Entrepreneurial Opportunities

Schumpeterian and Kirznerian entrepreneurs

Israel Kirzner's book Competition and Entrepreneurship contrasted his view of entrepreneurs who equilibrate markets with Schumpeter's entrepreneurs who generate economic progress through creative destruction, disequilibrating markets. This section considers in more detail the differences between Schumpeter's and Kirzner's depiction of entrepreneurial activity. Chapter 4 argued that at least part of the difference depends upon how equilibrium is defined, but even if this terminological...

Factors that disequilibrate the market

Kirzner's emphasis on the equilibrating function of entrepreneurship naturally focuses attention on factors that disequilibrate the market. The very notion of equilibrium suggests an economy that will continue on its present path undisturbed until it is shocked out of equilibrium. Then the equilibrating forces of the market take over to put the economy back on its equilibrium path. A number of factors could disequilibrate the market. For example, preferences could change, requiring resources to...