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Kirznerian Economics: Some Policy Implications and Issues

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  • Sautet Frédéric

    (New Zealand Treasury)

Abstract

The aim of this paper is twofold: (a) to review briefly the main policy implications of Kirzner's work (and to show that Kirzner has always been careful to draw policy implications from his analysis) and (b) to contrast these with the approach that is generally used in public policy. The following issues are discussed in the paper: taxation and entrepreneurial incentives; the effects of regulation on the entrepreneurial process and economic growth; monopoly and monopoly pricing; anti-trust laws and their impact on the market process; the coordination criterion of efficiency; and the notion of economic justice. I argue that the standard criteria of efficiency are often not useful to policy-making and should be replaced by Kirzner's "coordination criterion", which states that the institutions of the market economy must be geared toward allowing the capture of profit (i.e. fostering entrepreneurial incentives) in order to promote the speed and responsiveness of the market process. One of the main lessons of Kirzner's work for policy making is that the market process is always competitive and takes place over time.Cet article a deux objectifs : a) passer brièvement en revue les principales implications politiques des contributions de Kirzner (et monter que Kirzner a toujours pris le soin de tirer les implications politiques de ses analyses) et b) distinguer ces implications kirzneriennes de l'approche généralement retenue dans l'élaboration des politiques publiques. Dans ce qui suit, nous discutons des questions suivantes : les impôts et les incitations entrepreneuriales ; les effets de la réglementation sur le processus entrepreneurial et la croissance économique ; les monopoles et leurs modes de fixation des prix ; les lois anti-monopole et leurs conséquences sur le processus marchand ; l'efficience en tant que critère de coordination ; et la notion de justice économique. Le papier soutient que le critère standard d'efficience est rarement utile au niveau politique et devrait être remplacé par le "critère de coordination" de Kirzner qui énonce que les institutions de marché doivent avoir comme point de repère la réalisation de profits (c'est-à-dire l'encouragement des incitations entrepreneuriales) de manière à promouvoir la vitesse de capacité d'ajustement du processus marchand. Une des principales leçons des contributions kirzneriennes pour les décisions politiques est que le processus marchand est toujours concurrentiel et s'inscrit dans le temps.

Suggested Citation

  • Sautet Frédéric, 2002. "Kirznerian Economics: Some Policy Implications and Issues," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(1), pages 1-23, March.
    • Handle: RePEc:bpj:jeehcn:v:12:y:2002:i:1:n:11
    DOI: 10.2202/1145-6396.1053
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    References listed on IDEAS

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    1. Paul L. Joskow, 2001. "California's Electricity Crisis," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 17(3), pages 365-388.
    2. James Buchanan, 1993. "How can constitutions be designed so that politicians who seek to serve “public interest” can survive and prosper?," Constitutional Political Economy, Springer, vol. 4(1), pages 1-6, December.
    3. Israel M. Kirzner, 1984. "Economic Planning and the knowledge Problem," Cato Journal, Cato Journal, Cato Institute, vol. 4(2), pages 407-425, Fall.
    4. Phlips, Louis, 1996. "On the detection of collusion and predation," European Economic Review, Elsevier, vol. 40(3-5), pages 495-510, April.
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    Cited by:

    1. Frederic Sautet, 2010. "The Competitive Market is a Process of Entrepreneurial Discovery," Chapters, in: Peter J. Boettke (ed.), Handbook on Contemporary Austrian Economics, chapter 7, Edward Elgar Publishing.

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