Kirzner .. emphasizes that entrepreneurship and competition are two sides of the same coin. As long as people are free to envision alternative uses of resources and act on their visions, markets are competitive. What we mean by competition, Kirzner argues, is not the perfectly competitive market of mainstream economics, but instead the process by which people constantly engage their entrepreneurial alertness to see new and better ways of doing things that others have not seen before. Much of his book is devoted to explaining how this Austrian conception of competition as a “discovery procedure” (to use Hayek’s phrase) is more helpful than the very different conceptions of competition and monopoly used by many economists.
Competition and Entrepreneurship appeared the year before Hayek won the Nobel Prize in 1974, which was also the year of the first major conference on Austrian economics in the postwar era. That period marked the rebirth of Austrian economics, and Kirzner’s book, in many ways, defined the research agenda for the post-revival Austrians. In the succeeding 40 years most of the microeconomic questions that have kept Austrians busy are ones that emerged out of the vision Kirzner laid out in that book. Even on the macroeconomics side, my own work and that of Roger Garrison, for example, are rooted in the importance of price coordination and the ways in which macroeconomic disturbances are revealed in the microeconomic discovery process.
Finally, Kirzner’s book also mapped out a professional strategy for the succeeding generations of academic Austrian economists. The power of Kirzner’s book, and a reason it actually is read by non-Austrians, is that his knowledge of the mainstream arguments is thorough and he never accuses other economists of anything more than intellectual error. He doesn’t question their intelligence or motives or politics. He just patiently, carefully, and thoroughly explains where he thinks they have gone wrong, and why the Austrian perspective is to be preferred.
If Austrian economics, and classical liberalism more generally, are to win minds and hearts in the world of ideas, it will be by doing as Kirzner does, not by demonizing those who disagree, nor by distorting their arguments. Competition and Entrepreneurship remains a guide to both good economics and good scholarship.