The objections to Kirzner's "alertness" position concerns the catallactic function of entrepreneur, not the "ideal type" of entrepreneur-promoter. It is the latter that is what people think of when they think of Steve Jobs, etc. The entrepreneurial function is much broader, and deals with all human action insofar as it deals with uncertainty. Get rid of the Misesian idea of entrepreneurship and you get rid of the entire Misesian/Rothbardian system of functional distribution. Moreover the dice issue you raise is inappropriate because that is an instance of class probability (risk), whereas entrepreneurship has to do with case probability (uncertainty).The points that Danny makes are important enough that I would like to address them in a full post, so more will view what I consider an important topic.
When you write:
The objections to Kirzner's 'alertness' position concerns the catallactic function of entrepreneur, not the 'ideal type' of entrepreneur-promoter. It is the latter that is what people think of when they think of Steve Jobs, etc.
I'm not sure of your point. I'm saying the key function of an entrepreneur is alertness. The other catallactic functions are just that, other functions. In my view, it is indeed an error to view Steve Jobs etc. as an entrepreneur because of his other skills (such as promotion), that it was his alertness (first to the programming/software design talent of Wozniak) which is why he should be considered an entrepreneur. He could have hired a promoter if he didn't have promotion skills---Madison avenue is filled with such people.
In other words, I am recognizing more functions than you are, if you reject alertness as a separate function.
My problem with risk taking/uncertainty as the focus of entrepreneurship applies to both case and class probabilities, perhaps even more so to case probabilities. In the Kirzenrian view, it is not that entrepreneurs see risks and make bets on case or class probabilities but that they see very little risk, risk that is less than others may envision.
The gentleman I describe here is more like what entrepreneurs are really like in the Kirzenerian sense:
Forgive the leaky metaphor, but they aren't rolling case or class dice. They aren't taking much risk. They are seeing Kirznerian opportunities.
Call them what you will, but these type operators exist. And, as I point out, if you knew the Koch brothers, Sheldon Adelson or Donald Trump, I surmise that it would be hard to spot them taking great risks. They are skilled at seeing opportunity. Perhaps it is because I have advised very wealthy men and have seen them up close that it is easier for me to see them as none risk takers, what they tend to have is Kirznerian alertness, when they make a move, not always, but mostly they are going to win.
The focus of risk taking as part of entrepreneurship comes, as Kirzner points out, from college professors. It is a myth that confuses a lot of youth that want to be entrepreneurs. Entrepreneurship is not as much about taking risks, as it is about spotting opportunities that are right in front of you that are not very risky.
But even here, Danny, your focus on risk is a limited deviation from what most Austrian's see as the problems with Kirzner's view.
The difference between Kirzner's view and that of some other Austrians was best described recently by Joe Salerno:
In his presentation, Klein challenged Israel Kirzner’s influential alertness paradigm of entrepreneurship. Kirzner argues that alertness to and discovery of profit opportunities–conceived as objectively and simultaneously existing differences in the prices of resources and products–is the crux of entrepreneurship. Thus for Kirzner the entrepreneur is essentially an arbitrageur who buys a given good where prices are low and sells the same good where prices are high. He faces no uncertainty, risks no capital, and always profits from his superior alertness to the existing profit opportunity. Foss and Klein propose instead an approach to entrepreneurship based on Frank Knight’s and Ludwig von Mises’s focus on the “judgment” of uncertain future market conditions. Judgment is exercised in the act of investing in and allocating resources to specific time-consuming production processes that are organized and controlled by the entrepreneur until the completion and sale of the product. For Foss and Klein the entrepreneur is therefore a capitalist and owner. The capitalist firm is the organization created by the entrepreneur to facilitate ownership and decision-making control over the productive resource combinations that embody his judgment of future product prices and markets.
While Salerno correctly states that the non-Kirzenrian view ties in capital ownership (where more risk, indeed, does come in---in my view), it is interesting to note, Mises recognized the separate functions of capital and entrepreneurship clearly when he wrote:
When economics employs the same terms it speaks of catallactic categories. The entrepreneurs, capitalists, landowners, workers, and consumers of economic theory are not living men as one meets them in the reality of life and history. They are the embodiment of distinct functions in the market operations.And here is Mises slamming the notion that an entrepreneur needs to be a capitalist:
Let us try to think the imaginary construction of a pure entrepreneur to its ultimate logical consequences. This entrepreneur does not own any capital. The capital required for his entrepreneurial activities is lent to him by the capitalists in the form of money loans. The law, it is true, considers him the proprietor of the various means of production purchased by expanding the sums borrowed. Nevertheless he remains propertyless as the amount of his assets is balanced by his liabilities. If he succeeds, the net profit is his. If he fails, the loss must fall upon the capitalists who have lent him the funds.
As for your charge, Danny, that if you:
Get rid of the Misesian idea of entrepreneurship and you get rid of the entire Misesian/Rothbardian system of functional distribution.It's really hard to understand how it holds any water. Are you saying that in a Misesian/Rothbardian system of functional distribution that entrepreneurs are walking around blindly without alertness? That to me seems to be a prescription for a collapse of a Misesian/Rothbardian system of functional distribution, or almost any other system, rather than the other way around that alertness moves an economy toward functional distribution.