Israel Kirzner argues that the essence of entrepreneurship is alertness to as-yet-undiscovered and (hence) yet-to-be-exploited profit opportunities. If Kirzner is correct, then economists who believe that monopsony power infects the market for low-skilled workers – and who believe that the surplus earnings made possible by this monopsony power have yet to be competed away on other margins (thus leaving scope for higher minimum wages to increase the employment of low-skilled workers) – have already performed the crucial entrepreneurial function. Their alertness alerted them to a profit opportunity.
As Kirzner notes, the entrepreneur himself or herself need not be the actual person who – in “Robbinsian maximizing” fashion – organizes, finances, and directs the array of physical actions necessary to exploit the profit opportunity. He or she can be that person, but need not be. The entrepreneur, though, is the agent who tells the world of this opportunity. Hopefully, for the entrepreneur’s sake, he or she will figure out some way to personally profit from his or her happy discovery. But such profit for the alert entrepreneur is not strictly necessary. Someone – once the entrepreneur reveals the profit opportunity to the pubic – will indeed figure out a way to exploit that opportunity.
I remain highly skeptical that every last one of the very intelligent and well-connected economics scholars who claim to believe in the reality of profit-laden monopsony power is too dim-witted to figure out some way to personally exploit this alleged discovery. (What does such a ubiquitous inability, assuming it to be real, say about the quality of the intellects who teach economics in America’s finest universities?) I am, however, even more skeptical that none – not one – of the greedy, profit-grabbing capitalist S.O.B. business people who are forever on the lookout for opportunities to turn a profit are also consistently failing to figure out ways to personally profit from these economists’ entrepreneurial discovery – especially given that the crucial entrepreneurial task has already been performed and the resulting profit opportunity left waiting for these skilled business people to exploit.