Corridors, Coordination and the Entrepreneurial Theory of the Market Process
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.
|Date of creation:||2010|
|Date of revision:|
|Publication status:||Published in The Journal of Private Enterprise 2.25(2010): pp. 87-96|
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Web page: http://mpra.ub.uni-muenchen.de
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- Peter J. Boettke & David L. Prychitko (ed.), 1998. "market process theories," Books, Edward Elgar, volume 0, number 1214, 6.
- 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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- Klein, Daniel B. & Orsborn, Aaron, 2008.
"Concatenate Coordination and Mutual Coordination,"
Ratio Working Papers
116, The Ratio Institute.
- Klein, Daniel B. & Briggeman, Jason, 2008.
"Israel Kirzner on Coordination and Discovery,"
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127, The Ratio Institute.
- 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(03), pages 912-913, September.
- 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.
- 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, 03.
- Klein, Daniel, 2009. "Unfolding the Allegory behind Market Communication and Social Error and Correction," Ratio Working Papers 133, The Ratio Institute, revised 05 May 2009.
- 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.
- Smith, Adam, 1759. "The Theory of Moral Sentiments," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1759.
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