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Competition and Entrepreneurship
Stressing verbal logic rather than mathematics, Israel M. Kirzner provides at once a thorough critique of contemporary price theory, an essay on the theory of entrepreneurship, and an essay on the theory of competition. Competition and Entrepreneurship offers a new appraisal of quality competition, of selling effort, and of the fundamental weaknesses of contemporary welfare economics.
Kirzner's book establishes a theory of the market and the price system which differs from orthodox price theory. He sees orthodox price theory as explaining the configuration of prices and quantities that satisfied the conditions for equilibrium. Mr. Kirzner argues that "it is more useful to look to price theory to help understand how the decisions of individual participants in the market interact to generate the market forces which compel changes in prices, outputs, and methods of production and in the allocation of resources."
Although Competition and Entrepreneurship is primarily concerned with the operation of the market economy, Kirzner's insights can be applied to crucial aspects of centrally planned economic systems as well. In the analysis of these processes, Kirzner clearly shows that the rediscovery of the entrepreneur must emerge as a step of major importance.
Kirzner's book establishes a theory of the market and the price system which differs from orthodox price theory. He sees orthodox price theory as explaining the configuration of prices and quantities that satisfied the conditions for equilibrium. Mr. Kirzner argues that "it is more useful to look to price theory to help understand how the decisions of individual participants in the market interact to generate the market forces which compel changes in prices, outputs, and methods of production and in the allocation of resources."
Although Competition and Entrepreneurship is primarily concerned with the operation of the market economy, Kirzner's insights can be applied to crucial aspects of centrally planned economic systems as well. In the analysis of these processes, Kirzner clearly shows that the rediscovery of the entrepreneur must emerge as a step of major importance.
256 pages, Paperback
First published January 1, 1973
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567 people want to read
About the author
Israel M. Kirzner
63 books42 followersLeading economist of the Austrian School.
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Displaying 1 - 10 of 10 reviews
March 24, 2021
2021-03-24 Reading a friend's review of this book reminded me that I have indeed read parts of this book and listened to talks by the author many times that discuss the main topics of the book, so I am actually quite familiar with the book, if not the complete text.
So, that said, I want to point people to that review of this book by Pedro Jorge that I just mentioned, since it is so good: https://www.goodreads.com/review/show...
I did add some of my own comments after that review too, so you can see those there also.
So, that said, I want to point people to that review of this book by Pedro Jorge that I just mentioned, since it is so good: https://www.goodreads.com/review/show...
I did add some of my own comments after that review too, so you can see those there also.
March 21, 2021
This is a magnificent, eloquent and path-breaking treatise.
Although Kirzner is indeed widely respected as a leading figure within the Austrian tradition, I think this book tends to be somewhat underrated in most discussions of Austrian Economics. Even if most Austrian economists recognize and respect the Kirznerian idea of entrepreneurial "alertness", it seems to me that the point is not sufficiently made that this IS a must read book in the Austrian catalog.
In fact, given its relatively short length and the thoroughness and originality and acuteness of the author's discussions, this should indeed be seen as a must read for any student of economics. I am certain that many considerations contained herein have not been sufficiently grasped by the profession at large, much less by most students who leave university with a degree.
Following his teacher Ludwig von Mises, Kirzner presents the notion of entrepreneurship and the entrepreneurial aspect of human action, presents the role of profits and losses and of the market as an economic process. He discusses and contrasts his concept with those of Schumpeter and Frank Knight's. He dissects the foundations of the perfect competition model and then proceeds to criticize the subsequent monopolistic competition paradigm as still too embedded in the equilibrium perspective. He discusses the concept of monopoly, contrasting the equilibrium and the market process perspectives. I'm sure most economics students are completely unaware and would be quite amazed at the arguments put forward by Kirzner against the standard account of monopoly vs competition.
Kirzner also provides a defense of advertising and selling costs as part of the market process, presenting the brilliant argument that the entrepreneur's function is not only to stand alert to profit opportunities in the factors' markets, but also to inform the consumer of his discoveries and indeed, to a certain extent, to save the consumer from the need to be an entrepreneur himself. The entrepreneur really shines through the whole book as the brain and guts of the market process, even if always subject to the ultimate decision of the ruthless consumer.
Kirzner also provides some insights into the controversial field of welfare economics. Anticipating Huerta de Soto's "dynamic efficiency" argument, Kirzner suggests that there is indeed some room for the economist to express his preference for those systems that provide the right incentives for human creativity and entrepreneurial discovery - that is, that the market process can be seen as more efficient than its alternatives, even though that may not appear to be the case at each specific moment in time (a point also raised by Schumpeter).
The subtlety of Kirzner's writing and arguing, as well as his careful and broad acquaintance with the relevant literature of his time, is a pleasure for any "literary" economist.
So, in the end, my point is: even if you think you already grasped the fundamental Kirznerian insight, this book is still a must read. Although it is sort of more "academic" in tone than, for example, Rothbard's or Mises's works, it should still be regarded as a foundational work in the Austrian tradition.
Although Kirzner is indeed widely respected as a leading figure within the Austrian tradition, I think this book tends to be somewhat underrated in most discussions of Austrian Economics. Even if most Austrian economists recognize and respect the Kirznerian idea of entrepreneurial "alertness", it seems to me that the point is not sufficiently made that this IS a must read book in the Austrian catalog.
