• Unit 8: Profit and Loss

    Unit 8 explains Mises' conception of capitalism as an entrepreneurial system, and not a managerial system, by elaborating on the economic significance of profit and loss in a market system. Capitalism is predicated upon the ability of individuals to perform economic calculations of profit and loss on their capital and property, as it is these decisions which allow for the rational planning of production, and for the coordination of work among various factors of production.

    Completing this unit should take you approximately 3 hours.


    • Upon successful completion of this unit, you will be able to:

      • Discuss why process of entrepreneurship depends on the private property owners ability to calculate profit and loss on different course of action.
      • Explain the concepts of profit, loss and entrepreneurial speculation.
      • Explain how and why capitalism is better understood as entrepreneurial rather than managerial system.
      • Explain the effects of entrepreneurial investment, such as higher productivity and longer process of production.

    • 8.1: Capitalism Lecture

      • 8.1: Lecture Page

        The process of entrepreneurship is dependent on private property owners performing calculations of profit and loss on different courses of actions. This is the hallmark of capitalism. Watch this lecture to understand why this is the case, and why other arrangements are incapable of performing rational economic calculation. Topics covered include: • Entrepreneurial Speculation • Capitalism as an Entrepreneurial System • Capitalism is not a managerial system • The Effects of Entrepreneurial Investment

    • 8.2: Capitalism Discussion

      • 8.2: Discussion Page

        Since you have watched the video lecture for unit 8, it's time to watch Dr. Saifedean moderate a discussion on the unit's theme by addressing questions asked by your fellow classmates. As you watch the discussion unfold, take notes to help you retain information. Make sure you watch the entire discussion seminar video, otherwise you may skip over important points. To get the best learning experience and mastery of the major concepts covered in this unit, you'll want to watch all videos in their entirety.

    • 8.3: Capitalism Review

      • 8.3 Review: Profit and Loss Page

        This resource contains a summary of some of the key concepts discussed in unit 8. Don't skip ahead - the information on this page is easier to understand if you have watched the video lecture and discussion seminar video in their entirety. Bookmark this resource to keep it handy during studying.