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Home | Blog | Science Fiction, Fantasy, and Entrepreneurial Alertness

Science Fiction, Fantasy, and Entrepreneurial Alertness


For fans of the science fiction and fantasy genres, Stephen R. Donaldson probably needs no introduction. For those not so familiar, Donaldson has penned numerous novels and short stories, many to critical acclaim, and is the author of the recently-concluded Chronicles of Thomas Covenant, widely regarded as one of the best fantasy series of the last forty years.

I’m currently reading Donaldson’s novel The Real Story, which is the first of five volumes in his sci-fi epic The Gap Cycle. In an afterword to the book, Donaldson explains in great detail how the idea for The Gap Cycle was conceived and, through various twists and turns, eventually completed. What strikes me most is the way Donaldson describes the writer’s creative process:

Most writers hate the question, “Where do you get your ideas?”

This is because the answer tends to be at once ineffably mysterious and excruciatingly mundane. We are all in love with the magic of the imagination—otherwise we wouldn’t be able to survive as creative artists—but none of us can explain how it works. In a sense, writers don’t get ideas: ideas get writers. They happen to us. If we don’t submit to their power, we lose them; so by trying to control or censor them we can make the negative choice of encouraging them to leave us alone. But we can never force ourselves to be truly creative. The best we can do is to teach ourselves receptiveness—and trust that ideas will come…

For some reason, a fair number of my best stories arise, not from one idea, but from two. In these cases, one idea comes first; it excites me enough to stay with me; yet despite its apparent (to me) potential, it stubbornly refuses to grow. Rather than expanding to take on character, event, and context, it simply sits in my head—often for many years—saying over and over again, “Look at me, you idiot.” If you just looked at me, you would know what to do with me. Well, I do look; but I can’t see what I need—until the first idea is intersected by the second.

What I find intriguing about this passage is that in describing his inspirations, Donaldson seems to capture the essence of Israel Kirzner’s theory of entrepreneurship as alertness to opportunities. The key feature of Kirzner’s theory is that opportunities tend to be discovered spontaneously by entrepreneurs who are not actively looking for them. Instead, the lure of a pure profit opportunity creates a special incentive for entrepreneurs that causes them to notice the opportunity. I read Donaldson as taking very much the same approach; he even goes so far as to say that when he actively looks at ideas (searching for meaning) they end up revealing nothing. For him then, artistic creativity is also spontaneous.

Yet even though creativity and alertness cannot be directly and consciously produced, Donaldson and Kirzner take things a step further by talking about how creativity can be discouraged. Donaldson points out that trying to artificially control or censor ideas prevents them from bearing fruit for the artist. Likewise, Kirzner has also argues that economic policies impinging on entrepreneurial profits prevent opportunities from presenting themselves to entrepreneurs, which in turn hampers the market’s ability to clear and stymies economic growth. Seen in this light, there are some important parallels between entrepreneurship and artistic creativity.

However, The Real Story is so named because of the way Donaldson constructs the narrative: he first gives the reader an outsider’s view of the events, and then proceeds to explain “what really happened.” In the same spirit, I should point out that the idea of the alert and non-searching entrepreneur is not without its critics, and there are alternative ways to look at entrepreneurship that add to our understanding of the creative process. In fairness to Professor Kirzner, I should take care when comparing different kinds of alertness and discovery. Kirzner’s work is mostly focused on explaining the equilibrating tendencies of the market, so we should not place his ideas in some other context and then complain if they come up short. Still, I believe Donaldson’s self-portrait helps highlight some of the objections that have been raised against the theory of entrepreneurial alertness.

For instance, some scholars (such as Harold Demsetz) have argued that spontaneous discovery ultimately reduces to a kind of luck. If this is true, then it’s difficult to say much about how entrepreneurs are inspired, or how we can encourage or discourage entrepreneurial behavior. For similar reasons, Nicolai Foss and Peter Klein argue in one of their papers that the entrepreneur in Kirzner’s system is simply an explanation of market coordination, but not of real-world entrepreneurship. By the same token, appealing to the sudden appearance of an idea doesn’t tell us much about how a writer like Donaldson actually produces and develops ideas.

A second problem relates to the view that an idea or opportunity—as opposed to a concrete action—as the driving force behind creativity. Notice how Donaldson anthropomorphizes ideas, as if they were thinking and acting entities. Of course, as a storyteller, it is only natural that he would depict the process of developing ideas in a non-literal way. But metaphors can be misleading in discussions of economic theory, especially regarding entrepreneurial opportunities (which are notoriously difficult to define in the first place). Here, artistic description and entrepreneurial discovery part ways.

They key point is that Kirzner seems to imply that opportunities cause themselves to be discovered. As Guido Hülsmann observes, this use of causation is a strange one, as it indicates that opportunities themselves take action; but opportunities are just conditions in the real world (such as price differentials), so it is not clear how they could act or cause entrepreneurs to notice these conditions. Kirzner recognizes that causation is a potential problem in his book Discovery and the Capitalist Process, where he calls it a “paradox” (1985, pp. 108-109). In a new paper, I argue that the paradox doesn’t seem to be solvable using Kirzner’s conventional tools, and especially without incorporating some type of entrepreneurial judgment or search for opportunities.

A third issue concerns the entrepreneurial process after the initial inspiration. While it is true that a writer needs to discover or create an idea, he or she also requires resources to bring ideas into the world. Resources include everything from the basic implements of writing to personal and financial support, and above all, the writer’s time. It might be true that the initial inspiration has no cost, but everything else—everything needed to produce a writer’s art—entails some combination of land, labor, and capital. Likewise, understanding the entrepreneurial market process in the real world means we have to carefully consider how resources are used by entrepreneurs, and how their decisions play out in the context of time and uncertainty.

However, Donaldson does raise an important point about ideas and inspiration, a point I believe shines through in Kirzner’s work as well. That is, the creative process is often “excruciatingly mundane.” Donaldson believes this is actually the reason most writers are reluctant to discuss the creative process, because it is simply not that interesting (for example, he relates how a key scene from one his novels was inspired by a can of Lysol). The mundane poses a problem, because as he points out, “In these cases, the concrete source of the idea seems to demean its underlying imaginative magic.” When it comes to the creativity of the artists and thinkers we admire, our inclination is often to expect, even demand, an epic human saga that engages us as much as the final product does.

This is often true of entrepreneurship as well as art. Especially due to the influence of Schumpeter’s theory, entrepreneurs are often thought of as romantic, heroic innovators, or creative destroyers of the status quo. And while this kind of entrepreneurship does exist (e.g. cases of disruptive innovation), real-world entrepreneurship is often “mundane.” In this sense, it’s not a surprise that Donaldson’s term happens to be the same one used by Peter Klein to describe the essence of Austrian economics.

In fact, it is market entrepreneurship that brings the stuff of science fiction into everyday life to the point where it becomes mundane. The results of entrepreneurship are as awe-inspiring as any science fiction or fantasy we can imagine (and in a sense, much that we can’t). Yet despite its astonishing effects, at its core entrepreneurship is a struggle that requires inspiration, resources, and good judgment before it comes to fruition.

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