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had not existed before, and there was no way to anticipate demand for it with perfect confidence. Or was his activity an exertion of his skill and labor in writing the book? That is, did the novelist write the book because he foresaw market demand for it, or did the market demand occur as a resultant side effect of the novelist's writing the book?

Hypothetically, Kirzner's answer to such a critique would have distinguished the author's function as an entrepreneur from his function as a laborer. The author acted as an entrepreneur to the extent that he accurately foresaw the market's demand for his product and acted on this prediction. To the extent that he created the literature as a means to his artistic expression and the conveyance of his intellectual values and observations, irrespective of popular economic demand, he acted as a laborer toward his own consumption. Even the actualization of his desire to sell the book, however, required him to function in the capacity of a laborer in actually writing it. The actual writing of the book was not inherently entrepreneurial, though entrepreneurial alertness may have led up to it and even justified it.

To challenge the Kirznerian theory of entrepreneurship, "mainstream" economists also refer to individuals' intentional undertaking of market research. Market research gives the entrepreneur more accurate information on the basis of which he might decide what economic opportunities exist and how to benefit from them. However, market research is a systematic endeavor, requiring expenditure of time and resources, hence not being "costless" as Kirzner claims entrepreneurship to be.

A defender of Kirzner's theory would state in response that the undertaking of market research is not in itself entrepreneurship. Rather, the exercise of entrepreneurial awareness occurs even before the research happens. Entrepreneurship here would consist of recognizing that the market research is a useful endeavor to undertake in the first place. Once this decision is made, the resource expenditures toward actually conducting the market research are not strictly entrepreneurial.

Kirzner's theory underscores the importance of entrepreneurship to a successful market economy. Entrepreneurship cannot be taught; it cannot be planned or centrally managed. However, it is indispensable to addressing the uncertainty inherent to all human action and to allowing any mistakes made in the face of this uncertainty to be corrected. The entrepreneur's selfish motivation for profit presents him with a reliable incentive to remedy sheer ignorance and error in the marketplace, thereby improving life for all.

Learn more about this author, G. Stolyarov II.
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