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"ISRAEL M. KIRZNER AND THE ENTREPRENEURIAL MARKET PROCESS" A DISCUSSION HELD IN MARCH, 2017. Online: <http://oll.libertyfund.org/pages/lm-kirzner> Ebooks: <http://oll.libertyfund.org/titles/2730>. Israel M. Kirzner Summary In this Liberty Matters online discussion Peter Boettke of George Mason University examines Israel Kirzner’s insights into the rivalrous nature of competitive behavior and the market process, his analysis of market theory and the operation of the price system, the institutional environment that enables a market economy to realize mutual gains from trade and to continuously discover gains from innovation, and to produce a system characterized by economic growth and wealth creation. Boettke concludes by arguing that Kirzner has done more than nearly any other living modern economist to improve our understanding of competitive behavior and the operation of the price system in a market economy. Boettke is joined in the discussion by Peter G. Klein, professor of entrepreneurship at Baylor University’s Hankamer School of Business, Mario Rizzo, professor of economics at New York University, and Frédéric Sautet, associate professor at The Catholic University of America. Boettke and Sautet are the editors of Liberty Fund’s 10 volume The Collected Works of Israel M. Kirzner. 1 of 24 About Liberty Matters and the Online Library of Liberty can be found at <http://oll.libertyfund.org/titles/2516>. “Liberty Matters” is a project of Liberty Fund, Inc. which is part of the Online Library of Liberty website. Every two months we ask a leading Copyright & Fair Use Statement scholar to present an argument on a particular topic “pertaining to liberty” in a “Lead Essay” and to develop this argument at some length. The “Lead "Liberty Matters" is the copyright of Liberty Fund, Inc. This material is Essay” is posted in the first week of the month. Three or four other put online to further the educational goals of Liberty Fund, Inc. These scholars will respond to this essay in slightly shorter “Response Essays” essays and responses may be quoted and otherwise used under "fair use" during the second week of the month. provisions for educational and academic purposes. To reprint these essays Once all these ideas and arguments are on the table an open discussion in course booklets requires the prior permission of Liberty Fund, Inc. between the various parties takes place over the course of the following Please contact the OLL Editor if you have any questions. weeks. At the end of the month the online discussion is closed. About the Online Library of Liberty and Liberty Fund We plan to have discussions about some of the most important online resources which can be found of the Online Library of Liberty website. The Online Library of Liberty is a project of Liberty Fund, Inc., a We will link to these resources wherever possible from the essays and private educational foundation established in 1960 to encourage the study responses of our discussants so our reader can find out more about the of the ideal of a society of free and responsible individuals. The OLL topic under discussion. website has a large collection of books and study guides about individual liberty, limited constitutional government, the free market, and peace. The complete collection of Liberty Matters can be found here <http://oll.libertyfund.org/pages/liberty-matters>. Liberty Fund: <www.libertyfund.org>. OLL: <oll.libertyfund.org>. EBook versions of these discussions in PDF, ePub, and Kindle formats 2 of 24 The Debate to Peter Boettke" [Posted: March 15, 2017] Lead Essay: Peter J. Boettke, "Israel M. Kirzner on Competitive 4. Peter G. Klein, "What Did Kirzner Accomplish? Reply to Pete Behavior, Industrial Structure, and the Entrepreneurial Market Process" Boettke" [Posted: March 20, 2017] [Posted: March 1, 2017] 5. Peter J. Boettke, "A Methodology for Purposes and Processes" [Posted: March 20, 2017] Responses and Critiques 6. Peter J. Boettke, "Price Theory and the Competitive Market Process" [Posted: March 21, 2017] 1. Mario J. Rizzo, "Kirzner’s Theory of the Market Process" 7. Mario J. Rizzo, "Pete is Right and Wrong and Right and Maybe [Posted: March 6, 2017] Wrong" [Posted: March 23, 2017] 2. Peter G. Klein, "Entrepreneurial Discovery: Who Needs It?" 8. Peter G. Klein, "Still Not Convinced" [Posted: March 27, 2017] [Posted: March 8, 2017] 9. Frederic Sautet, "Is a Market Process Theory Purely Based on 3. Frederic Sautet, "Purposeful Human Action and the Logic of Choice Really Impossible?" [Posted: March 29, 2017] Entrepreneurship: Kirzner’s Misesian Contribution" [Posted: March 10. Mario Rizzo, "Local versus Broader Equilibrium" [Posted: 9, 2017] March 30, 2017] 11. Frederic Sautet, "Can a Theory of the Market Process Deal with