Competition and Entrepreneurship (Paperback)

~ (Author) "THIS BOOK IS AN ATTEMPT TOWARD A THEORY OF THE MARKET and of the price system that differs in significant respects from the orthodox theory..." (more)
Key Phrases: contemporary price theory, naive profit theory, monopolist resource owner, New York, American Economic Review, Journal of Political Economy (more...)

Editorial Reviews

Product Description

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.

Product Details

• Paperback: 256 pages
• Publisher: University Of Chicago Press (September 15, 1978)
• Language: English
• ISBN-10: 0226437760
• ISBN-13: 978-0226437767
• Product Dimensions: 7.9 x 5.2 x 0.7 inches
• Shipping Weight: 10.4 ounces (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (4 customer reviews)
• Amazon.com Sales Rank: #152,748 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

4.0 out of 5 stars right ideas at the wrong time, August 10, 2007

By	D. W. MacKenzie (New London CT) - See all my reviews (REAL NAME)

Competition and Entrepreneurship is a book with many interesting insights. Kirzner attacks the use of equilibrium models in mainstream economics, and rightly so. Mainstream economists places great emphasis on equilibrium, but have little to say about how equilibrium is attained. Undergraduates are told a simple story about excess supply and excess demand. The story at the graduate level and in professional journals is even worse. At this level, economists often ignore the issue of equilibration altogether.

Kirzner challenged the conventional view by focusing on the process by which entrepreneurs move market prices towards equilibrium. "The market process is set into motion by the ignorance of the market participants". "Gradually, competition between the entrepreneurs as buyers, and again as sellers, will succeed in communicating to market participants correct estimates of other market participants' eagerness to buy and sell". Of course, Kirzner is building upon the work of Mises and Hayek, whereby competing market participants learn to adjust their plans mutually as prices change. But Kirzner does add greater detail about the specifics of entrepreneurship.

Unfortunately, this book was published at a time when the economics profession was unwilling to listen to such arguments. In 1973 professional thought was so clouded by ideology that there was really no chance for Kirzner to gain the recognition he deserved. The mindset of the profession is less ideological now, but the professions obsession with math has reached new heights. Very few graduate students learn this sort of economics these days.

On the bright side, economists have moved in Kirzner's direction by taking greater interest in informational and coordination issues. Most of this is done with game-theoretic models, rather than with the verbal logic that Kirzner uses. For anyone interested in learning Austrian economics, Competition and Entrepreneurship is a good place to start. It is a relatively easy read, both clear and concise, and it reveals much about the workings of markets.

6 of 10 people found the following review helpful:

5.0 out of 5 stars An incisive look into the competitive markets., June 6, 2001

By	Supriyo B. Chatterjee ""SB" Chatterjee" (West Hartford, CT USA) - See all my reviews (REAL NAME)

A thorough economics ('Austrian') perspective on how a free market performs - with competition and the role of the entrepreneur in it. For the non-economics reader, I would recommend Peter Drucker's Innovation and Entrepreneurship.

7 of 13 people found the following review helpful:

4.0 out of 5 stars A brilliant dynamic theory of the firm., November 17, 1998

By A Customer

Kirzner offers an alternative to both the neoclassical theory of the firm and to the Schumpeterian "creative destruction" perspective of the theory of the firm. Although Kirzner belongs to the school of Austrian economics, he is independent to the Schumpeterian perspective.