Competition and Entrepreneurship is a book with many interesting insights. Kirzner provides a thorough critique of contemporary price theory, theory of entrepreneurship, and the theory of competition. He sees orthodox price theory as explaining the configuration of prices and quantities that satisfied the conditions for equilibrium. He argues that "it is more useful to look to price theory to help understand how the decisions of individual participants in the market interact to generate the market forces which compel changes in prices, outputs, and methods of production and in the allocation of resources". Although Competition and Entrepreneurship is primarily concerned with the operation of the market economy, Kirzner clearly shows that the rediscovery of the entrepreneur must emerge as a step of major importance.
Although Kirzner belongs to the school of Austrian economics, he is independent to the Schumpeterian perspective. In this ground breaking book and building upon the work of Mises and Hayek, whereby competing market participants learn to adjust their plans mutually as prices change, Kirzner provides the greatest advance in economic theory of the second half of the 20th century.
This book culminates the research work of Mises and that of Hayek's during the 1920´s and 1930's respectively. During their research, Hayek and Mises discovered that many points of economic theory previously believed to be well developed in reality were lacking basic theoretical foundations.
Kirzner challenged the conventional view by focusing on the process by which entrepreneurs move market prices towards equilibrium. "The market process is set into motion by the ignorance of the market participants". "Gradually, competition between the entrepreneurs as buyers, and again as sellers, will succeed in communicating to market participants correct estimates of other market participants' eagerness to buy and sell".
Kirzner offers an alternative to both the neoclassical theory of the firm and to the Schumpeterian “creative destruction” perspective of entrepreneurship. He explains the value of an entrepreneur to society. I specifically enjoyed Kirzner's attack of Schumpeter's ideas of entrepreneurship and the argument to it.
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