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Boettke, Rizzo, Klein, and Sautet on Kirzner

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03/10/2017

I am participating in a Liberty Matters dialog on Israel Kirzner's contributions to economics. The lead essay is by Peter Boettke, followed by responses by Mario Rizzo, Frederic Sautet, and myself. Boettke's contribution, "Israel M. Kirzner on Competitive Behavior, Industrial Structure, and the Entrepreneurial Market Process," provides an overview of Kirzner's analysis of the market process and its significance for economic theory. Rizzo responds with some methodological and epistemological qualifications, while Sautet attempts to put Kirzner's contributions in the broader context of Mises's system.

My own contribution is somewhat more critical, building on some of my previous writings on Kirzner's approach to competition and entrepreneurship (e.g., here, here, and here). While I recognize the significance of Kirzner's concept of entrepreneurship as alertness to profit opportunities, and his understanding of competition as a process of entrepreneurial discovery, I think there are other, equally "Austrian," approaches to these problems that are more fruitful. My own work is influenced by Frank Knight's and Mises's view on entrepreneurship as judgmental decision-making under uncertainty, and market competition as a process by which entrepreneurs compete against each other based on the quality of their judgments about the future. In this understanding, the whole question of convergence toward equilibrium -- which is central to Kirzner's analysis of the market -- is not a central issue, because market coordination requires only private property and economic freedom, not any particular theory of convergence. 

Boettke will soon write responses to Rizzo, Sautet, and myself, after which we will post short replies, and there will be some general back-and-forth, including comments from the public. Check the link above in the coming days for some interesting discussion!

Peter G. Klein is Carl Menger Research Fellow of the Mises Institute and W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University's Hankamer School of Business.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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