The Conversation Outliers? Or Why We Should Understand Equilibrium Tendencies as a Constantly High Degree of Social Coordination" [Posted: 1. Peter J. Boettke "Situating Kirzner" [Posted: March 13, 2017] February 1, 2017] 2. Peter J. Boettke, "The Centrality of Human Purposiveness" 12. Peter G. Klein, "Closing Thoughts" [Posted: February 1, 2017] [Posted: March 13, 2017] 13. Peter J. Boettke, "Coordination Is the Problem, 3. Mario J. Rizzo, "On Frameworks, Theories, and Models: Reply Entrepreneurship the Solution" [Posted: February 1, 2017] About the Authors Mario Rizzo is the co-director of the Classical Liberal Institute at the Peter J. Boettke is a University Professor of Economics and New York University School of Law as well as a professor of economics Philosophy at George Mason University and director of the F.A. Hayek at New York University. He is also the director of the Program on the Program for Advanced Study in Philosophy, Politics, and Economics at Foundations of the Market Economy in the department of economics. He the Mercatus Center there. He is also serves as co-editor-in-chief of The has been a law and economics fellow at Yale Law School and the Review of Austrian Economics, president of the Southern Economic University of Chicago Law School. He teaches a yearly seminar at the Association, and president of the Mont Pelerin Society. Among his most NYU Law School called “Classical Liberalism.” He is the author of many recent publications are The Collected Works of Israel M. Kirzner articles in economics and law journals and is the coauthor of Austrian (co-edited with Frederic Sautet), The Oxford Handbook of Austrian Economics Re-Examined: The Economics of Time and Ignorance, which is Economics (co-edited with Christopher J. Coyne), and Living Economics: now in paperback. Professor Rizzo’s current research is focused on new, or Yesterday, Today, and Tomorrow. soft, paternalism, behavioral economics, and the economic theory of rationality. He is completing a book on the subject, Puppets and Puppet Peter G. Klein is professor of entrepreneurship at Baylor University’s Masters, for Cambridge University Press. Hankamer School of Business and senior research fellow at the Baugh Center for Entrepreneurship and Free Enterprise. He is also adjunct Frédéric Sautet holds a doctorate in economics from the University of professor of strategy and management at the Norwegian School of Paris and a post-doc from New York University, where he studied under Economics and Carl Menger Research Fellow at the Mises Institute. He is Professors Peter Boettke, Israel Kirzner, and Mario Rizzo. He has been an author or editor of four books and has published of over 100 articles, economic adviser at the New Zealand Treasury and a senior economist at chapters, and reviews. His 2012 book Organizing Entrepreneurial the New Zealand Commerce Commission. He has worked for think tanks Judgment (with Nicolai Foss, Cambridge University Press) won the 2014 in the United States and in New Zealand and has been an economic Society for the Development of Austrian Economics/Foundation for consultant since 2002. He taught economics as an adjunct at the University Economic Education Best Book Prize, and his 2010 book The Capitalist of Paris, New York University, and George Mason University, and is now and the Entrepreneur (Mises Institute) has been translated into Chinese associate professor at The Catholic University of America. He has mostly and Portuguese. Klein’s research focuses on the links between published on entrepreneurship, development, and policy. He is the coeditor entrepreneurship, strategy, and organization, with application to of Israel Kirzner’s Collected Works published by Liberty Fund and the innovation, diversification, vertical coordination, health care, and public author of An Entrepreneurial Theory of the Firm (Routledge, 2000). policy. Additional Reading Works Mentioned in the Discussion Online Resources 3 of 24 LEAD ESSAY: Peter J. Boettke, "Israel M. Kirzner on Competitive Behavior, Industrial Structure, and the Entrepreneurial Market Process" [Posted: March 1, 2017]↩ rationality, the existence of monopoly power, the pervasiveness of In the fall of 2014 rumors started circulating that Professor Israel M. externalities, and a variety of deviations from the textbook ideal of perfect Kirzner, along with William Baumol, were possible candidates for the competition. Nobel Prize. The source of the rumor was Thomson Reuters – the scientific database company – and the basis of the rumor was citation There are two ways that economists have responded to the criticisms of patterns. Though it is a different database, but just for ease of search for the operation of the market economy: first, by conceptual clarity, where readers of this essay so they may