ISRAEL M. KIRZNER

Professor of Economics, New York University

Born:
February 13, 1930, London, England
Lived in Cape Town, South Africa, 1940-48
Education:
University of Cape Town, South Africa 1947-48
University of London (External Student) 1950-51
Brooklyn College, Brooklyn, New York 1952-54
New York University, 1954-57
Degrees:
B.A. summa cum laude, Brooklyn College, 1954
M.B.A. New York University, 1955
Ph.D. New York University, 1957

Publications:

  1. Books:
    The Economic Point of View (Van Nostrand, 1960) [Reprinted, Sheed and Ward, 1976]
    Market Theory and the Price System (Van Nostrand, 1963)
    An Essay on Capital (A.M. Kelley, 1966)
    Competition and Entrepreneurship (University of Chicago Press, 1973) [Spanish edition, 1975], [German edition, 1978], [Paperback (English) eidtion, 1978] [Japanese edition, 1985] [Portuguese edition, 1986]
    Perception, Opportunity and Profit Studies in the Theory of Entrepreneurship (University of Chicago Press, 1985)
    Discovery, Capitalism and Distributive Justice (Basil Blackwell, 2989)
    The Meaning of Market Process, Essays in the Development of Modern Austrian Economics (London: Routledge, 1992)
  2. Books edited:
    Method, Process, and Austrian Economics: Essays in Honor of Ludwig von Mises (Lexington Books, 1982)
    Subjectivism, Intelligibility and Economic Understanding: Essays in Honor of Ludwig M. Lachmann on his Eightieth Birthday (New York University Press, 1986) Classic in Austrian Economics: A Sampling in the History of a Tradition (London: William Pickering, 1994) 3 volumes, with (three) Introductions by the editor




PREFACE

On February 13, 1995 Israel M. Kirzner reached the age of sixty-five. This special issue of Advances in Austrian Economics honors him on that occasion. The articles in this volume either explicitly or implicitly expand themes that he has developed in the course of a very productive career.

     Kirzner's contribution to our understanding of the dynamics of capitalist processes is without question. For over three decades Kirzner has striven to refine and deepen our appreciation of the adjustment mechanisms that assure efficient operation of market economies. In particular, in works such as Competition and Entrepreneurship (1973), Perception, Opportunity and Profit (1979), Discovery and the Capitalist Process (1985), and The Meaning of Market Process (1992), Kirzner's treatment of the significance of entrepreneurial discovery for the complex plan coordination characterizing smoothly-operating economies has led many to reconsider the modern theoretical formulation of markets. Mainstream treatments have eliminated the entrepreneur from the model of competitive capitalism, and therefore have reduced the professional and public understanding of and respect for capitalist dynamics. The implications of Kirzner's work for economics are vast-even if they are not always heeded within the professional community.

     In Kirzner's work we find at least three scientific contributions that are vital to a frefined appreaciation of the market. They are:

  1. The entrepreneurial function within the market: The dynamic market adjustment processes articulated in Kirzner's books, particularly Competition and Entrepreneurship, provide the disequilibrium foundations of economic analysis. Whereas traditional models of competitive equilibrium are not capable of prviding an explanation of how the system would move to the equibibrium in th first place, Kirzner's entrepreneurial theory of the market process attempts to do precisely that. By focusing on the entrepreneur's correction of errors through arbitrage and speculation, Kirzner constructs a theory of how economies could move toward equilibrium. He shows how the often-condemned activities of arbitrage and speculation are actually beneficial to ordinary consumers.
  2. The institutional prerequisites for economic development: An important implication of Kirzner's work on entrepreneurship is his specification of the institutional prerequisites for unleashing the entrepreneurial spirit and generating a prosperous economic system. this is relevant at both a purely theoretical and a policy level of analysis. The specification of the institutional environment in which enterpreneurship can be encouraged is elucidated in Kirzner's work on development economics, and (via the method of contrasts) in his examination of bureaucracy and regulation.
  3. The examination of distributive justice: One of Kirzner's most important books, though perhaps his least understood, is his Discovery, Capitalism, and Distributive Justice (1989). Rather than argue on the grounds of strictly moral theory-something which he does not wish to do-Kirzner offers an economic critique of theories of distributive justice. He argues that standard ethical assessments of capitalism have failed not because of flaws in the ethical arguments themseleves, but because they misperceive the nature of market processes, that is, they misperceive the dicovery role of entrepreneurs. When entrepreneurs discover, for example, a use of resources, they bring these resources into a new (economic) existence. Accordingly, they have created something ex nihilo and therefore are entitled to the associated profit on generally-accepted moral principles.

