A Review of Israel M.

Kirzner’s Entrepreneurship, Economics, and Economists

Israel M. Kizner opens the chapter with displaying the history of the incentive
entrepreneurship which is divided in to four stages. In the first stage, people were not of the idea
of entrepreneurship, as there are no attempts from the people to differ the entrepreneurial profit
with economic profit. Further, the focus of that time is that profit is only defined on an economic
benefit spectrum, as an income share received. This is maybe due to the fact that the thinker from
18th century are shaped by the industrialization environment, the main debate during that time
was to limit the government intervention towards the market in order for the supply to creates
their own demand, as market is self-sustaining. So this may conclude why then the economist
only mindful about the profit in economic terms instead of a bigger understanding about what
profit means. Moreover the idea of this was based on a thinker that was born during the
mercantilist era, which they are practices upon the need of making a bigger profit to make a
stronger country upon mercantilist perspectives. After the classical economist, the marginalist
revolution takes the lead and thus entrepreneurial role was discussed. In 1880’s and the
following year, the idea of entrepreneurship and entrepreneurial profit was pursued as the it is
subjected to various work and research such as doctoral dissertations, journal, and articles taken
by the neo-classical theorist. Neo-classical theorist have the tendency to think that the resources
is infinite and can be replaced, they also focus upon the division of labor as in the era it generates
enormous wealth and jobs.

The second decade of the present century came, and there are almost enough fully
elaborated theories of entrepreneurship, one of them are by Schumpeter and Knight. Moving
forwards, the first half century of neoclassical took over the perspectives and the entrepreneurial
role was identified during that time. meanwhile in the half-century, around the 1920’s the
modern microeconomic start to abandon the entrepreneurship and no longer give any attention
towards is as the economy of the west (America) due to the products generates new consumer in
the household, and also the soldiers who wins after World War I brought new skill. The winning
of WWI eventually pull the potential of America to have global power. Not so long, in the fourth
stage, can be named as a rediscovery of the entrepreneurship. In December 1967 the meeting of
American Economic Association was held, and followed by conference and book centered in the
idea of entrepreneurship.
 Kirzner then explain that there are two principal objectives, first is to suggest an
explanation regarding the entrepreneurship, entrepreneurial role, and the profit, and second is to
reintegrate the entrepreneurship role to the economic understanding. Exploring further towards
the entrepreneurship during marginalist revolution, the reason why entrepreneurship are able to
flourish the essence of the new-born idea is that because they view factors of income is no longer
the shares of national output, but more to be the base of return for the sale of the sale at market
prices of production services. This means that the profit is no longer seen as the basis of the
state, but it could come from individual and groups. Thus in this era, innovation is considered as
a new way that brought innovative entrepreneur and combines it with the economy. However of
course to create innovation it needs a lot of effort, this concerns the thinker of how then the
entrepreneurship idea is understood. It was a battle between two dilemmatic choices, is that
whether you could successfully invent the innovation or uncertainty that may cost failure?
However one of the theorist mentions that the entrepreneurship isn’t supposed to be game of
gamble, as they are either wins or losses. The entrepreneurship also generates activity to the
extent that it cannot be accommodated with just tangible resources. Entrepreneurship has also
been viewed in a two point matter, one is that it needs a fully consistent of basic data, consumer
taste, resources constraint that might be a hindrance, and available technology. On the other
hand, because the economist have the habit to think that the market is fully coordinated without
thinking that there might be sudden changes in market such as in inconsistent supply or rapid up-
and-down demand it could be worrisome, but based upon Walrasian system, the entrepreneurship
is neither lose or win, as the market will determined it.

To define the entrepreneurship, there are actually various activity that can be associated
with the word including, building a new business ventures (it might be something that never
existed before), new product, altering the product selling price, new way to produce the product,
create changes in the internal of an organization, competition of creativity within the competitors
and many others. In conclusion entrepreneurship and entrepreneurial role, reflected the decision
made by the initiator or the innovator, and it can come from various different factor. In reality,
there are two types of entrepreneur that exist, and both are contradicting and different from each
other. The first one is what I called as an robot entrepreneur, as it fully responded towards the
market condition, seeking for any chances to create opportunities. For instance the market given
the entrepreneur a condition of where the same product becomes undesirable as all was sold in
the same price, if the entrepreneur sees a chance he/she would find cheaper resources to build the
same qualified product then sell it in a lower price to attract customer from their desirable price
that they set. On the other hand there are also entrepreneurship who responded from the external
condition of the market. This means that this entrepreneur create a new innovation to be
introduce towards the market that has never existed before. For instance the service that is
provided by bank is to only paid with credit card or debit card, with this one entrepreneur create
an invention of E-Wallet to provide a new payment system without associating themselves with
bank. It makes people whom are not eligible of owning debit or credit card to be able to pay.