by Kirzner
[Front Matter and Table of Contents]: The front matter includes the title page, publication details, and table of contents for Israel M. Kirzner's work on the capitalist process. It outlines the book's structure, covering topics from the history of economic thought on entrepreneurship to the impact of taxes and regulation on market discovery. [Preface and Acknowledgments]: Kirzner introduces his vision of market capitalism as an ongoing process of creative discovery rather than a static state of equilibrium. He synthesizes the work of Mises on the entrepreneurial process and Hayek on the division of knowledge, arguing that entrepreneurial profit-seeking is a spontaneous process of learning that drives market coordination. He also acknowledges the scholars and foundations that supported his research. [Chapter One: Entrepreneurship, Economics, and Economists]: Kirzner traces the history of the entrepreneurial role in economic thought through four stages, noting its neglect in mid-20th-century microeconomics due to an obsession with equilibrium. He critiques two extreme contemporary views: the 'neoclassical' view (Schultz) which treats entrepreneurship as a calculable resource, and the 'originative' view (Shackle) which sees it as purely unpredictable. Kirzner proposes a middle path based on 'alertness,' arguing that entrepreneurship is the driving force that makes equilibrium tendencies intelligible without abandoning the core of economic theory. [Chapter Two: The Primacy of Entrepreneurial Discovery]: This chapter explores how different economic systems—free market, socialist, and regulated—evoke or inhibit entrepreneurial discovery. Kirzner argues that entrepreneurship is not a conventional scarce resource but a costless quality of 'alertness' to unnoticed opportunities. He critiques market socialism (Lange) for failing to provide a mechanism for discovering errors and argues that government regulation often stunts the discovery process by removing the lure of pure profit and creating barriers to entry. [Conclusion: The Urgency for Entrepreneurial Research]: Kirzner concludes his discussion on the necessity of incentives for entrepreneurial discovery across different economic systems. He emphasizes that society has an enormous stake in researching how systems permit discoverers to align personal interest with socially desirable change. [Uncertainty, Discovery, and Human Action: The Misesian System]: This section introduces a study of the entrepreneurial profile within the Misesian system. Kirzner explores how Mises integrates the role of the entrepreneur into the broader concept of human action, arguing that uncertainty is not just a condition but an essential, subtle element that distinguishes the Misesian view from other economists like Knight or Shackle. [The Background of the Present Exploration: Alertness vs. Uncertainty]: Kirzner reviews his previous work on entrepreneurship, which prioritized 'alertness' over 'uncertainty' for didactic purposes to distinguish market processes from equilibrium states. He addresses critiques from Hazlitt, Rothbard, White, and High, who argue that his focus on alertness either neglects the speculative nature of action or incorrectly links uncertainty to the definition of entrepreneurship. [The Limits of Rationality and the Discovery of Error]: Kirzner distinguishes Misesian human action from Robbinsian economizing by identifying two elements: the limits of rationality and the discovery of error. He argues that while rationality explains consistent allocation within a given framework, human action involves the creative selection of the framework itself. Using a Crusoe example, he illustrates how entrepreneurial profit arises from discovering that resources were previously undervalued (a violation of Menger's Law). [Uncertainty and Discovery: Two Sides of the Same Coin]: Kirzner resolves the apparent tension between uncertainty-bearing and error-discovery. He argues that alertness is the motivated propensity to ensure the envisaged future corresponds to the realized future. Uncertainty provides the scope for entrepreneurship, while the lure of pure profit provides the incentive to 'switch on' alertness. He then maps these individual concepts to the market level, where discoordination corresponds to uncertainty and price divergence corresponds to error. [Time, Uncertainty, and Multiperiod Entrepreneurship]: The author extends the entrepreneurial model to include the passage of time. In a multiperiod context, alertness shifts from present facts to future possibilities, requiring qualities like vision and boldness. Kirzner argues that while the capitalist bears the financial hazard, the entrepreneur's role is to pierce the fog of uncertainty to achieve social coordination. He defends the use of metaphors like 'seeing the future' as a way to describe the coordinative power of the human imagination. [The Entrepreneurial Process: Short-Run and Long-Run]: Kirzner defines the 'entrepreneurial process' in two ways: short-run market-clearing competition and long-run growth through innovation. He critiques growth economics for neglecting the entrepreneur and treating resources and technology as given or automatic. He argues that economic development is an open-ended process of discovery that cannot be fully captured by aggregate models or central planning. [An Entrepreneurial View of Economic Development]: Using a Crusoe framework, Kirzner distinguishes between technical knowledge (a resource) and the knowledge of resource availability (discovery). He argues that growth occurs not just through expanding opportunities (investment/planning) but through expanded awareness of existing opportunities. This distinction is vital because