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Bonus Quotation of the Day…

… is from page 71 of Israel Kirzner’s excellent March 2000 Freeman essay titled “The Irresistible Force of Market Competition,” as this essay 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 (original emphasis):

What is needed to stimulate that all-powerful entrepreneurial-competitive process upon which the free market depends is nothing more than freedom of entry to anyone with an idea of how to profit by serving consumers more faithfully than they are being currently served. It is important to remember that no claim is made that freedom of entry entails that competitors refrain from attempts to monopolize markets. They may attempt to do so; and certainly their efforts may possibly place the consumer in a worse position (than he might be under a system reflecting perfect knowledge). The Austrian claim is that since no such perfect knowledge can exist, we must rely on the competitive-entrepreneurial process to reveal how the consumer may be better served. To obstruct this process in the name of competition (!) is to undermine the only way through which the tendency toward social efficiency is possible. By obstructing or preventing entrepreneurial steps taken that do not fit the “perfectly competitive” model of universal utter powerlessness [of firms to alter price or product quality] – even if such obstruction or prevention stems from the best of intentions on behalf of consumers – government is necessarily tending, to a greater or lesser extent, to paralyze what is truly the competitive process.

DBx: Yes.

In the market, entrepreneurs and firms profit only by discovering ways to deliver more satisfaction to consumers and successfully acting on these discoveries. Economic profit is never extracted; it’s always created by actually improving consumer welfare. Furthermore – and happily – the overwhelming bulk of the benefits of entrepreneurial success are eventually enjoyed by consumers; the entrepreneurs who create these benefits get only a tiny fraction of them.