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Corridors, Coordination, and the Entrepreneurial Theory of the Market Process

Author

Listed:
  • Peter J. Boettke

    (George Mason University)

  • Daniel J. D'Amico

    (Loyola University New Orleans)

Abstract

Daniel Klein (Klein 1997, Klein and Orsborn 2009 and Klein and Briggeman forthcoming) and Israel Kirzner (forthcoming) have been engaged in a debate concerning how economists should understand and use the terms “coordination” and “economic goodness”. Klein and Briggeman (forthcoming) contend that Kirzner suffers from excessive ambition scientifically. The authors claim Kirzner’s reliance and identification with “the Misesian image of science” threatens to discredit his more sensible contributions (e.g., market processes are driven towards progress by competitive entrepreneurial discovery). We offer a response to Klein and Briggeman’s claim that loose, vague and indeterminate forms of economic reasoning make for a more robust political economy. In doing so, we also explain the theoretical context surrounding Kirzner’s theory of the entrepreneurial market process. While we agree with Klein and Briggeman’s critique of scientism and formalism, we emphasize the nature of the debates over market theory and the price system that Kirzner was engaging in order to understand the reasons behind his methods and the theoretical insights they provide. Rather than the source of his failure, we view Kirzner’s “excessive ambitions” to provide a scientific foundation of the market process as the source of his great success as an economic theorist.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Peter J. Boettke & Daniel J. D'Amico, 2010. "Corridors, Coordination, and the Entrepreneurial Theory of the Market Process," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 25(Spring 20), pages 87-96.
    • Handle: RePEc:jpe:journl:309
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    References listed on IDEAS

    as
    1. Daniel B. Klein & Jason Briggeman, 2010. "Israel Kirzner on Coordination and Discovery," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 25(Spring 20), pages 1-53.
    2. Peter J. Boettke & David L. Prychitko (ed.), 1998. "market process theories," Books, Edward Elgar Publishing, volume 0, number 1214.
    3. Peter J. Boettke (ed.), 1994. "The Elgar Companion to Austrian Economics," Books, Edward Elgar Publishing, number 53.
    4. Klein, Daniel & Orsborn, Aaron, 2009. "Concatenate coordination and mutual coordination," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 176-187, October.
    5. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    6. Smith, Adam, 2008. "An Inquiry into the Nature and Causes of the Wealth of Nations: A Selected Edition," OUP Catalogue, Oxford University Press, number 9780199535927 edited by Sutherland, Kathryn.
    7. Smith, Adam, 1759. "The Theory of Moral Sentiments," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1759.
    8. Daniel Klein, 2001. "Plea to Economists Who Favor Liberty: Assist the Everyman," Eastern Economic Journal, Eastern Economic Association, vol. 27(2), pages 185-202, Spring.
    9. Hayek, F. A., 1996. "Individualism and Economic Order," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226320939, September.
    10. Daniel B. Klein & Brandon Lucas, 2011. "In A Word Or Two, Placed In The Middle: The Invisible Hand In Smith'S Tomes," Economic Affairs, Wiley Blackwell, vol. 31(1), pages 43-52, March.
    11. von Hayek, Friedrich August, 1989. "The Pretence of Knowledge," American Economic Review, American Economic Association, vol. 79(6), pages 3-7, December.
    12. Scherer, F. M., 2002. "The Free-Market Innovation Machine: Analyzing the Growth Miracle of Capitalism. By William J. Baumol. Princeton, NJ: Princeton University Press, 2002. Pp. xiv, 318. $35.00," The Journal of Economic History, Cambridge University Press, vol. 62(3), pages 912-913, September.
    13. Klein, Daniel, 2009. "Unfolding the Allegory behind Market Communication and Social Error and Correction," Ratio Working Papers 133, The Ratio Institute, revised 17 Feb 2010.
    14. Daniel B. Klein, 2009. "In Adam Smith's Invisible Hands: Comment on Gavin Kennedy," Econ Journal Watch, Econ Journal Watch, vol. 6(2), pages 264-279, May.
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    Cited by:

    1. Martin, Adam, 2012. "Discovering rhetoric: The ecology of enterprise in the Bourgeois Era," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 757-762.

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    More about this item

    Keywords

    Economic coordination; Market economy; Ludwig von Mises; Liberalism; Friedrich Hayek; Israel Kirzner; Concatenation; Discovery; Austrian economics; Methodology;
    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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