The veteran Fringe figure - who yesterday gave the event’s first ever opening address - said artists should prepare themselves for the end of public investment in the arts.
He said artists should simply laugh at anyone who told them to think and act more like the business sector as it meant “colluding with a system in collapse”.
And he suggested acts wanting to appear the world’s biggest arts festival had a growing need to be a “liar, thief and vagabond” to be able to succeed at the Fringe because of the “enormous” costs involved.
The writer - who first came to the Fringe at the age of 18 - said there was a “curious paradox” about trying to bring a show to an event as “reckless and rewarding” as the Fringe.
But he urged them to leave “hucksterism, fakery and swindling” behind before taking to the stage to avoid the prospect of failure.
Ravenhill said there was a real possibility that all public investment in the arts would dry up over the next decade. And he said there was a need for the sector to think big “after lost years of cosying up to bankers and politicians”.
He said: “It’s at least worth thinking: ‘no public money’. Would that mean all of the performing arts becoming safer and duller? Would I be able to choose to ask the impossible questions without public investment?
“Or maybe even would I be able to ask the impossible questions without it? Maybe the artist free of any relationship with any public funding body is free-est of all?
“If I didn’t have to fill in forms, tick boxes, and prove how good, nice and worthy me and my project are to a well-meaning gatekeeper maybe I’d make something better - more truthful, more radical? Anything and everything is worth thinking about and questioning.
“You are artists. You are making art. You have your own language. You have your own unique way of doing things. You are making your own rules.
“Don’t look for business models from last year. Make it up as you go along. The audience here isn’t going to pay money to see you seeking a consensus, avoiding conflict, making do with the way things are right now, being nice and obedient, ticking the boxes that someone else has defined for you.
“The audience are paying money to see you be new, a freak, challenging, disruptive, naughty, angry, irresponsible, playful - whatever form telling the truth takes in your act.”
Meanwhile senior Fringe figures last night gave cautious reports on advance ticket sales as the event officially got underway.
Promoters and festival officials said there were growing signs the event had recovered from a box office slump in last year - when the world renowned event was held at the same time as the London Olympic games.
Although some officials said it was too early to give an accurate picture, others said early sales had returned to the same level they were two years ago.
The end of Scotland’s heatwave is also said to have boosted ticket sales over the last week.
Fringe officials said there was a marked contrast this year, compared to 2012, when ticket sales were said to be 25 per cent down.
Anthony Alderson, artistic director of the Pleasance, said: “Last year was so unusual because of the Olympics and we are pretty much back to where we were at this point two years ago.
“The break in the weather has made a big difference. People are really thinking about what they’re going to do this month. There seem to be a lot more locals about. I we’ll be tracking very closely to how we did in 2011, which was our best ever year.”
William Burdett-Coutts, artistic director of Assembly Festival, said: “We’re slightly up on where we were this time last year and slightly down on the previous year, but in 2011 we had bigger names that pre-sold tickets before the festival. I think we have an exceptionally strong programme this year.”
Kath Mainland, the Fringe Chief Executive, said: “I’ve not spoken to anyone who is unhappy about ticket sales at the moment.”