     In addition to these contributions (which do not include his seminal forays into the history of economics in general and of the Austrian School in particular, as well as research in capital theory), Kirzner has been an exemplar of scholarly reasonableness and scientific civility for at least two generations of economists. Seriousness of purpose, deep commitment, and the courage of his convictions, are defining traits of Kirzner's career. Both as a teacher and colleague, he has guided scholars who have embarked upon careers within the economics profession and the broader intellectual community. As the contemporary leader of the Austrian School of Economics, Kirzner has worked tirelessly to revitalize a scientific tradition that embodies a deep appreciation for market processes and the political, legal, and social framework within which these processes are embedded. Moreover, the collapse of communist regimes in East and Central Europe, and the difficulties associated with transition and development policy, reveal that neoclassical economic theory is ill equiped to provide an understanding of both dynamic processes and the institutional infrastructure reuqired to unleash the entrepreneurial spirit. As the limits of mainstream theory are more widely recognized and admitted, Kirzner's fundamental contributions to economic science will surely grow in influence.

Peter J. Boettke
Mario J. Rizzo

Editors




PUBLICATIONS OF ISRAEL M. KIRZNER


Compiled by Peter J. Boettke

BOOKS

The Economic Point of View (Princeton, NJ: Van Nostrand, 1960) [Reprinted, Kansas City: Sheed and Ward, 1976].

Market Theory and the Price System (Princeton, NJ: Van Nostrand, 1963).

An Essay On Capital (New York: A.M. Kelley, 1966).

Competition and Entrepreneurship (Chicago: University of Chicago Press, 1973) [Spanish edition, 1975], [German edition, 1978], [Paperback (English) edition, 1978] [Japanese edition, 1985] [Portuguese edition, 1986].

Perception, Opportunity and Profit: Studies in the Theory of Entrepreneurship (Chicago: University of Chicago Press, 1979) [German edition, 1988].

Discovery and the Capitalist Process (Chicago: University of Chicago Press, 1985).

Discovery, Capitalism and Distributive Justice (Oxford:Basil Blackwell, 1989).

The Meaning of Market Process, Essays in the Development of Modern Austrian Economics (London: Routledge, 1992).

Method, Process, and Austrian Economics: Essays in Honor of Ludwig von Mises (Lexington, MA: Lexington Books, 1982).

Subjectivism, Intelligibility and Economic Understanding: Essays in Honor of Ludwig M. Lachmann on his Eightieth Birthday (New York: New York University Press, 1986).

Classics in Austrian Economics: A Sampling of a Tradition, 3 volumes (London: William Pickering and Chatto, 1994).




ARTICLES AND CHAPTERS IN BOOKS

"Rational Action and Economic Theory," Journal of Political Economy, 70 (August, 1962).

"Rejoinder," Journal of Political Economy, 71 (February, 1963).

"The Premises of Growth Eocnomics," New Individualist Review, (Summer 1963).

"What Economists Do," Suntern Economics Journal, 31 (February, 1965).

"Divergent Approaches in Libertarian Economic Thought," Intercollegiate Review, (January- February, 1967).

"Methodological Individualism, Market Equilibrium and Market Process," Il Politico, 32 (1967).

"On Man-made Tightropes," National Review (February 27, 1968).

"The 'Power' Problem on Campus," Intercollegiate Review (Spring 1970).

"Entrepreneurship and the Market Approach to Development," in Toward Liberty: Essays in Honor of Ludwig von Mises (Menlo Park: Institute for Humane Studies, 1971).

"Advertising," The Freeman (September 1972).

"Altruism, Social Responsibility, and the Market Economy," The Hillsdale Report, Vol. 11, no. 4 (1972).

"Tribute to Von Mises: On the Market," National Review (November 9, 1973).