In fact, given its relatively short length and the thoroughness and originality and acuteness of the author's discussions, this should indeed be seen as a must read for any student of economics. I am certain that many considerations contained herein have not been sufficiently grasped by the profession at large, much less by most students who leave university with a degree.
Following his teacher Ludwig von Mises, Kirzner presents the notion of entrepreneurship and the entrepreneurial aspect of human action, presents the role of profits and losses and of the market as an economic process. He discusses and contrasts his concept with those of Schumpeter and Frank Knight's. He dissects the foundations of the perfect competition model and then proceeds to criticize the subsequent monopolistic competition paradigm as still too embedded in the equilibrium perspective. He discusses the concept of monopoly, contrasting the equilibrium and the market process perspectives. I'm sure most economics students are completely unaware and would be quite amazed at the arguments put forward by Kirzner against the standard account of monopoly vs competition.
Kirzner also provides a defense of advertising and selling costs as part of the market process, presenting the brilliant argument that the entrepreneur's function is not only to stand alert to profit opportunities in the factors' markets, but also to inform the consumer of his discoveries and indeed, to a certain extent, to save the consumer from the need to be an entrepreneur himself. The entrepreneur really shines through the whole book as the brain and guts of the market process, even if always subject to the ultimate decision of the ruthless consumer.
Kirzner also provides some insights into the controversial field of welfare economics. Anticipating Huerta de Soto's "dynamic efficiency" argument, Kirzner suggests that there is indeed some room for the economist to express his preference for those systems that provide the right incentives for human creativity and entrepreneurial discovery - that is, that the market process can be seen as more efficient than its alternatives, even though that may not appear to be the case at each specific moment in time (a point also raised by Schumpeter).
The subtlety of Kirzner's writing and arguing, as well as his careful and broad acquaintance with the relevant literature of his time, is a pleasure for any "literary" economist.
So, in the end, my point is: even if you think you already grasped the fundamental Kirznerian insight, this book is still a must read. Although it is sort of more "academic" in tone than, for example, Rothbard's or Mises's works, it should still be regarded as a foundational work in the Austrian tradition.
February 5, 2019
When I first read the book, some parts, in the university, it changed my views. Now I have read it as a whole and it was not so impressive.
The author develops ideas of L. von Mises, bring it in the context of mainstream economics, while also came up with ideas of its own.
Aiming to shift attention from equilibrium to the market (competitive) process I. Kirzner masterfully defended this approach. His ideas how monopoly could be defined are interesting and potential.
Nevertheless, the author spoiled a good idea with the intention to defend monopolies from any regulation despite circumstances.
The author develops ideas of L. von Mises, bring it in the context of mainstream economics, while also came up with ideas of its own.
Aiming to shift attention from equilibrium to the market (competitive) process I. Kirzner masterfully defended this approach. His ideas how monopoly could be defined are interesting and potential.
Nevertheless, the author spoiled a good idea with the intention to defend monopolies from any regulation despite circumstances.
February 27, 2020
Still groundbreaking, despite written nearly 50 years ago. Kirzner masterfully unveils what's at the heart of our market economy: entrepreneurship, or people's alertness to gain from unrealised economic ventures. Basic yet still overlooked by mainstream economists and policymakers today.
A must-read for those wanting to understand the operations of the market.
A must-read for those wanting to understand the operations of the market.
June 9, 2020
Vindo da tradição liberal de mises e hayek, kirzner desenvolve a ideia da competição e suas implicações de uma economia desregulamentada . A ideia de estado de atenção é central na postura empresarial, que deve ser disposta e adaptativa.
March 11, 2022
Simply put, this book was masterful. Kirzner brilliantly criticizes the exclusive emphasis on equilibrium analysis that characterizes orthodox price theory whilst supplanting said approach with a more dynamic, realistic, process oriented perspective. Rather then setting the stage for an eventual transition to equilibrium, the assumptions underlying mainstream theoretical models simply assert equilibrium into existence. Drawing on the Misesean concept of purposeful action, Kirzner distinguishes between the “Robbinsian maximizer” element and the “entrepreneurial” element comprising human decision making. The former maximally utilizes given means to attain given ends, the latter is on his toes constantly searching for the means-ends framework in question. The recognition of these fundamental insights allows Kirzner to explicate the process by which imperfectly informed actors spontaneously bring their plans into greater and greater consistency. What follows are pathbreaking considerations with respect to the theory of perfect competition, the theory of monopolistic competition, production costs/selling costs, long run vs short run, welfare economics, and so much more. A must read for any serious student of the Austrian school.
July 26, 2022
No matter how much you agree with the content, I think its not worth a full-length book. More like a long journal article. It just seems like he says something uncontroversial and make is sound like a revelation, such as "alertness toward new opportunities is stimulated by the heady scent of profits." Over and over again. However, if you can tolerate the style, go ahead and read it.
June 1, 2025
Super interesting, even though I never even thought of this as an issue.
Is the entrepreneur the destructor of market equilibrium or the creator of it?
I guess we'll never find out.
Is the entrepreneur the destructor of market equilibrium or the creator of it?
I guess we'll never find out.
August 16, 2012
Muito mal escrito. Vale só pela contracapa.
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September 23, 2010Competition and Entrepreneurship by Israel M. Kirzner (1978)
Displaying 1 - 10 of 10 reviews