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since pursuing the arbitrage opportunity will result in personal profit for him. He thus bids up the price of an undervalued factor of production until the mistake in the price structure is corrected and the arbitrage opportunity disappears. While he has remedied the mistake, he has earned profit for himself, provided that his faculty of alertness was indeed correct in suggesting to him that a mistake in the price structure originally existed. The entrepreneur, too, acts in the face of uncertainty in that he never has assurance that his foresight into future market conditions is fully correct. He only obtains certain knowledge of whether his activity was properly directed after the fact: the only sure determinant of the success or failure of his perceptive faculty is the test of profit and loss. If the entrepreneur earns a profit, he has acted properly and usefully in the face of uncertainty. If he loses money as a result of his activity, he has evaluated the market mistakenly.

For Kirzner, entrepreneurship is not just another factor of production. Rather, it is "costless." It does not involve the resource expenditures necessary to obtain the services of land, labor, or capital. One does not deliberately set out to become an entrepreneur; nor does one exert oneself to achieve entrepreneurial alertness. One cannot teach oneself to notice economic opportunities in the face of uncertainty. The noticing is primary and happens before any entrepreneurial action is possible. In the real world, the noticing is antecedent to all action, since all real human action occurs in the face of uncertainty and thus has an entrepreneurial component to it. One cannot be taught entrepreneurial awareness in the same manner that one can be taught management techniques or factual knowledge or skill in a given line of work. Every entrepreneur does use all of the above, along with taking calculated risks and purchasing land, labor, and capital for his activities. However, those functions are not in themselves entrepreneurship. Entrepreneurship is the alertness to and foresight of market conditions; it must necessarily precede actions taken in accordance with that alertness.

A possible challenge to Kirzner's theory of entrepreneurship might cite the case of the popular novelist who enjoys a stream of income from his book. Was his activity entrepreneurial, having foreseen a widespread demand in the market for his work? Such a prediction necessarily involved uncertainty, since the book

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