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Quotation of the Day…

… is from pages 3-4 of Israel Kirzner’s 1974 Hillsdale College lecture “Capital, Competition, and Capitalism” as this lecture is reprinted in Competition, Economic Planning, and the Knowledge Problem (Peter J. Boettke and Frédéric Sautet, eds., 2018), which is a volume in The Collected Works of Israel M. Kirzner:

The theory of the competitive market process teaches that where resources within a society leave opportunities for improvement via exchange, production, or some combination of both, they will appear as opportunities for entrepreneurial profit. The lure of profit will lead entrepreneurs to discover these opportunities and pursue them until, through the competitive entrepreneurial process, resources have been reallocated in an equilibrium that eliminates both the profit opportunities and the misallocation. Freedom of entry is crucial to this process. The process depends heavily on the likelihood that, whenever anyone perceives an opportunity for improvement, he will be motivated by the lure of profit to exploit that opportunity. For this actually to occur it is necessary that no one who has perceived such an opportunity be barred from exploiting it.