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Entrepreneurship, and the entrepreneurial market process: Israel M. Kirzner and the two levels of analysis in spontaneous order studies

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  • Peter Boettke

Abstract

The science of economics is born out of the puzzle that the coordination of economic activities presents to our imagination. The solution to that puzzle is the entrepreneurial market process. Israel Kirzner has argued that the market economy operates with ruthless efficiency to coordinate economic activities and realize the gains from social cooperation under the division of labor because of the institutional framework within which it operates, namely private property rights. Kirzner, however, is suspicious of economic analysis that doesn't limit its analysis to an examination of processes within that framework, but instead attempts to apply that analysis to the evolution of the framework itself. These are the two-levels of analysis in spontaneous order studies. This paper presents Kirzner's arguments for maintaining a strict dichotomy between the levels of analysis, and then challenges his argument with a discussion of the positive political economy of endogenous rule formation. Copyright Springer Science+Business Media New York 2014

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  • Peter Boettke, 2014. "Entrepreneurship, and the entrepreneurial market process: Israel M. Kirzner and the two levels of analysis in spontaneous order studies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(3), pages 233-247, September.
    • Handle: RePEc:kap:revaec:v:27:y:2014:i:3:p:233-247
    DOI: 10.1007/s11138-014-0252-1
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    Cited by:

    1. Ramoglou, Stratos, 2021. "Knowable opportunities in an unknowable future? On the epistemological paradoxes of entrepreneurship theory," Journal of Business Venturing, Elsevier, vol. 36(2).
    2. Coyne,Christopher J., 2020. "Defense, Peace, and War Economics," Cambridge Books, Cambridge University Press, number 9781108724036.
    3. Elert, Niklas & Henrekson, Magnus, 2021. "Innovative Entrepreneurship as a Collaborative Effort: An Institutional Framework," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 17(4), pages 330-435, June.
    4. Richard Epstein, 2017. "Hayek’s Constitution of Liberty—a guarded retrospective," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(4), pages 415-446, December.
    5. Nick Cowen, 2018. "Robust Against Whom?," Advances in Austrian Economics, in: Austrian Economics: The Next Generation, volume 23, pages 91-111, Emerald Group Publishing Limited.
    6. Steven E. Phelan, 2016. "Austrian theories of entrepreneurship: Insights from complexity theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(3), pages 277-297, September.
    7. Beniamino Callegari & Christophe Feder, 2022. "Entrepreneurship and the systemic consequences of epidemics: A literature review and emerging model," International Entrepreneurship and Management Journal, Springer, vol. 18(4), pages 1653-1684, December.
    8. Rosolino A. Candela, 2022. "The Division of Labor and Knowledge is Limited by the Division of Ownership Over the Ultimate Resource: The Role of Economies of Scope in Julian Simon," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(3), pages 323-341, September.
    9. David S. Lucas & Caleb S. Fuller & Ennio E. Piano & Christopher J. Coyne, 2018. "Visions of entrepreneurship policy," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 7(4), pages 336-356, November.
    10. Pál Czeglédi, 2017. "Productivity, institutions, and market beliefs: three entrepreneurial interpretations," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 6(2), pages 164-180, August.
    11. Malavika Nair & Nicolás Cachanosky, 2017. "Bitcoin and entrepreneurship: breaking the network effect," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(3), pages 263-275, September.
    12. Peter J. Boettke & Rosolino A. Candela, 2015. "Rivalry, Polycentricism, and Institutional Evolution," Advances in Austrian Economics, in: New Thinking in Austrian Political Economy, volume 19, pages 1-19, Emerald Group Publishing Limited.
    13. Alexander W. Salter & Abigail R. Hall, 2015. "Calculating Bandits: Quasi-Corporate Governance and Institutional Selection in Autocracies," Advances in Austrian Economics, in: New Thinking in Austrian Political Economy, volume 19, pages 193-213, Emerald Group Publishing Limited.
    14. Cachanosky Nicolás, 2017. "Austrian Economics, Market Process, and the EVA® Framework," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 12(s1), pages 1-9, July.

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    More about this item

    Keywords

    Market process; Entrepreneur; Spontaneous order; B31; B53;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian

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