"Advertising," in T. Machan (ed.) The Libertarian Alternative: Essays in Social and Political Philosophy, (Chicago: Nelson-Hall, 1974).

"The Ugly Market: Why Capitalism is Hated, Feared and Despised," in The Freeman (December 1974); reprinted in m. Hendrickson, ed., The Morality of Captialism (Irvington-on Hudson: Foundation for Economic Education, 1992).

"Capital, Competition, and Capitalism," in Champions of Freedom, Ludwig von Mises Lecture Series (Hillsdale College Press, 1974).

"Producer, Entrepreneur, and the Right to Property" in S.L. Blumenfeld, ed., Property in a Humane Economy (La Salle, Illinois: Open Court, 1975).

"Ludwig von Mises and the Theory of Capital and Interest," in L.S. Moss, ed., The Economics of Ludwig von Mises: Toward a Critical Reappraisal (Kansas City: Sheed and Ward, 1976).

"On the Method of Austrian Economics" in E.G. Dolan, ed., The Foundations of Modern Austrian Economics (Kansas City: Sheed and Ward, 1976).

"Philosophical and Ethical Implications of Austrian Economics," in Dolan op. cit.

"Equilibrium versus Market Process," Dolna, op. cit.

"The Theory of Capital," in Dolan, op. cit.

"Discussion" in The Economic System in an Age of Discontinuity: Long Range Planning or Market Reliance? (New York: New York Unviersity Press, 1976).

"The 1975 Nobel Memorial Prize in Economics: Some Uncomfortable Reflections," in The Freeman (April 1976).

"Foreword" to new edition of L. Mises, The Ultimate Foundation of Economic Science, An Essay on Method (Kansas City: Sheed, Andrews and McMeel, 1978).

"Economics and Error, in L. Spadaro, ed., New Directions in Austrian Economics (Kansas City: Sheed, Andrews, and McMeel, 1978).

"The Entrepreneurial Role in Menger's System," in Atlantic Economic Journal (September 1978).

"Entrepreneurship, Entitlement, and Economic Justice," in Eastern Economic Journal, Vol. 4, No. 1 (1978); also reprinted in J. Paul, ed., Reading Nozick: Essays on Anarchy, State, and Utopia (Totowa, NJ: Rowman and Littlefield, 1981).

"The Perils of Regulation: A Market Process Approach" Occasional Paper of the Law and Economics Center, University of Miami School of Law, February, 1979.

"Entrepreneurship, Choice and Freedom," in ORDO Jahrbuch fur die Ordnung von Wirstchaft und Gesellschaft, Band 30 [Festgabe fur F.A. von Hayek] (May 1979).

"X-Inefficiency, Error and the Scope for Entrepreneurship," in M. Rizzo, ed., Time, Uncertainty and Disequilibrium: Exploration of Austrian Themes, (Lexington, MA: Lexington Books, 1979).

"The Primacy of Entrepreneurial Discovery," in Institute of Economic Affairs, [Readings 23] Prime Mover of Progress: The Entrepreneur in Capitalism and Socialism (London: I.E.A., 1980).

"The Morality of Capitalist Success," Culver-Stockton College, Canton, MO, 1980.

"Policy Implications of Austrian Economics," in Journal of Economic Affairs, [London, England], Vol. 1, No. 3 (1981).

"Mises and the Renaissance of Austrian Economics," in Homage to Mises: The First Hundred Years (Hillsdale, MI: Hillsdale College Press, 1981).

"Mises on Entrepreneurship," in Wirtschaftspolitische Blatter, No. 4 (1981).

"The 'Austrian' Perspective," in Bell and Kristol, eds., The Crisis in Economic Theory (New York: Basic Books, 1981).

"The Theory of Entrepreneurship in Economic Growth," in Encyclopedia of Entrepreneurship, C.A. Kent, D.L. Sexton, K.H. Vesper, eds. (Englewood Cliffs, NJ: Prentice-Hall, 1982).

"Uncertainty, Discovery and Human Action: A Study of the Entrepreneurial Profile in the Misesian System," in Israel M. Kirzner, ed., Method, Process and Austrian Economics: Essays in Honor of Ludwig von Mises (Lexington, MA: Lexington books, 1982).

