I want to do a quick summation of what I've claimed about Kirzner to avoid confusion before sharing a few thoughts on the Nobel laureates at the talk on Thursday.
I want to make it clear that Kirzner does more work on the area of how we get to equilibrium and the role of the entrepreneur in getting to equilibrium than most mainstream economists. Brad DeLong points out in the comments that Frank Fisher is an important exception. He's talked about Fisher's work here before. This is similar to what I've said in my post on dynamics. We do talk all the time about how outside of equilibrium there are arbitrage opportunities that introduce the incentive to converge (or not) to equilibrium. Of course Fisher and Kirzner (and Brad DeLong) certainly others spend more time thinking about that than most of the rest of us. But this is quite different from the suggestions by Kirzner the other day that mainstream economists are missing something fundamental. So the message very much isn't "Kirzner is no good". The message I'm trying to get across is "Kirzner is not being fair in how he handles mainstream work". If he were to just say "I'm interested in this one problem that mainstream economists don't spend as much time on" that would be many times better than the sort of story he is currently spinning.
And I don't see what's wrong with saying that instead. It's more accurate and more humble.
Anyway, Austrians that like Kirzner tend to think that there is revolutionary potential in all this. Kirzner himself likes to say it's "radical". I think this needs to be more carefully assessed. If you strip out everything all economists agree on (but may spend somewhat less time on) from Kirzner - arbitrage behavior in disequilibrium that helps to get the system to equilibrium - what is really left of Kirzner to be "radical"? Advocates more familiar with Kirzner than me have to answer that question. My impression is not that much because none of his advocates have given me a reason to think otherwise (and they have an incentive to get me to think otherwise).
And please don't waste everyone's time with an answer about arbitrage out of equilibrium. Everyone knows that. That's pretty much the definition of "disequilibrium".
Friday Night Music: When I’m 64
1 day ago