Israel Kirzner

American economist

Israel Meir Kirzner (also Yisroel Mayer Kirzner; born February 13, 1930) is an American economist.

Lecture for the Foundation for Economic Education on July 28, 2006


  • A piece of knowledge about boat-building, about whose correctness Crusoe has no doubts at all, will not be seen as a hunch and will be valued according to Menger's Law. It may be said that Crusoe is well aware that he possesses this kind of information; he will deploy and value it in the same way as he may be imagined to deploy and value other resources he believes are definitely at his disposal. But concerning Crusoe's hunches and his visions in the face of a changing, uncertain environment, it cannot be said at all that Crusoe knows he has a hunch or a vision of the future. He does not act by deliberately utilizing his hunch about the future; instead, he finds that his actions reflect his hunches...In other words, it turns out, the essence of entrepreneurial vision, and what sets it apart from knowledge as a resource, is reflected in Crusoe's lack of self-consciousness concerning it...Crusoe may...gradually come to be aware of his vision. When he does, that vision ceases to be entrepreneurial and comes to be a resource. Moreover, Crusoe's realization that he possesses this definite information resource may itself be entrepreneurial. As soon as he 'knows' that he possesses an item of knowledge,that item ceases to correspond to entrepreneurial vision; instead, as with all resources, it is Crusoe's belief that he has the resources at his disposal that may now constitute his entrepreneurial hunch.

Quotes about Kirzner

  • Humanity’s ability to communicate is becoming vastly greater. Knowledge and information are exploding. The greater shared understanding of the world that humanity is coming to possess should result, as the contemporary Austrian economist Israel Kirzner has emphasized theoretically, in circumstances in which an individual’s predictions of the future become more and more accurate. From an Austrian perspective, this should lead to greater economic prosperity.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction".
  • Those who promote social justice start with the idea that the whole economy is a pie that can be shared differently. But that pie is not a given. It's wealth that is generated in what Israel Kirzner, for instance, calls a market discovery process. If the goods or services offered by a business are not wanted, the business will fail unless it adapts to what the market is demanding. They will do well and produce more if they make a good quality product at an attractive price. So the market is a discovery process in which the capitalists will find the right path as they move forward. But if the state punishes capitalists when they're successful and gets in the way of the discovery process, they will destroy their incentives, and the consequence is that they will produce less. The pie will be smaller, and this will harm society as a whole. Collectivism, by inhibiting these discovery processes and hindering the appropriation of discoveries, ends up binding the hands of entrepreneurs and prevents them from offering better goods and services at a better price. So how come academia, international organisations, economic theorists and politicians demonise an economic system that has not only lifted 90% of the world's population out of extreme poverty but has continued to do this faster and faster?
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