The Meaning of Market Process: Essays in the Development of Modern Austrian Economics.

• Author: Gonce, Richard A.

Entrepreneurship and the market process come alive in this collection of twelve previously published articles preceded by a new essay. All arguably are in the traditions of L. E. von Mises and F. A. von Hayek. While the ideas in good part repeat ones presented in Professor Kirzner's earlier books, throughout them sparkle erudition, insights, and dialectical virtuosity. The ideas do stir up several basic and derivative issues.

From among the basic issues four stand out. First, is the subjective, rather Hayekian conception of entrepreneurship scientifically tractable? An "elusive element", it is founded upon self-interest, "which must be understood with a certain subtlety". Self-interest involves purposiveness, which includes alertness, which means that individuals "are motivated to notice that which it is to their benefit to notice". As for the possible sources or determinants of alertness, "very helpful or extensive theoretical or empirical materials" do not now exist. Inherent in alertness is a "discovery potential". Pure profit opportunities can switch it on in an unknown way, yielding perceptions that pierce utter or sheer ignorance, or ignorance of which one is ignorant. The outcomes, unplanned, spontaneous, and achieved without cost or calculation or any attitude toward uncertainty-bearing, are discoveries of pure profit opportunities. Discoveries create ex nihilo economic values. In the making of discoveries, and not decisions, rationality plays a role; this admittedly is "a highly unorthodox understanding" of its role. In the end, entrepreneurial discoveries are "unmodellable".

Second, while this defined meaning of discovery can reach the case of pure profits from arbitrage opportunities known on the basis of information readily available at a given time, or in a single period context, can this defined meaning of discovery reach the case of pure profits from capital investment opportunities known on the basis of forecasts made in the face of uncertainty in a multiperiod context? The multiperiod case is "analytically parallel, at least" to the single period one, the book proposes, and it continues: alertness also means "prescience," and it can make "anticipatory" discoveries. Whether this defined meaning of discovery can reach the case of pure profits from capital investment opportunities seems to be open to question.

Third, granting the definitions of entrepreneurship and discovery, and granting too the view that a capitalist economy...