the 'knowledge of value' cannot be deliberately sought in the same way as technical skills. [Allocation, Growth, and Types of Entrepreneurial Activity]: Kirzner critiques the dichotomy between resource allocation and economic growth, arguing both are driven by entrepreneurial discovery. He identifies three types of activity: arbitrage (present price gaps), speculation (intertemporal gaps), and innovation (creating new methods/outputs). All are driven by the pure profit incentive and require freedom of entry to function competitively. [The Entrepreneurial Process and Public Policy]: Kirzner discusses how public policy can nurture or suppress the 'entrepreneurial spirit.' He argues that stimulating discovery is different from increasing resource supply; it requires an environment of economic freedom, security of property rights, and freedom of entry. He warns against taking the entrepreneur for granted in fiscal or regulatory policy, as human ingenuity requires an open environment to achieve social coordination. [Taxes and Discovery: An Entrepreneurial Perspective]: Kirzner critiques orthodox taxation theory for assuming that opportunities are given and known. He introduces a distinction between two types of incentives: those that overcome costs of perceived alternatives (Type 1) and those that inspire the discovery of hitherto unnoticed opportunities (Type 2). He argues that taxes on pure profit act as a disincentive to the second type of incentive, affecting what decision-makers 'notice' in the first place. [The Incentive of Pure Profit and Its Ubiquity]: Kirzner argues that pure entrepreneurial profit—unlike wages or interest—serves exclusively as an incentive for discovery (Type 2). Because pure profit is a surplus above all necessary costs, it does not motivate action by making it 'worthwhile' in a cost-benefit sense, but by attracting notice to overlooked possibilities. He notes that while accounting categories are mixed, the entrepreneurial element is ubiquitous in all human action. [Luck, Imagination, and the Open-Ended World]: Kirzner addresses Shackle's distinction between 'lucky' profits and those won through 'imagination.' He argues that even 'unexpected' or 'lucky' profits play an incentive role because the entrepreneur's awareness of an open-ended world—where the unexpected can happen—is what 'switches on' their antennae. Taxing away 'lucky' gains converts open-ended situations into closed ones, stifling the very alertness required for discovery. [Moral Aspects of Profit and Research Directions]: The author explores the moral implications of profit, noting that while pure profit isn't a reward for 'productive effort' in the traditional sense, it can be defended via a 'finders-keepers' ethic. He concludes by outlining a research agenda for taxation, including the impact of partial taxation, the role of entrepreneurship in corporations (referencing Manne), and the difficulty of empirically isolating pure profit from accounting data. [Introduction: The Pendulum of Professional Opinion on Regulation]: Kirzner introduces the historical debate over government regulation, noting the shift from a strongly interventionist orthodoxy back toward a market-process appreciation. He distinguishes the interventionist position from radical anti-capitalism, noting that interventionists typically accept the efficiency of markets in equilibrium but argue that 'market failure' necessitates state correction. Kirzner outlines his thesis: regulation is harmful not just because of self-interested regulators or equilibrium distortions, but because it interferes with the fundamental entrepreneurial process of discovery. [Interventionism and Socialism: A Parallel in Economic Calculation]: Kirzner draws a parallel between the modern failure of interventionist measures and the socialist calculation debate initiated by Mises and Hayek. He argues that the same misunderstandings of market operations that led to the belief in viable socialism also underpin the belief in successful market regulation. While the 'hampered market' still possesses prices (unlike a socialized economy), the Mises-Hayek critique remains relevant because it highlights the hazards of trying to improve upon or simulate spontaneous market outcomes through deliberate extra-market action. [Mises and Hayek on Socialism: The Calculation Debate]: This section reviews the history of the socialist calculation debate, focusing on Mises's 1920 demonstration that without private ownership and market exchange, there are no factor prices to guide efficient resource allocation. It contrasts this with the 'market socialist' responses of Lange and Dickinson, who proposed that central planners could simulate the market through 'parametric' prices and trial-and-error adjustments. Hayek's critique of these proposals is highlighted, emphasizing that a system of regimented prices cannot replicate the dynamic agility of a market where individuals act on their own initiative. [The Failure of the Parametric Price View]: Kirzner critiques the 'parametric' view of prices adopted by Lange and subsequent textbook literature. He argues that Lange misunderstood the market by assuming prices are simply given data to which participants passively adjust. In reality, the market's essential function is to provide an arena where entrepreneurs, seeking profit from disequilibrium, 'hammer out' prices. By excising the entrepreneurial function, the socialist model fails to account for the very process that nudges prices toward equilibrium. This misunderstanding stems from a preoccupation with perfectly competitive equilibrium models rather than the Austrian view of the market as a rivalrous process. [The Market Process: An Austrian View]: Kirzner