Israel M. Kirzner

One of the most important books on economic theory of the 1970s, perhaps the most important. Israel Kirzner (now a rabbi in his retirement, of all things) makes a very clear case against the economic orthodoxy that had shunted entrepreneurship to the side, pretending that mathematic equilibria expressed reality and that the future was somehow knowable. In the world of the neoclassical orthodoxy, entrepreneurs were unnecessary. But in our world, the real world, entrepreneurship is absolutely necessary, for our world is filled with uncertainty, distributed information and ignorance, and an ever-present moving DISequilibrium (I'm stating this latter too strongly for Kirzner!), and in this world "alertness to opportunities" is what makes for improvements, progress. And that's what entrepreneurs are, alert human actors, filling opportunities that (sometimes) only they see. Kirzner makes much of a fine distinction, between that of maximizers (in Robbins's famous explanation) and actual human beings who ACT to achieve positive rewards in a world where the best is not knowable, and even the existent knowable only in pieces.

The general equilibrium theory imagined by the mathematical economists is a fun construct, sure; but Kirzner showed, quite clearly, how irrelevant most of it was.

A deeply fascinating and clearly written work. It, along with the Hayek revival, changed economis forever. I hope!… (mer)