"Competition, Regulation, and the Market Process: An 'Austrian' Perspective," CATO Institute Policy Analysis, No. 18 (September 30, 1982).

"Entrepreneurship and the Future of Capitalism," in J. Backman, ed., Entrepreneurship and the Outlook for America (New York: Free Press, 1983).

"Entrepreneur and the Entrepreneurial Function: A Commentary," in J. Ronen, ed., Entrepreneurship: Where Did It Come From, and Where Is It Going? (Lexington, MA: Lexington Books, 1983).

"Die zentrale Bedeutung unternehmerischen Entdeckens," in Zeitschrift fur Wirstschaftspolitik (32 Jahrgang, Heft 3, 19830 [translation of "The Primacy of Entrepreneurial Discovery"].

"Incentives for Discovery," Economic Affairs (January 1984).

"Economic Planing and the Knowledge Problem," in CATO Journal, 4 (Fall 1984).

"Prices, the Communcation of Knowledge, and the Discovery Process," in Kurt R. Leube and Albert H. Zlabinger, eds., The Political Economy Freedom: Essays in Honer of F.A. Hayek (Munich-Vienna: Philosophia Verlag, 1984).

"The Entrepreneurial Process," in Calvin A. Kent, ed., The Environment for Entrepreneurship (Lexington, MA: Lexington Books, 1984).

"Rejoinder," in Economic Affairs (January-March, 1985).

"The Role of the Entrepreneur in the Economic System," Centre for Independent Studies, Syndney, Australia, Occassional Paper #10 (1985).

"Must Capitalism Yeild to Socialism?" in Economic Affairs (April-June, 1985).

"Comment on R.N. Lnaglois, 'From the Knowledge of Economis to the Economics of Knowledge: Fritz Machlup on Methodology and on the "Knowledge Society," in Warren Samuels, ed., Research in the History of Economic Thought and Methodology, 3 (1985).

"Liberalism and Limited Government," in The Freeman (November 1985).

"Another Look at the Subjectivism of Costs," in Israel M. Kirzner, ed., Subjectivism, Intelligibility and Economic Understanding (New York: New York University Press, 1986).

"The Open-Endedness of Knowledge: Its Role in the F.E.E. Formula," in The Freeman (March, 1986).

"Ludwig von Mises and Freidrich von Hayek: The Modern Extension of Austrian Subjectivism," in Norbert Leser, ed., Die Wiener Schule der Nationalkonomie (Vienna and Cologne and Graz: Herman Bohlaus, 1986).

"Roundaboutness, Opportunity and Austrian Economics," in Martin J. Anderson, ed., The Unfinished Agenda (London: Institute of economic Affairs, 1986).

"Individualistic Capitalism," in Donna C. Charron , ed., Views on Individualism (St. Louis: St. Louis Humanities Forum, 1986).

"Entrepreneurship and American Competitiveness" in S.M. Butler and W.J. Dennis, eds., Entrepreneurship: The Key to Economic Growth (Heritage Foundation and National Federation of Independent Busines, 1986).

"Taxes and Discovery: An Entrepreneurial Perspective," in Dwight R. Lee, ed., Taxation and the Deficit Economy; Fiscal Policy and Capital Formation in the U.S. (San Francisco: Pacific Research Institute, 1986).

"Unternehmer: Finder von Beruf" in Wrtschaftswoche [the West German counterpartto Business Week] (January 9, 1987), [translated from English version written expressly for the occasion].

"The Economics of Errant Entrepreneurs" in The Freeman (August 1987).

"Spontaneous Order and the Case for the Free Market," in Ideas on Liberty:Essays in Honor of Paul L. Poirot (Irvington-on-Hudson: Foundation for Economic Education, 1987).

The following three articles in The New Palgrave Dictionary of Economic (New York: Macmillan, 1987):

  1. "The Austrian School of Economics"
  2. "Friedrich Hayek" (co-authored article with Roger Garrison)
  3. "Economic Harmony"

"The Economic Calculation Debate: Lessons for Austrians," in Review of Austrian Economics, 2 (1988).

"Advertising in An Open-Ended Universe," Foreward to Robert B. Ekelund, Jr. and Daniel S. Saurman, Advertising and the Market Process (San Francisco: Pacific Research Institute, 1988).