outlines the core Austrian concepts necessary for understanding the market as a discovery process. He redefines 'competition' as a rivalrous activity requiring only freedom of entry, rather than a large number of participants. He describes the market as a 'discovery procedure' that mobilizes existing knowledge and generates awareness of previously unnoticed opportunities. Finally, he distinguishes entrepreneurial profit (the incentive for discovering gaps between cost and revenue) from the standard theory of the firm's profit maximization, and explains that market prices are disequilibrium exchange ratios that signal opportunities for further discovery. [The Nature and Critique of the Regulated Market]: Kirzner examines the 'hampered' or regulated market, where government interventions (like price controls or quality standards) are introduced to correct perceived unsatisfactory outcomes. Unlike socialism, the regulated market still allows for buying, selling, and entrepreneurial profit-seeking, but these activities are constrained and distorted. Kirzner summarizes four traditional lines of criticism against regulation—scarcity, consumer sovereignty, previous intervention compounding, and regulatory technology costs—before proposing his own Austrian-inflected critique based on the discovery process. [Government Regulation and the Market Discovery Process]: Kirzner argues that the primary peril of regulation is its impact on the market's discovery process. He identifies four levels of this impact: 1) regulators failing to assess the future course of an unregulated market; 2) the lack of entrepreneurial profit incentives for government officials; 3) the stifling of market-generated discovery; and 4) the creation of 'superfluous' or unintended discovery processes. He contends that intervention may impede the very corrections it seeks to achieve by blocking the entrepreneurial alertness that identifies and solves inefficiencies. [The Undiscovered and Unsimulated Discovery Processes]: Kirzner analyzes why regulators often misunderstand the market: they fail to realize that the market may have already discovered the best feasible state or that it would soon correct existing inefficiencies if left alone. Furthermore, because government officials are institutionally precluded from capturing pecuniary profits, they lack the discovery-inspiring incentives of the entrepreneur. Without the proxy of profit and loss, regulators have no systematic way to discover their own errors or identify 'hitherto undreamed of possibilities' for efficiency, making the simulation of market discovery impossible. [The Stifled and Superfluous Discovery Processes]: Kirzner discusses how regulation stifles discovery by blocking entry and profit opportunities, which prevents the uncovering of new supply sources or products. Conversely, regulation also creates 'superfluous' discovery processes—unintended entrepreneurial reactions to the new, artificial profit opportunities created by the regulations themselves (including bribery and corruption). Because the discovery of the unknown cannot be predicted, the imposition of constraints inevitably leads to a pattern of consequences that are unplanned and likely less desirable than those of a free market. [Discovery, Evidence, and Illustration: Innovation and Insider Trading]: Kirzner acknowledges the difficulty of providing empirical evidence for 'what might have been discovered' but offers illustrations from economic literature. He cites studies on technological change in regulated industries and Peltzman's work on drug amendments to suggest that regulation slows the discovery of new techniques and products. He also references Henry Manne's work on insider trading, arguing that such regulations inhibit the exercise of entrepreneurship within corporate firms by removing the profit incentives that reward successful discovery. [Conclusion: The Perils of Regulation]: The author concludes the essay on the perils of regulation by emphasizing how government restrictions interfere with the spontaneous discovery process of the market. He draws parallels between the problems of regulation and the classic Mises-Hayek criticisms of economic calculation under socialism, arguing that while regulation may seek specific benefits, it inherently risks causing inefficiency and stagnation by stifling entrepreneurial awareness. [Chapter Seven: Entrepreneurship and the Future of Capitalism]: Kirzner explores the role of entrepreneurship in determining the future of capitalism, arguing that a deep understanding of the entrepreneurial process actually limits our ability to make detailed economic forecasts because discovery is inherently indeterminate. He critiques the standard 'allocation paradigm' and 'equilibrium' models of mainstream economics for failing to account for the discovery of new resources and goals. By distinguishing between arbitrage-level and long-run creative entrepreneurship, he suggests that capitalism's vitality lies in its ability to transcend finite resource constraints through human imagination, a view he compares with Julian Simon's 'ultimate resource' and Schumpeter's 'creative destruction.' [Notes to Chapters One through Seven]: Comprehensive endnotes for all seven chapters of the book, providing citations for key Austrian and mainstream economic texts. References include major works by Mises, Hayek, Schumpeter, Knight, and Shackle, as well as specific studies on insider trading, socialist calculation, and the economics of information. [Index and Library Metadata]: Alphabetical index of subjects and authors mentioned in the text, followed by library circulation records and cataloging information for the volume 'Discovery and the Capitalist Process'.
