FROM UNDERTAKER TO ENTREPRENEUR
What is more alarming is that the amount paid out in government grants to unemployment schemes, as Basset cites, was enough to support 44 households per year in an economy of
600,000
people.l(,} The assertion that this piece of empirical evidence supports deepening unemployment is, however well meaning, incorrect.Among the general economic histories, Hawke's
Making of New Zealand,
is widely referred to, however, it relies heavily on trade and monetary factors for its analysis, and omits many industries, such as mercantile, warehousing, printing, and other service industries. What is left is an important account of trade and prices, but an appreciation for the texture of the colonial economy-what it was like on the ground-is absent. 164 More detailed from an industrial perspective is Muriel Lloyd Prichard's,An Economic
History of New Zealand to
1939Y,5 This is the most comprehensive study to date using factory and industrial statistics, though Prichard does not venture much in the way o f analytical comment o n industrial relativities. On the period before 1930, l B . Condliffe'sNew Zealand in the Making: A Survey of Economic and S o&ial Development,
provides an insightful economic commentary.loG Simkin's,The Instability of a Dependent Economy,
investigates economic cycles in New Zealand prior to the First World War and provides a useful overview of broad economic patterns however, there are inaccuracies in Simkin's analysis, which are dealt with later in this thesis. 167
The controversial economist, W.B. Sutch, produced a number of works covering New Zealand's economic progress, such as
Industrial Development in New Zealand, Poverty
and ProgreJJ in New Zealand,
andPoverty and ProgreJJ In New Zealand: A Re-assessment.
168While Sutch's work is useful, one needs to read carefully as his history tends to blend rather too quickly with an overt socialist agenda. More balanced and better researched is
16} This is calculated thus: £22,246 over four years equals £4449 per year. ;\t an average wage of approximately £100 per year, this would be enough to support 44 households. Average wages were given in
Statistics of New Zealand,
and are discussed at later points in this thesis, and by other historians. See for example, Donald Gordon inSpeights,
p.55.1 64 Hawke, G.R.,
The Making of New Zealalld: An Economic History,
Cambridge: Cambridge University Press, 1 985.1(,5 Loyd Prichard, ;\1.,
An Economic History �rNeiv Zealand to
1939, Auckland: Collins, 1 970.166 Condliffe, J .B.,
New Zealand in the Making: A Survey of Economic and Social Development,
London: G. "\llen and Unwin, 1 930.167 See a discussion of tIlls in Chapter 7. Simkin, C.G.F.,
The Instability of a Dependetlt Economy: Ecollomic
F
ItlctttatiollJ fl1 New Zealalld
1840-1914, Oxford: Oxford University Press, 1 95 1 .168 Sutch's socialist bias comes strongly through his work. He was a great campaigner for industrial development in New Zealand and supporter of protectionism. See for example Sutch, \VB .
Poverty and
Progress in New Zealand: A Re-assessme!1t,
Wellington: Reed, 1 969; Sutch, \VB.,Illdtlstrial Development ill New
Zealal1d,
Wellington: Dept. of Industries and Commerce, 1 964; Sutch, \VB.,Poverty al1d Progress ill New
Zealal1d,
Wellington: Modern Books, 1 94 1 .A
HiJtory of New Zealand
by Keith Sinclair, andThe O_vford HiJtory of New Zeaiand,lw
although in both, economic development is relegated to the occasional chapter; wars, class, and politics, tend to dominate the historical landscape. Good commentaries on the changes in New Zealand economic affairs and business environment can be found in Deeks and Enderwick,BtlJineJJ and Socie!}.
An attempt to consider the development of entrepreneurship in New Zealand's history has recently been addressed by Graeme Hunt with the publication of The Rich LiJt: Wealth and EnterpriJe in New Zealand. l7!} Destined to become a useful companion to the student of business history in New Zealand, Hunt has done an extensive job of citing many of the figures who shaped New Zealand's commercial environment to the present day.However, there still exist considerable gaps in our knowledge of the development of the New Zealand business enterprise and how this compares to international literature. Alfred Chandler's seminal themes of strategy and structure have yet to be explored from a New Zealand perspective. Likewise, the development of management practice, Taylorism, Scientific Management, the rise of co-partnership movement at the turn of the twentietl1 century-all await examination. Equally fertile ground would be further investigation into the family flfm, or the impact of technology on colonial enterprise, as well as the retail industry. In short, while business history and the study of the entrepreneur are both well-established academic fields, there is much scope for New Zealand historians to make additional contributions.
C ONCLUS I O N
This chapter has briefly traced the development o f the idea of entrepreneurship. It has shown how the word took on an early association with one who assumed risk, who provided for their own income, and who acted as a coordinator or undertaker of projects. Political economists, such as Turgot, Say, and Smith, then added a number of important distinctions to our understanding. We saw how the entrepreneur had a propensity to reinvest their profits rather than turn to consumption.
1 09 Sinclair,
K., A
HiJtary afNew Zea/al/d,
London: Oxford University Press, 1961; Oliver, W.H. (ed.),The
HiJtory ofNew ZealaNd,
Wellington: Oxford University Press, 1 981 .170 Hunt, Graeme, The Rich List: Wealtb and Enterprise in New Zealand 1820-2000, Auckland: Reed, 2000; see also Hunt, Graeme,
Hustlers,
RogueJand
Bubble Bi!Ys:White-Collar Mischief in New Zealand,
Auckland: Reed, 200 1 .FROM UNDERTAKER TO ENTREPRENEUR
In addition, the role o f the entrepreneur as a circulator of exchange in the economy was pointed out. Both of these aspects highlighted the ability of the entrepreneur to stimulate an economic system. Adam Smith made numerous references to the entrepreneur, or undertaker as it was known in English, and identified a 'newness' characteristic in reference to the entrepreneur's economic behaviour.
Austrian economist Carl Menger emphasised the decision making ability of the entrepreneur, claiming that entrepreneurs were distinct from capitalists or other econonuc actors. This was also emphasised in the work of English economist Alfred Marshall. Marshall's description of the entrepreneur, which has particular relevance to this study as he wrote during the time period of this investigation, identified the career mobility of the entrepreneurial class.
Over the past eighty years, neoclassical economists have largely ignored the role of the entrepreneur in economic affairs, choosing instead to focus on the theory of the firm and its role in the market. There were exceptions to this; however, interest in entrepreneurship has mostly been the result of a more recent revival. Economists, such as Kirtzner, Baumol, Drucker, and Casson, have again emphasised the role of the entrepreneur to create wealth, pursue innovation, and make decisions in an uncertain economic environment. In New Zealand, a few economic historians and business historians have considered entrepreneurial behaviour; other historians and management writers have written more generally about economic development and business behaviour. Largely, however, the historical community has neglected this area of research in favour o f other themes, such as class, politics, gender, war, and race. Commerce-a vital strand in national development and identity-begs to be tackled more vigorously.
What is the definition of the entrepreneur that is used in this research? Using the characteristics identified by Cantillon, Turgot, Smith, Marshall, Shumpeter, and Knight the entrepreneur can be defmed as a person who creates and owns a new econonuc enterprise; or someone who transforms an existing enterprise into a new econonuc entity.17! In doing so the entrepreneur assumes risk for providing their own livelihood and accepts the economic consequences of the decisions that they make. The entrepreneur generates wealth and reinvests profits thereby stimulating exchange in the
17! The theme of transformation is discussed in the research of Bernard Sarachek. See Sarachek, 'Horatio Alger i\Iyth', p.440.