Synopses & Reviews
Synopsis
No other economist in recent times has been so closely identified with the Austrian School of economics as Israel M. Kirzner, professor emeritus of economics at New York University. A leader of the generation of Austrian economists after Ludwig von Mises and F. A. Hayek, Kirzner has been recognized as one of the minds behind the revival of entrepreneurship and market process theory in the twentieth century.
Competition and Entrepreneurship defines Israel M. Kirzner's unique contribution to the economics profession. Pointing out the shortcomings of the traditional microeconomic model, Kirzner offers an alternative and complementary view, which illuminates and enriches the way economists think of the market process.
Recognizing that economics cannot explain sheer novelty and ultimately social change by referring only to productive factors already in use, Kirzner develops a theory of the market process that focuses on the role of the pure entrepreneurial element in human action. This leads him to reconstruct the theory of price in order to understand, as he puts it, "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."
In doing so, Kirzner offers a new appraisal of competition moving the entrepreneurial function back to center stage, thereby shedding new light on issues such as monopoly pricing, cartels, and pure profit.
Israel M. Kirzner is a leading economist in the Austrian School and Emeritus Professor of economics at New York University.
Peter J. Boettke is University Professor of Economics and Philosophy at George Mason University and the BB&T Professor for the Study of Capitalism at the Mercatus Center. His publications include Calculation and Coordination and Living Economics. Since 1998 he has been the editor of the Review of Austrian Economics.
Frédéric Sautet is a visiting associate professor of economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine. He is the author of An Entrepreneurial Theory of the Firm and has published widely on entrepreneurship.
Synopsis
Competition and Entrepreneurship defines Israel M. Kirzner's unique contribution to the economics profession. Pointing out the shortcomings of the traditional microeconomic model, Kirzner offers an alternative and complementary view, which illuminates and enriches the way economists think of the market process. Kirzner develops a theory of the market process that focuses on the role of the pure entrepreneurial element in human action.
Israel M. Kirzner is a leading economist in the Austrian School and Professor Emeritus of Economics at New York University.
Peter J. Boettke is University Professor of Economics and Philosophy at George Mason University and the BB&T Professor for the Study of Capitalism at the Mercatus Center.
Frederic Sautet is a visiting associate professor of economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine.
Table of Contents
Introduction to the Liberty Fund Edition ix
by Peter J. Boettke and Frédéric Sautet
Preface xv
1. MARKET PROCESS VERSUS MARKET EQUILIBRIUM 1
The Market System and the Theory of the Market / The Task of Price Theory: Two Views / Competition and Entrepreneurship / The Market Process / Competition in the Market Process / Entrepreneurship in the Market Process / The Producer and the Market Process / Monopoly and the Market Process / The Entrepreneur as Monopolist / The Producer and His Choice of Product / Equilibrium Economics, Entrepreneurship, and Competition
2. THE ENTREPRENEUR 24
The Nature of Entrepreneurship / Decision-Making and Economizing / The Entrepreneur in the Market / The Producer as Entrepreneur / Entrepreneurial Profi ts / Entrepreneurship, Ownership, and the Firm / Ownership, Entrepreneurship, and the Corporate Firm / A Hypothetical Example / The Corporate Firm Once Again / Entrepreneurship and Knowledge / Entrepreneurship and the Equilibrating Process / Entrepreneurship in the Literature / Misesian Entrepreneurship
3. COMPETITION AND MONOPOLY 70
Competition: A Situation or a Process? / Entrepreneurship and Competition / The Meaning of Monopoly / The Two Notions of Monopoly Compared / The Theory of Monopolistic Competition / Some Remarks on the Notion of the Industry / Schumpeter, Creative Destruction, and the Competitive Process / Entrepreneurship as a Route to a Monopoly Position
4. SELLING COSTS, QUALITY, AND COMPETITION 108
On the Product as an Economic Variable / Production Costs and Selling Costs / Selling Costs, Consumer Knowledge, and Entrepreneurial Alertness / Advertising, Consumer Knowledge, and the Economics of Information / Advertising, Information, and Persuasion / Advertising, Selling Effort, and Competition / Waste, Consumer Sovereignty, and Advertising / Buying Effort, Factor Quality, and Entrepreneurial Symmetr
5. THE LONG AND THE SHORT 150
The Long and the Short Run in the Literature / On Sunk Costs and the Short Run / Costs, Profi ts, and Decisions / Entrepreneurial Decisions, the Long Run and the Short Run / Some Additional Cases / Further Observations on Long-Run Competition and Short-Run Monopoly
6. COMPETITION, WELFARE, AND COORDINATION 170
The Fundamental Flaw in Welfare Economics / Knowledge, Coordination, and Entrepreneurship / The Coordinating Process / The Role of Profi ts / Resource Misallocation, Transaction Costs, and Entrepreneurship / Nirvana, Transaction Costs, and Coordination / The “Wastes” of Competition / Long-Run and Short-Run Evaluations
Index 195