The front matter includes the title page, publication details, and table of contents for Israel M. Kirzner's work on the capitalist process. It outlines the book's structure, covering topics from the history of economic thought on entrepreneurship to the impact of taxes and regulation on market discovery.
Read full textKirzner introduces his vision of market capitalism as an ongoing process of creative discovery rather than a static state of equilibrium. He synthesizes the work of Mises on the entrepreneurial process and Hayek on the division of knowledge, arguing that entrepreneurial profit-seeking is a spontaneous process of learning that drives market coordination. He also acknowledges the scholars and foundations that supported his research.
Read full textKirzner traces the history of the entrepreneurial role in economic thought through four stages, noting its neglect in mid-20th-century microeconomics due to an obsession with equilibrium. He critiques two extreme contemporary views: the 'neoclassical' view (Schultz) which treats entrepreneurship as a calculable resource, and the 'originative' view (Shackle) which sees it as purely unpredictable. Kirzner proposes a middle path based on 'alertness,' arguing that entrepreneurship is the driving force that makes equilibrium tendencies intelligible without abandoning the core of economic theory.
Read full textThis chapter explores how different economic systems—free market, socialist, and regulated—evoke or inhibit entrepreneurial discovery. Kirzner argues that entrepreneurship is not a conventional scarce resource but a costless quality of 'alertness' to unnoticed opportunities. He critiques market socialism (Lange) for failing to provide a mechanism for discovering errors and argues that government regulation often stunts the discovery process by removing the lure of pure profit and creating barriers to entry.
Read full textKirzner concludes his discussion on the necessity of incentives for entrepreneurial discovery across different economic systems. He emphasizes that society has an enormous stake in researching how systems permit discoverers to align personal interest with socially desirable change.
Read full textThis section introduces a study of the entrepreneurial profile within the Misesian system. Kirzner explores how Mises integrates the role of the entrepreneur into the broader concept of human action, arguing that uncertainty is not just a condition but an essential, subtle element that distinguishes the Misesian view from other economists like Knight or Shackle.
Read full textKirzner reviews his previous work on entrepreneurship, which prioritized 'alertness' over 'uncertainty' for didactic purposes to distinguish market processes from equilibrium states. He addresses critiques from Hazlitt, Rothbard, White, and High, who argue that his focus on alertness either neglects the speculative nature of action or incorrectly links uncertainty to the definition of entrepreneurship.
Read full textKirzner distinguishes Misesian human action from Robbinsian economizing by identifying two elements: the limits of rationality and the discovery of error. He argues that while rationality explains consistent allocation within a given framework, human action involves the creative selection of the framework itself. Using a Crusoe example, he illustrates how entrepreneurial profit arises from discovering that resources were previously undervalued (a violation of Menger's Law).
Read full textKirzner resolves the apparent tension between uncertainty-bearing and error-discovery. He argues that alertness is the motivated propensity to ensure the envisaged future corresponds to the realized future. Uncertainty provides the scope for entrepreneurship, while the lure of pure profit provides the incentive to 'switch on' alertness. He then maps these individual concepts to the market level, where discoordination corresponds to uncertainty and price divergence corresponds to error.
Read full textThe author extends the entrepreneurial model to include the passage of time. In a multiperiod context, alertness shifts from present facts to future possibilities, requiring qualities like vision and boldness. Kirzner argues that while the capitalist bears the financial hazard, the entrepreneur's role is to pierce the fog of uncertainty to achieve social coordination. He defends the use of metaphors like 'seeing the future' as a way to describe the coordinative power of the human imagination.
