Scope For Superior Entrepreneurial Prescience

The future does not now exist, but we endeavour to grasp that future somehow in our imaginations. Some of us are more successful at this endeavour than others are. The mistakes, the errors, made by the latter, turn out to constitute the profit opportunities grasped by the more successful. In fact, it is the opportunity for profit so constituted which sparks the entrepreneurial imagination of the more prescient, the more 'alert', among human beings.14 (It is certainly not any equilibrium...

Entrepreneurship And The Austrian Middle Ground

In a paper several years ago (Kirzner 1985a ch. 1 and fn. 9), which explicitly drew its inspiration from the Garrison thesis, the present writer applied the thesis to locating an Austrian view of the entrepreneur within the spectrum of relevant viewpoints to be found within the profession. Two opposing 'extreme' views concerning entrepreneurship were identified. One view of the entrepreneur sees him as responding frictionlessly, and with full co-ordination, to market conditions, with pure...

Austrian Middle Ground And Entrepreneurial Error

Sometimes radical subjectivist critics seem to ascribe to middle ground Austrians the notion that alert entrepreneurs are exempt from the po ssibility of making errors they somehow have the capacity of seeing future events correctly. This is certainly not the case or, at the very least, not without careful qualification. First, the Austrian theory of the entrepreneurial equilibration process relies, as Loasby (1982 117 1989 160-1) has perceptively noted, on some entrepreneurs being more alert...

Simultaneous Levels Of Economic Understanding

My story of the developing articulation of the modern Austrian perspective is complicated, especially with regard to the calculation debate, by the circumstance that from that perspective there appear to be three distinct levels of economic understanding with regard to the price system. It may be useful for me to spell these out at this point. They are, respectively, (1) the recognition of scarcity, (2) the recognition of the role of information and (3) the recognition of the role of discovery....

The Unfolding Of The Discovery View

What seems to have been the case is something like the following. The earlier Austrians were simply not aware of their own implicit acceptance of a process view, rather than an equilibrium view, of markets. One is not always aware that one is speaking prose or, perhaps more to the point, one is not always aware that one is breathing. If Jaffe found it necessary to 'dehomogenize' the economics of the Walrasian, Jevonsian and Austrian schools (Jaffe 1976), this was not merely because outside...

The Market As A Process Of Discovery

With the benefit of hindsight, we now understand that, in the Austrian view of the market, its most important feature is (and was) the dynamic entrepreneurial-competitive discovery process. We know now that, for Mises, the idea of a price that does not reflect and express entrepreneurial judgement and hunch is virtually a contradiction in terms. (It is for this reason that Mises rejected Lange's contention that socialist managers may be able to take their bearings from - and to calculate on the...

The Puzzle Of Prescience

Yet it must be immediately acknowledged that we have not yet fully grappled with the key problem raised by the radical subjectivists. We envisage entrepreneurs -and, as is well known from the work of Mises and of Shackle, we are all entrepreneurs - endeavouring to imagine the future. Yet that imagined future must depend upon their own decisions. The future-to-be-imagined is not the future course of events which would ensue (with all the creativity and novelty of the actions that will make up...

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Foundations of the market economy series Edited by Mario J. Rizzo, New York University and Lawrence H. White, University of Georgia A central theme of this series is the importance of understanding and assessing the market economy from a perspective broader than the static economics of perfect competition and Pareto optimality. Such a perspective sees markets as casual processes generated by the preferences, expectations and beliefs of economic agents. The creative acts of entrepreneurship that...

On Teleological And Nonteleological Perspectives

Buchanan and Vanberg 1990 develop the distinction between what they call the 'teleological' and the 'non-teleological' perspectives as follows. In the teleological view 'the efficacy of market adjustment is measured . . . in terms of the relative achievement of some pre-defined, pre-existing standard of value' p. 18 . Clearly it is the teleological view which depends upon the conceptualization of 'objective facts' the very notion of which was challenged, we saw, by Kregel , independent of...