Competition & Entrepreneurship

This is the second book that I read about entrepreneurship. It’s also my second favorite book on economics.

Unlike Schumpeter, Kirzner does not assume that entrepreneurship is an unusual activity. Most people are entrepreneurial at some point. Successful entrepreneurship means being alert to profit opportunities that others have not noticed.

The underlying message is that there is such a thing as a free lunch. Kirzner views the market as a process rather than an equilibrium state. It is a superb book for understanding why mainstream neoclassical economics is unrealistic, but it does not address uncertainty. 

Kirzner characterizes entrepreneurship as the noticing of previously unnoticed profit opportunities.

Economists tend to depict firms and markets as in a state of equilibrium in which the quantity supplied equals the quantity demanded, but Kirzner notes that no real competition is taking place when firms are represented that way. The entrepreneurship that Kirzner describes produces the new and improved goods that drive economic progress.

The real value of this book is the way it questions how economists typically characterize competitive markets.