Read full textKirzner defines the 'entrepreneurial process' in two ways: short-run market-clearing competition and long-run growth through innovation. He critiques growth economics for neglecting the entrepreneur and treating resources and technology as given or automatic. He argues that economic development is an open-ended process of discovery that cannot be fully captured by aggregate models or central planning.
Read full textUsing a Crusoe framework, Kirzner distinguishes between technical knowledge (a resource) and the knowledge of resource availability (discovery). He argues that growth occurs not just through expanding opportunities (investment/planning) but through expanded awareness of existing opportunities. This distinction is vital because the 'knowledge of value' cannot be deliberately sought in the same way as technical skills.
Read full textKirzner critiques the dichotomy between resource allocation and economic growth, arguing both are driven by entrepreneurial discovery. He identifies three types of activity: arbitrage (present price gaps), speculation (intertemporal gaps), and innovation (creating new methods/outputs). All are driven by the pure profit incentive and require freedom of entry to function competitively.
Read full textKirzner discusses how public policy can nurture or suppress the 'entrepreneurial spirit.' He argues that stimulating discovery is different from increasing resource supply; it requires an environment of economic freedom, security of property rights, and freedom of entry. He warns against taking the entrepreneur for granted in fiscal or regulatory policy, as human ingenuity requires an open environment to achieve social coordination.
Read full textKirzner critiques orthodox taxation theory for assuming that opportunities are given and known. He introduces a distinction between two types of incentives: those that overcome costs of perceived alternatives (Type 1) and those that inspire the discovery of hitherto unnoticed opportunities (Type 2). He argues that taxes on pure profit act as a disincentive to the second type of incentive, affecting what decision-makers 'notice' in the first place.
Read full textKirzner argues that pure entrepreneurial profit—unlike wages or interest—serves exclusively as an incentive for discovery (Type 2). Because pure profit is a surplus above all necessary costs, it does not motivate action by making it 'worthwhile' in a cost-benefit sense, but by attracting notice to overlooked possibilities. He notes that while accounting categories are mixed, the entrepreneurial element is ubiquitous in all human action.
Read full textKirzner addresses Shackle's distinction between 'lucky' profits and those won through 'imagination.' He argues that even 'unexpected' or 'lucky' profits play an incentive role because the entrepreneur's awareness of an open-ended world—where the unexpected can happen—is what 'switches on' their antennae. Taxing away 'lucky' gains converts open-ended situations into closed ones, stifling the very alertness required for discovery.
Read full textThe author explores the moral implications of profit, noting that while pure profit isn't a reward for 'productive effort' in the traditional sense, it can be defended via a 'finders-keepers' ethic. He concludes by outlining a research agenda for taxation, including the impact of partial taxation, the role of entrepreneurship in corporations (referencing Manne), and the difficulty of empirically isolating pure profit from accounting data.
Read full textKirzner introduces the historical debate over government regulation, noting the shift from a strongly interventionist orthodoxy back toward a market-process appreciation. He distinguishes the interventionist position from radical anti-capitalism, noting that interventionists typically accept the efficiency of markets in equilibrium but argue that 'market failure' necessitates state correction. Kirzner outlines his thesis: regulation is harmful not just because of self-interested regulators or equilibrium distortions, but because it interferes with the fundamental entrepreneurial process of discovery.
Read full textKirzner draws a parallel between the modern failure of interventionist measures and the socialist calculation debate initiated by Mises and Hayek. He argues that the same misunderstandings of market operations that led to the belief in viable socialism also underpin the belief in successful market regulation. While the 'hampered market' still possesses prices (unlike a socialized economy), the Mises-Hayek critique remains relevant because it highlights the hazards of trying to improve upon or simulate spontaneous market outcomes through deliberate extra-market action.
Read full textThis section reviews the history of the socialist calculation debate, focusing on Mises's 1920 demonstration that without private ownership and market exchange, there are no factor prices to guide efficient resource allocation. It contrasts this with the 'market socialist' responses of Lange and Dickinson, who proposed that central planners could simulate the market through 'parametric' prices and trial-and-error adjustments. Hayek's critique of these proposals is highlighted, emphasizing that a system of regimented prices cannot replicate the dynamic agility of a market where individuals act on their own initiative.
Read full textKirzner critiques the 'parametric' view of prices adopted by Lange and subsequent textbook literature. He argues that Lange misunderstood the market by assuming prices are simply given data to which participants passively adjust. In reality, the market's essential function is to provide an arena where entrepreneurs, seeking profit from disequilibrium, 'hammer out' prices. By excising the entrepreneurial function, the socialist model fails to account for the very process that nudges prices toward equilibrium. This misunderstanding stems from a preoccupation with perfectly competitive equilibrium models rather than the Austrian view of the market as a rivalrous process.
