Kirzner on Kirzner

14 January 2009 at 11:42 pm 1 comment

| Peter Klein |

In a recent paper I wrote that much of the contemporary entrepreneurship literature on opportunity identification

misses . . . the point of Kirzner’s metaphor of entrepreneurial alertness: namely that it is only a metaphor. Kirzner’s aim is not to characterize entrepreneurship per se, but to explain the tendency for markets to clear. In the Kirznerian system, opportunities are (exogenous) arbitrage opportunities and nothing more. Entrepreneurship itself serves a purely instrumental function; it is the means by which Kirzner explains market clearing.

Some readers have challenged me on this point. In my defense, I call upon none other than Israel Kirzner, whose newest paper, “The Alert and Creative Entrepreneur: A Clarification,” appears in the February 2009 issue of Small Business Economics (working-paper version here). Kirzner seeks to clarify the nature of his classic contribution, concerned that he has been misinterpreted by friend and foe alike. Writes Kirzner: 

[M]y own work has nothing to say about the secrets of successful entrepreneurship. My work has explored, not the nature of the talents needed for entrepreneurial success, not any guidelines to be followed by would-be successful entrepreneurs, but, instead, the nature of the market process set in motion by the entrepreneurial decisions (both successful and unsuccessful ones!). . . . This paper seeks (a) to identify more carefully the sense in which my work on entrepreneurial theory does not throw light on the substantive sources of successful entrepreneurship, (b) to argue that a number of (sympathetic) reviewers of my work have somehow failed to recognize this limitation in the scope of my work (and that these scholars have therefore misunderstood certain aspects of my theoretical system), (c) to show that, despite all of the above, my understanding of the market process (as set in motion by entrepreneurial decisions) can, in a significant sense, provide a theoretical underpinning for public policy in regard to entrepreneurship.

Kirzner devotes the bulk of his attention to the contrast between Kirznerian and Schumpeterian entrerpreneurship, while my paper focuses on the differences between Kirzner and Knight. Still, I’m gratified that Kirzner appears to view today’s applied entrepreneurship literature, in relation to his own work, the same way I do.

Entry filed under: - Klein -, Austrian Economics, Entrepreneurship.

Getting Serious about Economic Stimulus More on Open-Source Peer Review

1 Comment Add your own

  • 1. lwaaks  |  15 January 2009 at 7:45 pm

    Sounds to me like you have nearly replicated that moment in Annie Hall where Marshall McLuhan suddenly appears to support W. Allen’s interpretation of his work in opposition to the person he is debating.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Nicolai J. Foss | home | posts
Peter G. Klein | home | posts
Richard Langlois | home | posts
Lasse B. Lien | home | posts


Former Guests | posts


Recent Posts



Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

%d bloggers like this: