Kirzner reframed entrepreneurship from heroic innovation to mere market alertness

Evidence

While Kirzner attacked the eminent economist Schumpeter, he was also eager to stress how close Schumpeter’s emphasis on “dynamic disequilibrium” and innovation were to his own concept of “alertness” and to the independence of entrepreneurship from the factors of production. According to Schumpeter, only the owners of capital were bearing risk, which set his reasoning apart from the contributions on uncertainty of Frank Knight at the University of Chicago, for example. Yet unlike Schumpeter, Kirzner emphasized the market process in which the entrepreneur takes a role, rather than the innovative contribution of the entrepreneur himself. He did so for a reason: Schumpeter’s wartime observations regarding the decline of heroic, innovative entrepreneurship and, correspondingly, family firms, led him to expect the rise of a version of elite socialism that was difficult to counter in the age of monopoly capital, large organizations, and managerialism. The central weakness of Schumpeter’s sociology of entrepreneurship, however, was a tendency to naturalize entrepreneurial talent and quality (the substantive capacity of the class of innovative individuals and the macroeconomic relevance of innovations, respectively). This was no longer needed if the entrepreneur merely reacts to market opportunities rather than having to create them. Kirzner’s shift of attention to the simple individual quality of “alertness” and the primacy of market processes which present opportunities redirected the argument to the general system of thought of Ludwig von Mises. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 279

Categorization

• XREF: Ties into Schumpeter’s creative destruction and the Austrian economics tradition; connects to prior notes on Kirzner’s alertness over Boldizzoni’s heroic-entrepreneur critique. — connects to: Kirzner redefined entrepreneurship as equilibrating action, not Schumpeterian disruption — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 277; Kirzner saw the real entrepreneurial function as seizing market opportunities, not calculation — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 277
• DEFINE: Clarifies the technical distinction between Kirznerian ‘alertness’ entrepreneurship and Schumpeterian innovation-driven entrepreneurship.