Competition as a Discovery Procedure: A Rejoinder to Professor Kirzner on Coordination and Discovery

Article excerpt

Abstract

The Fall 2010 issue of the Journal of Private Enteprise featured a complicated set of papers. The lead article was a long paper by Jason Briggeman and me on Israel Kirzner's work on coordination and discovery. The thrust of our paper was an affirmation of Kirzner's central claims, but with two alterations. First, we propose that the coordination that figures into the central issues ought to be understood as what we call concatenate coordination. Second, the central statements at issue ought not be asserted as holding 100 percent of the time, but rather should be by-and-large statements, making for a strong presumption, not a categorical result. Israel Kirzner then replied to our paper. The pair of papers was then the object of commentary by Peter Boettke and Daniel D'Amico, Steven Horwitz, Gene Callahan, and Martin Ricketts. Here, I respond to Kirzner. My replies to the commentators are, because of space constraints, not contained here, but may be found as an appendix in the longer version of this paper available online.

JEL Codes: A10, B00, C7, D2

Keywords: Coordination; Concatenation; Discovery; Entrepreneurship

I. Introduction

What the market process does is to systematically translate unnoticed opportunities for mutually profitable exchange among individuals into forms that tend to excite the interest and alertness of those most likely to notice what can be spontaneously learned. In this way the opportunities for social improvement via mutually profitable exchanges tend to be most rapidly discovered and exploited.

- Israel Kirzner (1979, p. 150)

The Spring 2010 issue of The Journal of Private Enterprise featured a symposium organized around a critique that Jason Briggeman and I wrote of Professor Kirzner's work on coordination and discovery. Professor Kirzner provided a lengthy reply to the critique. The two papers were the object of commentary by Peter Boettke and Daniel D'Amico (2010), Steven Horwitz (2010), Gene Callahan (2010), and Martin Ricketts (2010). The present piece is written as a response to Professor Kirzner (the "Professor" will be omitted henceforth with no disrespect). I offer responses to the other commentators, in light of the main-body response to Kirzner, in an appendix to the online version of this paper. Briggeman and I are grateful to all of those who have engaged our work, and to The Journal of Private Enterprise for hosting the exchange.

II. Intense Criticism of Deep Formulations Should Not Give Offense

Klein and Briggeman (2010) - henceforth, K-B, treated as a singular noun - critically examines not just one or two features of Kirzner's ideas, but sets of features, and in a way that pulls back the lens and interprets the set in terms of decisions at deep levels of formulation spanning five of Kirzner's books (1973, 1979, 1985, 1992, 2000) as well as numerous additional writings. The K-B critique traces out many dimensions and manifestations, resulting in what Kirzner calls a "barrage of criticisms." Readers of Kirzner's reply will notice that he felt some affront. I hope that any hard feelings can be put aside.

Where Briggeman and I felt that Kirzner became abstruse, we used the word "abstruse." Where we felt that particular invocations of Hayek on coordination were spurious, we used "spurious." Where we felt that Kirzner shifted between meanings, or made inconsistent statements, we used "shifted" and "inconsistent."

A great, visionary thinker such as Kirzner, a maker of master formulations, will run into trade-offs and limitations. In surveying the terrains verged upon when working at a deep level, he must creatively formulate alternatives and assess those alternatives for their relative merits. All great thinkers run up against becoming abstruse and shifting about. For example, Adam Smith's moral theory, particularly the enshrouding of all moral judgment in sympathy, was extensively criticized by Scotsmen of his and the next generations as unduly abstruse (see the criticisms in Reeder, 1997). …