rely
mercantile operation of getting a title to a product and then
surrendering it can be carried on as well in one place as in another.
The _entrepreneur_ in his capacity of buyer and seller does not even
do the work which purchases and sales involve. That is commonly done
by agents. Some of it, of course, may be done by the responsible
manager himself, and if that person is also the _entrepreneur_, it
follows that he does a part of the commercial labor of his business.
In this, however, he goes beyond his function as _entrepreneur_. In
that capacity he does, as we have said, no labor of any kind. Sales
and purchases are made in his name, but he does none of the work that
leads up to them.[1]

[1] The holders of common stock in a corporation are always
_entrepreneurs_, and they are also capitalists if the stock
represents any real capital actually paid in. If the bonds
and the preferred stock represent all the real capital that
there is, any dividends that may be paid on the common stock
are a pure _entrepreneur's_ profit. If, on the other hand,
the stock all represents money actually put into the
business, the dividends on it contain an element of net
profit if they exceed simple interest on the capital and
insurance against the risks that are not guarded against by
actual insurance policies. If the rate of simple interest is
four per cent, and the value of the unavoidable risk is one
per cent, then a dividend of six per cent contains a pure
_entrepreneur's_ profit of one per cent. In dynamic
conditions such a return is often to be expected, and we
shall soon study the conditions that afford it.

In the present study we do not need to consider risks,
inasmuch as the greater part of them arise from dynamic
causes; that is, from the changes and disturbances to which
the business world is subject. An invention promises greatly
to cheapen the production of some article and, for a time, to
insure large returns for the men who first utilize it. A
capitalist may be willing to take a risk for the sake of
sharing this gain; but in time both the risk and the gain
will vanish. The capacity of the new appliances will have to
be tested, a market for their output found, etc. A small
remainder of risk is still entailed upon the capitalist if he
leaves his money in this business. The death of the managing
partner,