreneurship, self-seeking entrepreneurs decide whether to participate in
the competitive position; followed so that entrepreneurs can both supply and demand
equal status and no party has a monopoly , control the market; finally reward the
entrepreneur can determine by market forces, and subject to the actual changes in the
marginal contribution of specific changes. Entrepreneurs can not directly intervene in
the national market operations, mainly through laws and regulations to define the
rules of the market, standardize the market order, and use tax to regulate the
entrepreneurs to pay.
In the socialist market economy, not only entrepreneurs, non-public enterprises in the
competitive market, selected out of entrepreneurship, and public enterprises,
entrepreneurs have market-based mechanisms for competitive selection.
Entrepreneurs can be a competitive market, help to promote entrepreneurship reward
with their actual contribution to the quality of inputs corresponding to form a
balanced profit.
Second is to strengthen the incentive for entrepreneurs to responsibility and risk
constraints, risk taking ability to cultivate new entrepreneurs. A long time, there is no
real entrepreneurs, entrepreneurs can not move as scarce factors of production, the
entrepreneur can not form an effective incentive and restriction mechanism liability
First, incentives for a single, rigid incentives. Wages, bonuses plus welfare housing
allocation, and public service vehicles, such as major incentives for different
enterprises (size, industry, ownership) of the operators of similar incentives, often
succeed and little about.
Second, the risk of liability is very weak constraint. Because China's
state-owned, collective enterprises, the main operators are generally the appointment
and removal by the higher administrative department, and they are usually salaried
state officials or government departments to manage the enterprises in the Ministry,
the number of its commitment to business failure is not the risk of affordability, so
even if the business losses resulting from mismanagement, bankruptcy, how much
risk can not be personally liable for the loss. They have to bear the loss of personal
risk, most are no longer continue to serve as the business leaders. Because almost all
state-owned, collective enterprises of the current leaders and potential leaders are not
many business risks can be used as collateral, guarantee capacity, and therefore can
not produce much change in leadership and binding effect of the risk of liability.
In a market economy, entrepreneurship as a scarce resource, a factor of production to
generate profits and must be an effective incentive. Usually the incentive to go
beyond the normal salary paid, including the specific form of profit sharing, excess
bonuses, stock grants and so on. At the same time, incentives should also have strict
constraints. Business entrepreneurs to gradually form a mechanism for restraining the
risk of liability, entrepreneurs must first be certain equity and risk management with
equity capital commitment of policy makers. Therefore, the operators to explore the
risk of personal property security responsibility, the operating results and the
accompanying loss of profit-sharing and compensation linked, it is very necessary. At
the same time, entrepreneurs can also form a personal credit system to enable
enterprises of household personal long-term investment in human capital to take risks.
Some have criminal records of the so-called entrepreneurs, to widely publish, to
remove them from entrepreneurs market; on poor management led to bankruptcy,
close down the entrepreneur, registered lower the credit rating of its human capital.
With the personal property and human capital as the risk of relying on a compensation
mechanism to force the entrepreneur to work hard and do everything possible to
improve profitability, reduce costs and risk loss.
Third, adjust income entrepreneurs, and promote fair distribution. Entrepreneurship as
a scarce factor of production is a need for long-term human capital investment and
produce practical training and the unique elements of this factor in the market
economy should be relatively high pay. Therefore, in the socialist market economy,
income distribution structure elements can be tilted to entrepreneurs is necessary.
However, in a socialist economy, which tilted the distribution of income should be
limited. First, in the socialist economy, because of the competitive market,
entrepreneurs can not build, and improve the state-owned economy, entrepreneurship
is the risk that is not directly the responsibility of the entrepreneur's income
incentive not too strong, talented entrepreneurs compensation must be controlled and
adjusted. Second, the socialist economy is still in the initial stage for a long time,
China's entry are not high income levels, different regions, industries,
enterprises large income gap between the level of development and the poor,
incentives of entrepreneurs can not be too strong, as well as with other social strata of
the income gap too big.
Therefore, in the primary stage of socialism market economy, in the initial allocation
process, we should give full play to the market incentives for entrepreneurs to factors
encourage people to invest in human capital formation, stimulate entrepreneurial
innovation impulse. Meanwhile, the state should pay attention to the distribution
process of the secondary regulation, the use of tax leverage (mainly personal income
tax) to adjust the high income entrepreneurs, as well as the income of entrepreneurs to
reinvest the proceeds to pay higher taxes. Entrepreneur returns to the limited range
within a certain flexibility.