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<p>[QUOTE=&quot;kaparthy, post: 729041, member: 57463&quot;]<b>First Principles</b></p><p><br /></p><p>It is a principle of (Austrian) economics that the past is irrelevant. </p><p><br /></p><p>Recently, there was a debate in The New Individualist on whether entrepreneurs earn their profits from risk or from the unknown.&nbsp; Risk is calculable.&nbsp; Peter Bernstein in <i>Against the Gods</i> says that the capitalist era was born when Pascal and Fermat created the arithmetic of risk.&nbsp; On the other hand, if entrepreneurial profit were a matter of mere risk, then anyone could do the arithmetic and (a) no business would ever fail and (b) all businesses would earn approximately the same profit.&nbsp; So, it is argued that profit comes from an unquantifiable, primary opportunity to correctly guess the unpredictable future.</p><p><br /></p><p>Be that as it may, the sun has always come up in the East.&nbsp; Therefore the sun will come up in the East tomorrow.&nbsp; Gold is stable.&nbsp; Gold has been stable.&nbsp; Gold will be stable.</p><p><br /></p><p>On the other hand, a batting average of .343 says nothing about whether the batter will hit the next pitch.</p><p><br /></p><p>All of which is to say: there are no easy answers.[/QUOTE]</p><p><br /></p>

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