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Quotation of the Day…

… is from page 10 of Israel Kirzner’s and Frederic Sautet’s excellent June 2006 monograph, “The Nature and Role of Entrepreneurship in Markets: Implications for Policy” (footnote deleted):

Markets “work” because the discovery of good entrepreneurial ideas constitutes the discovery of ways of improving the efficiency of production with given resources, the discovery of sources of as-yet-untapped resources, and the discovery of as-yet-unknown possibilities for consumer satisfaction.

DBx: Indeed. Contrary to many mainstream-economists’ claims, markets do not “work” only when information is complete and ‘symmetrically distributed’ and when all prices are in equilibrium.

The real-world market economy is an institution is a never-ending process for discovering existing ‘imperfections’ and creatively devising ways to improve matters – ways such as new products, new contractual terms, new arrangements of supply lines, new sources of financing. Those persons who assert that we cannot rely on markets under conditions of incomplete and asymmetrically distributed information have things entirely backwards.


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