And Joseph said unto Pharaoh, The dream of Pharaoh is one: God hath shewed Pharaoh what he is about to do…This is the thing which I have spoken unto Pharaoh: What God is about to do he sheweth unto Pharaoh (Gen. 41:25, 28).
Joseph had demonstrated his administrative competence to Potiphar, captain of the guard, and to the Egyptian jailer. He had also shown his ability to interpret prophetic dreams to the Pharaoh’s butler. The butler recommended Joseph to Pharaoh when Pharaoh confronted a dream which he could not understand. They brought him from the dungeon, and Pharaoh described his visions of the seven fat animals being devoured by the seven lean ones, and the seven fat ears of corn being devoured by the seven lean ones. Joseph informed Pharaoh that the dream revealed the coming of seven years of agricultural prosperity, to be followed by seven years of famine. As for the two separate visions, “the dream was doubled unto Pharaoh twice; it is because the thing is established by God, and God will shortly bring it to pass” (41:32). Joseph entertained no doubts whatsoever. This was the prophetic word of God.
Pharaoh wisely listened to Joseph’s interpretation. When Joseph then recommended that Pharaoh seek out a man “discreet and wise, and set him over the land of Egypt,” to direct the collection’ of one-fifth of the grain during the seven years of plenty, Pharaoh appointed Joseph (41:33-43). Not only did Joseph’s prophecy come true, but he also once again proved himself to be a reliable and efficient administrator of men. Because of his unique combination of economic foresight (in this case prophetic in nature) and efficient administration, Joseph stands out as the Bible’s archetype of the entrepreneur.
It is the task of the entrepreneur to forecast the future accurately, at least in so far as it affects his business, and then to plan effectively to meet the economic demands of consumers in that expected future. Of all the economic functions of the free market, this is the pivotal one. It is the ability of men to estimate the demands of their fellow men in the future, and then to produce in terms of those demands without wasting scarce economic resources, which makes it possible for society to advance beyond the most primitive methods of production. The individual who does plan efficiently for the future, producing goods or services that satisfy the demand of consumers at the prices he expected them to pay, reaps a reward, entrepreneurial profit or pure profit. It is an economic residual, funds remaining after payment has been made for raw materials, labor, capital equipment, interest, rent, and taxes.
The person who misforecasts the future, or who is unable to foresee the costs of delivering his goods and services to the waiting consumers, eventually produces losses. He is forced to dip into his capital in order to stay in business. If the losses continue, he loses control of capital resources, and others who are able to meet future consumer demand with less waste are able to buy these resources from him. In the competitive auction market for scarce economic resources, the profit-making individuals are the more effective bidders for resources, transferring them to their own companies in order to meet the demands of consumers. The consumer benefits, for he is able to purchase more resources at the end of the production process, precisely because there has been less waste of land, labor, and capital in delivering the goods to him. The consumers therefore determine the success or failure of entrepreneurs.
Those who waste resources by failing to meet consumer demand at prices the consumers, through buyers’ competition, are willing to pay, are penalized by consumers, while those who are successful are rewarded with entrepreneurial profit. A free market encourages consumer satisfaction and economic efficiency.
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