Read full textKirzner outlines the core Austrian concepts necessary for understanding the market as a discovery process. He redefines 'competition' as a rivalrous activity requiring only freedom of entry, rather than a large number of participants. He describes the market as a 'discovery procedure' that mobilizes existing knowledge and generates awareness of previously unnoticed opportunities. Finally, he distinguishes entrepreneurial profit (the incentive for discovering gaps between cost and revenue) from the standard theory of the firm's profit maximization, and explains that market prices are disequilibrium exchange ratios that signal opportunities for further discovery.
Read full textKirzner examines the 'hampered' or regulated market, where government interventions (like price controls or quality standards) are introduced to correct perceived unsatisfactory outcomes. Unlike socialism, the regulated market still allows for buying, selling, and entrepreneurial profit-seeking, but these activities are constrained and distorted. Kirzner summarizes four traditional lines of criticism against regulation—scarcity, consumer sovereignty, previous intervention compounding, and regulatory technology costs—before proposing his own Austrian-inflected critique based on the discovery process.
Read full textKirzner argues that the primary peril of regulation is its impact on the market's discovery process. He identifies four levels of this impact: 1) regulators failing to assess the future course of an unregulated market; 2) the lack of entrepreneurial profit incentives for government officials; 3) the stifling of market-generated discovery; and 4) the creation of 'superfluous' or unintended discovery processes. He contends that intervention may impede the very corrections it seeks to achieve by blocking the entrepreneurial alertness that identifies and solves inefficiencies.
Read full textKirzner analyzes why regulators often misunderstand the market: they fail to realize that the market may have already discovered the best feasible state or that it would soon correct existing inefficiencies if left alone. Furthermore, because government officials are institutionally precluded from capturing pecuniary profits, they lack the discovery-inspiring incentives of the entrepreneur. Without the proxy of profit and loss, regulators have no systematic way to discover their own errors or identify 'hitherto undreamed of possibilities' for efficiency, making the simulation of market discovery impossible.
Read full textKirzner discusses how regulation stifles discovery by blocking entry and profit opportunities, which prevents the uncovering of new supply sources or products. Conversely, regulation also creates 'superfluous' discovery processes—unintended entrepreneurial reactions to the new, artificial profit opportunities created by the regulations themselves (including bribery and corruption). Because the discovery of the unknown cannot be predicted, the imposition of constraints inevitably leads to a pattern of consequences that are unplanned and likely less desirable than those of a free market.
Read full textKirzner acknowledges the difficulty of providing empirical evidence for 'what might have been discovered' but offers illustrations from economic literature. He cites studies on technological change in regulated industries and Peltzman's work on drug amendments to suggest that regulation slows the discovery of new techniques and products. He also references Henry Manne's work on insider trading, arguing that such regulations inhibit the exercise of entrepreneurship within corporate firms by removing the profit incentives that reward successful discovery.
Read full textThe author concludes the essay on the perils of regulation by emphasizing how government restrictions interfere with the spontaneous discovery process of the market. He draws parallels between the problems of regulation and the classic Mises-Hayek criticisms of economic calculation under socialism, arguing that while regulation may seek specific benefits, it inherently risks causing inefficiency and stagnation by stifling entrepreneurial awareness.
Read full textKirzner explores the role of entrepreneurship in determining the future of capitalism, arguing that a deep understanding of the entrepreneurial process actually limits our ability to make detailed economic forecasts because discovery is inherently indeterminate. He critiques the standard 'allocation paradigm' and 'equilibrium' models of mainstream economics for failing to account for the discovery of new resources and goals. By distinguishing between arbitrage-level and long-run creative entrepreneurship, he suggests that capitalism's vitality lies in its ability to transcend finite resource constraints through human imagination, a view he compares with Julian Simon's 'ultimate resource' and Schumpeter's 'creative destruction.'
Read full textComprehensive endnotes for all seven chapters of the book, providing citations for key Austrian and mainstream economic texts. References include major works by Mises, Hayek, Schumpeter, Knight, and Shackle, as well as specific studies on insider trading, socialist calculation, and the economics of information.
Read full textAlphabetical index of subjects and authors mentioned in the text, followed by library circulation records and cataloging information for the volume 'Discovery and the Capitalist Process'.
Read full text