Competition & Entrepreneurship

Kirzner rebuilds price theory around the figure neoclassical economics has no room for. In a model that describes equilibrium states, every opportunity is already taken and the entrepreneur has nothing to do; Kirzner shifts the subject to the market process and makes its driver alertness — the noticing of a discrepancy, an unexploited gap between what something sells for here and there, that nobody has yet seen. Competition follows from that: not a market structure to be measured by counting firms, but the rivalrous discovery procedure through which errors get found and corrected. His entrepreneur is an arbitrageur of overlooked knowledge, which is the contrast usually drawn with Schumpeter’s disruptive innovator.

Why it’s on the list: It closes the curriculum’s Austrian school section, and it is where that section’s epistemology becomes a theory of business — the entry a builder reading this list is most likely to recognize as being about his own work.

Where I saw it: Brendan McCord’s Philosopher-Entrepreneur Reading List, in the section on Austrian School Economics. The full 211-entry transcription is on The Philosopher-Entrepreneur Reading List.

Connections

• Entrepreneurship — the book’s subject, given a formal role in economic theory.
• Markets — reconceived as a discovery process rather than a state.
• Innovation — the adjacent account of what entrepreneurs contribute.
• The Philosopher-Entrepreneur Reading List — the curriculum this came from.