Foundations of Entrepreneurship and Economic Development

Foundations of Entrepreneurship and Economic Development

Foundations of Entrepreneurship and Economic Development

Foundations of Entrepreneurship and Economic Development


This well-written book is the first to deal with entrepreneurship in all its aspects. It considers the economic, psychological, political, legal and cultural dimensions of entrepreneurship from a market-process perspective.


This book focuses upon the phenomenon of entrepreneurial alertness and its determinants. Alertness, of course, has been the central theme of Israel Kirzner's path-breaking work on entrepreneurship and the character of competitive market processes. Kirzner focuses mainly upon the economic function of alert entrepreneurs and places less emphasis upon the environmental conditions that are most conducive to the generation of entrepreneurial talent. That is the subject of this book.

My study applies Kirzner's theory of entrepreneurship and delves into the psychological, cultural, political and institutional contexts that frame entrepreneurial discoveries of unexploited gains from trade. It invokes psychological and cultural explanatory principles in its account of entrepreneurial behaviour. It is concerned with the process and not just the outcome of entrepreneurial cognition. With its emphasis upon the extralogical forces that affect entrepreneurship, this book is an important complement to my previous work, Entrepreneurship and the Market Process. That book sought to investigate the latent structure of rationality behind entrepreneurs' problem-solving efforts. It provided a predominantly logical skeleton of the growth-of-knowledge process inherent in the operation of markets.

The present work is an elaboration of ideas first sketched out in my monograph Wellsprings of Enterprise, published by the New Zealand Institute of Economic Research (NZIER) in 1994. The NZ Treasury commissioned the research project that resulted in that monograph. I am grateful to NZIER for permission to use passages from that earlier work.

I am also grateful for permission to publish material on money and alertness, which first appeared in Journal des Economistes et des Etudes Humaines.

The writing of this book would not have been possible without the generous support and financial assistance of the following individuals and organisations: Mrs Sally Somers von Behren, Mrs Ethelmae Humphreys (J.P. Humphreys Foundation), David B. Kennedy (Earhart Foundation), Richard M. Larry (Sarah Scaife Foundation) and Robert Reinwald (Österreichische Nationalbank).

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