[This paper was originally written for ECON 3499 - Independent Study in Austrian Economics]
Two Theories of the Entrepreneur in Austrian Economics
The role of the entrepreneur is one of the most pivotal elements in the economic theories of the Austrian School. The entrepreneurial nature of the market cited by Austrians is alone sufficient to distinguish their theories from orthodox economics. Instead of a set of static equilibrium models with pristine assumptions, the Austrians elucidate an emergent market revolving around the dynamic actions of entrepreneurs in an uncertain environment, a perpetual state of disequilibrium. Professors Joseph Schumpeter and Israel Kirzner, two of the most prominent entrepreneurial theorists, both agree on the fundamental role of the entrepreneur in the market process, and that economics ought to focus on disequilibrium. However, they interpret the function and purpose of the entrepreneur in two starkly contrasting ways. Schumpeter argued that it is a small cluster of entrepreneur-innovators that cause disequilibrium in the market with revolutionary new inventions, and that this unstable process will ultimately morph capitalism out of existence. Kirzner both incorporates the entrepreneurial nature of the market to a broader range of human action, and takes an optimistic approach, arguing that the entrepreneur instead alleviates disequilibrium and brings the market closer to equilibrium and economic harmony.
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This is a long rant, and there’s no hiding that, but it is critically important. People are not aware that there is a double standard within academics – that which is taught versus that which is true. Social sciences are a method of control if not learned properly, and it is almost never learned properly.
In our culture, truth takes a backseat to political convenience. Conclusions are drawn for the public by the talking heads. Dissent is unpatriotic. Going against the grain, no matter how right you are, and how wrong they are, is looked down upon. You will be branded a heretic, a traitor, and a crackpot.
This is my story, with a focus on Austrian Economics. I live this double standard every day in class, on tests, and in conversations with my peers. I can explain Keynesian & Neoclassical economics that I am taught, but I tell the truth–the Austrian perspective–whenever I can get away with it.
The morals:
*Think for yourself.
*Do not take what you learn/are told at face value (including what I say!)
*Always question, always reason, always test
*Truth is elusive and emergent, never established and static
*Thought control is more prevalent than you think.
*Be a nerd.
Follow these things and you are my hero, and the hero of humanity.
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Every political ideology since the dawn of time has suffered from exaggerations and false impressions, either from a layman’s innocent confusion or through strategic deception by rival ideologies seeking to discredit it. Perhaps no political idea has ever been more falsely understood, so hopelessly marginalized, and so pretentiously reprimanded than that of anarchy.