"Welfare Economics: A Modern Austrian Perspective," in W. Block and L.H. Rockwell, eds., Man, Economy and Liberty, Essays in Honor of Rothbard (Auburn: Ludwig von Mises Institute, 1988).

"The Use of Labels in Doctrinal History: Comment on Baird," in Cato Journal, 9 (Spring/Summer 1989).

"Menger, Classical Liberalism, and the Austrian School of Economics," in Bruce Caldwell, ed., Carl Menger and his legacy in Economics, (Durham and London: Duke University Press, 1990).

"The Meaning of Market Process," in A. Bosch, P. Koslowski, and R. Veit, eds., General Equilibrium or Market Process: Neoclassical and Austrian Theories of Economics, (Tubingen: J.C.B. Mohr, 1990).

"The Market Process: An Austrian View" in K. Groenveld, J.A.M. Maks, and J. Muysken, eds., Economic Policy and the Market Process, Austrian and Mainstream Economics (Amsterdam: North Holland, 1990).

"Carl Menger und die subjektivistische Tradition in der Okonomie" (translated from original English text contributed expressly for this volume) in Horst Claus Recktenwald, eds. Carl Mengers wegweisendes Werk (Dusseldorf: Verlag Wirtschaft und Finanzen GMBM, 1990).

"Commentary" on S. Boehm "The Austrian Tradition: Schumpeter and Mises," in K. Hennings and W.J. Samuels, eds., Neoclassical Economic Theory, 19870-1930 (Boston, Dordrecht, London: Kluwer, 1990).

"Self-Interest and the New Bashing of Economics" in Critical Review, 4 (Winter-Spring 1990).

"Knowledge Problems and Their Solutions: Some Relevant Distinctions," in Cultural Dynamics, 3 (1990).

"Discovery, Private Property, and the Theory of Justice in Capitalist Society," in Journal des Economistes et des Etudes Humaines, 1 (October 19900.

"The Driving Force of the Market," in R. Ebeling, ed., Austrian Economics: Perspectives on the Past and Prospects for the Future (Hillsdale, MI: Hillsdale College Press, 1991).

"F.A. Hayek, 1899-1992," in Critical Review, 5 (1991).

"Human Action, Freedom, and Economic Science," in J.W. Robbins and M. Spangler, eds., A Man of Principle: Essays in Honor of Hans F. Sennholz (Grove City, PA: Grove City College Press, 1992).

"Subjectivism, Freedom, and Economic Law, Ludwig Lachmann Memorial Lecture," in South African Journal of Economics, 60 (March 1992).

"The Morality of Pure Profit: The Logic and Illogic of a Popular Phobia," in Journal des Economistes et des Etudes Humaines, 4 (June-September 1993).

"The Pure Time Preference Theory of Interest: An Attempt at Clarification," in J.M. Herbener, ed., The Meaning of Ludwig von Mises: Contributions in Economics, Sociology, Epistemology, and Political Philosophy (Boston: Kluwer Academic Publishers, 1993).

"The Limits of the Market: The Real and the Imagined," in W. Moschel, M. Streit and U. Witt, eds., Marktwirtschaft und Rechtsordnung: Festschrift zum 70, Geburtstag von Prof. Dr. Erich Hoppmann (Baden-Baden: Nomos Verlagsgesellschaft, 1994).

The following in The Elgar Companion to Austrian Economics, P.J. Boettke, ed. (Aldershot, UK: Edward Elgar Publishing, 1994):

  1. "Value Freedom"
  2. "Entrepreneurship"

"A Tale of Two Worlds: Comment on Shmanske," in Advances in Austrian Economics, Vol. 1 (1994).

"The Entrepreneur in Economic Theory," in The Dynamics of Entrepreneurship: Crafoord Lectures No. 5 (Malmo, Sweden: Lund University Press, 1994).

"The Ethics of Competition," in H. Siebert, ed., The Ethical Foundations of the Market Economy (Tubingen: J.C.B. Mohr, 1994).

"The Nature of Profits: Some Economic Insights and Their Ethical Implications," in R. Cowan and M.J. Rizzo, eds., Profits and Morality (University of Chicago Press, 1995).

