Israel M. Kirzner

Kirzner was born in London, the son of a rabbi and Talmudic scholar. From 1940 he lived in Cape Town, where from 1947 he studied at the University of Cape Town and, as an external student, at the University of London. After taking a B.A. at Brooklyn College in 1954, he completed his studies at New York University (NYU) with an MBA in 1955 and a Ph.D. in 1957. At NYU he studied under Ludwig von Mises, among others. From 1954 he held various positions at NYU, where in 1968 he was finally appointed to a chair. Until his retirement in 2001, NYU offered, in collaboration with Ludwig Lachmann, a study programme in the tradition of the Austrian School that produced numerous economists who either counted themselves among the School or were substantially inspired by it. In Market Theory and the Price System (1963) and Methodological Individualism, Market Equilibrium and Market Process (1967), Kirzner developed a theory of markets and entrepreneurship that explained the endogenous tendency of an economy towards equilibrium through entrepreneurial action. What distinguishes the entrepreneur, according to Kirzner, is his particular "alertness", which enables him to detect price differentials and thus failures of coordination in the market. The profit motive then prompts the entrepreneur to act as a coordinating force. Kirzner's theory of the entrepreneur as "discoverer" is still regarded as pioneering today.