Sunday, October 27, 2019

Block vs. Wenzel on the Essence of Entrepreneurship

Dr. Walter Block has posted at LRC an email exchange between Dr. Block and me that was prompted by an email to both of us by Dr. Michael Edelstein.

The full exchange is here: Rothbard versus Kirzner on Entrepreneurship.

This topic is important enough that I am going to put out a more formal paper on the differences between Dr. Murray Rothbard's view of entrepreneurship and Dr. Israel Kirzner's view.

When it comes to economics, I am highly influenced by Rothbard across the board except when it comes to entrepreneurship. I am in the Kirzerian camp.

During our exchange, Walter references an essay by Rothbard, Professor Kirzner on Entrepreneurship. He calls it, "Rothbard’s devastating critique of Kirzner."

I read that essay a long time ago and I can't think of a Rothbard essay where I marked the piece up with so much disagreement. (In fact, I can't think of any other Rothbard essay in economics that I have marked up with general disagreement).

Stay tuned!



  1. Rothbard says that the Kirzner's entrepreneur risks nothing.

    The entrepreneur has a number of risks, such as his reputation in the event that he fails. If he isn't providing the capital, then he's taking a big risk by bringing in another person. The investor could steal his idea, pay him nothing, then the investor would assume the role of entrepreneur as well. After establishing the business, if the entrepreneur hasn't protected himself legally well enough, the investor might find a way to shut him out of the business.

    Also, even if all goes well when having an investor, the entrepreneur will be ceding significant profits and maybe even overall control of the company. Idiotic interference from an investor might torpedo the whole project while a competitor begins taking advantage of the opportunity.

    1. You would have had a stronger argument AND been able to maintain the Kirznerian perspective logically valid if you had taken my position on the matter in that link (in the comment section).

      The fact is, to say an entrepreneur risks nothing is silly. He risks his time, which is a scarce good. He risks his good will, his reputation, etc.

    2. Yes, this was my point entirely. I'm simply refuting Rothbard's claim that the entrepreneur risks nothing. I missed your post earlier, which summed it up nicely.
      As far as the essence of entrepreneurship, I agree with Kirzner, and I wasn't making any attempt to summarize it here. It's fun to think about because I'm doing it now.