"Hayek's Theory of the Coordination of Markets: A Commentary to Accompany the Facsimile Edition" in Preise und Produktion (Dusseldorf: Verlag Wirtschaft und Finanzen, 1995).

"The Subjectivism of Austrian Economics," in G. Meijer, ed., New Perspectives on Austrian Economics (London: Routledge, 1995).




BOOK REVIEWS

H.W. Briefs, Three Views of Method in Economics, in Journal of Political Economy (December 1963).

R.L. Smyth, ed., Essays in Economic Methods, in Journal of Political Economy (February 1964).

G.L.S. Shackle, The Nature of Economic Thought, in Journal of Business (April 1967).

D. Dewey, Imperfect Competition, A Radical Interpretation, in Journal of Business (October 1970).

H. Manne, ed., Economic Policy and the Regulation of Corporate Securities, in Journal of Business (October 1971).

Y. Brozen, ed., Advertising and Society in Reason, (November 1975).

J.R. Hicks, Capital and Time, A Neo-Austrian Theory; and J.R. Hicks and W. Weber (ed.), Carl Menger and the Austrian School of Economics, in Libertarian Review, (November 1975).

J.W. Markham, Comglomerate Enterprise and Public Policy; and J.F. Winslow, Conglomerate Unlimited: The Failure of Regulation, in American Political Science Review (March 1977).

J.K. Galbraith, The Age of Uncertainty, in Libertarian Review (September 1977).

L. Mises, On the Manipulation of Money and Credit, in Reason Magazine (April 1979).

F.A. Fetter, Capital, Interest and Rent: Essays in the Theory of Distribution (edited, with an introduction by M.N. Rothbard), in Austrian Economics Newsletter (Spring, 1980).

B.M. Friedman, ed., New Challenges to the Role of Profit, in Public Choice Vol. 35/3.

H. Lepage, Tomorrow, Capitalism: The Economics of Economic Freedom, in Inquiry (April 1983).

G.J. Stigler, The Economist as Preacher and Other Essays, in Inquiry, (April 1983).

D.H. Hausman, Capital, Profits and Prices: An Essay in the Philosophy of Economics, in International Philosophical Quarterly (June 1983).

R. Hebert and A. Link, The Entrepreneur, in Southern Economic Journal (October 1983).

H. Frisch, ed., Schumpeterian Economics, in Journal of Economic Literature (December 1983).

M. Blaug, The Methodology of Economics, or How Economists Explain, in Austrian Economics Newsletter (Spring 1984).

G. Gilder, The Spirit of Enterprise in Reason (April 1985).

G. O'Driscoll and M. Rizzo, The Economics of Time and Ignorance in Market Process (Fall 1985); reprinted in P.J. Boettke and D.L. Prychitko, eds., The Market Process: Essays in Contemporary Austrian Economics (Aldershot, UK: Edward Elgar Publishing, 1994).

A.O. Hirschman, Rival Views of Market Society and other Recent Essays, in Reason (August- September 1987).

T. Alexander Smith, Time and Public Policy, in The Freeman (August 1989).

M. Currie and I. Steedman, Wrestling with Time: Problems in Economic Theory, in Southern Economic Journal (January 1991).

M. Skousen, The Structure of Production, in Journal of Economic Literature (December, 1991).

R.E. Cordato, Welfare Economics and Externalities in an Open-Ended Universe: A Modern Austrian Perspective, in CATO Journal, 13 (Spring/Summer 1993).

Mises: An Annotated Bibliography: A Comprehensive Listing of Books and Articles by and About Ludwig von Mises, compiled by B. Bien Greaves and R.W. McGee, in The Freeman (November 1993).

S. Ioannides, The Market, Competition and Democracy: A Critique of Neo-Austrian Economics, in The Freeman (January 1994).

B. Berger, ed., The Culture of Entrepreneurship, in Advances in Austrian Economics, Vol. 1 (1994).

D. Ramsay Steele, From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation, in Economic Affairs (April 1994).

J. Biner and R. Van Zijp, eds., Hayek, Coordination and Evolution: His Legacy in Philosophy, Politics, Economics and the History of Ideas in Southern Economic Journal (forthcoming).