SUMMARYIn this paper it has been argued that a comparison between Schumpeter's entrepreneur type and a charismatic leader developed by Max Weber discloses certain factors that can be utilized to make the Schumpeterian construct a more useful conceptual tool.Both Schumpeter and Weber were faced with very similar analytical problems, In each case it was necessary to explain how the dynamics of change could be encompassed within a functional system. In each case a disturbing force was introduced. Schumpeter called his the entrepreneur—Weber's designation was the charismatic leader. Schumpeter attempted to make the entrepreneur endogenous to the system he was attempting to explain. Weber's type was frankly exogenous to any system. The strength of Schumpeter's position was that he could explain in some measure how the entrepreneur could be nurtured. The weaknesss was that the type never remained completely endogenous to the capitalism to which Schumpeter related it.If the entrepreneur‐type is viewed as a sub‐type of the Weberian charismatic leader certain analytical advantages can be realized. The Weberian type is a generalized one that may take a number of forms. The Schumpeterian type is specific and is dependent upon certain objective conditions for it to emerge. In this paper it has been argued that the minimum essentials for the emergence of the entrepreneur‐type from the more generalized type are the following: (1) accessible resources, (2) large markets, (3) an independent banking system, (4) consumer choice, and (5) calcuable law. There is no plea made for the values that may underlie the attainment of these objective conditions but that merely if charisma is to be channeled into entrepreneurship, rather than any of the other numerous paths it may take, then these conditions as they have been explained must be present.A better understanding of the significance and the usefulness of Weber's type can be gained to the extent that a large variety of other sub‐types are constructed and the objective conditions for their operation explored. In this way, it is argued, the significance not only of Weber's type can be better understood but the value of Schumpeter's entrepreneur may be realized both as it stands by itself and as it is supported by a variety of other types. The policy implications of this kind of analysis seem particularly important in a world characterized not only by great change but by a wide variety of conditions that may channel charisma into as wide a variety of d