Quotation of the Day…

by Don Boudreaux on May 2, 2014

in Competition, Complexity & Emergence, Creative destruction, Economics

… is from page 130 of Israel Kirzner’s 1985 volumeDiscovery and the Capitalist Process (original emphasis):

What keeps the market process in motion is competition - not competition in the sense of “perfect competition,” in which perfect knowledge is combined with very large numbers of buyers and sellers to generate a state of perennial equilibrium – but competition as the rivalrous activities of market participants trying to win profits by offering the market better opportunities than are currently available.  The existence of rivalrous competition requires not large numbers of buyers and sellers but simply freedom of entry.  Competition places pressure on market participants to discover where and how better opportunities, as yet unnoticed, might be offered to the market.  The competitive market process occurs because equilibrium has not yet been attained. This process is thwarted whenever nonmarket barriers are imposed blocking entry to potential competitors.

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