truth can be illustrated by a phenomenon which is fairly
familiar. It is recognized by intelligent persons that the risks of
speculation in a particular commodity market or stock market increase
more than proportionately to the scale of operations. A man who sets
out as a "bull" upon a small scale can buy without sending up the
price against him in the process, and, if he decides later that his
judgment is mistaken, he can at any time cut his losses and sell out
without much difficulty. But a "bull" on a very large scale cannot
complete his purchases except at a price which has been raised in
consequence of his own action, and he cannot count on being able to
"unload" at or near the market price, should he decide to do so. If,
accordingly, he miscalculates, he cannot save himself from serious
loss as a smaller man might do by a prompt discovery of his error. His
difficulties spring from the fundamental fact that the effects of his
calculations are too great to be offset by those of the different, and
often opposite, calculations of other men.

Upon the issue whether a growth in the size of the business unit is
likely to diminish risk, the law of averages thus cuts both ways. The
risks arising from the element of pure chance are more likely, those
arising from miscalculation are less likely, to cancel out. Upon
these grounds alone, it would be unsafe to conclude that there would
be on balance an economy of risk under any system of national or world
socialism.

Sec.5. _The Entrepreneur_. There remains, however, an aspect of the
problem which is perhaps more important than those discussed above. It
is probable that risks would be estimated and undertaken more wisely
or less wisely under a different system of society or of industrial
organization? Upon this issue, methods of precise analysis are out of
place, but we may have something to learn from the emphatic testimony
of tradition. It has become an axiom of business men that, while
Governments can manage with more or less competence a safe and routine
business like a Postal Service, their success would be unlikely to
prove conspicuous in undertakings where the element of risk is
great. There, it is said, we owe everything in the past to the
enterprise of individual men (for even joint-stock companies have not
been notable as pioneers) adventuring their own fortunes in accordance
with their own unfettered judgment. This contention, however much we
may desire to quali