Who Were the Sea Peoples?

Back to Kirzner, after knocking off two other reviews and an essay. He writes: "Since individuals obviously differ in their entrepreneurial alertness, it is clear that opportunities for social improvement will tend to be exploited most fruitfully if institutional arrangements can be patterned so as to translate such opportunities into opportunities that will be encountered by those whose entrepreneurial alertness is the most acute, the most sensitive, and the most accurate." ("Knowing about Knowledge," Competition, Economic Planning, and the Knowledge Problem , p. 216) But what entrepreneurial alertness is alert to , per Kirzner, is profit opportunities, not "opportunities for social improvement." Now, one could protest that those opportunities are the same thing, but then what about an entrepreneur who is alert to the fact that the Internet offers a "better" way to deliver rape-fantasy videos to those who are titillated by the idea of ra...

As mentioned in a previous post , Israel Kirzner distinguishes between Type A and Type B knowledge problems. To quote that post: Type A problems involve undue optimism, and are self-correcting: if I think I can sell my programming services for $1 million per hour, I surely will be disappointed, and, if wise, I will lower my price. My very attempt to act on my over-optimistic beliefs reveals their falsity. Type B problems, on the other hand, involve undue pessimism, and are  not  self-correcting. I may believe that my current boss, who is paying me $50 per hour, is the best employer I can find. But, unbeknownst to me, just down the block is someone who would happily pay me $100 per hour,  if he knew of my existence . And I would happily go work for him,  if I knew of his . For type B problems to be "corrected" requires entrepreneurial action, perhaps, say, a job placement firm that will alert both the potential new employer and me to each other's presence in t...

It is really something how often I see articles proffering "financial advice" that "reveal" some well known fact as a source of "profit." For instance, I recently saw an article (I'm not going to go hunt for it: you can easily find one like it yourself) saying that houses are a good investment "because of the mortgage interest tax deduction." But the mortgage interest tax deduction has existed for many years, and is hardly a secret. Thus, whatever benefit it creates is already fully accounted for in the price of real estate, so that, on average, real estate will just return the ordinary return on capital invested: real estate costs more than it would have without that deduction, and just enough more to bring its return on investment into line with all other assets. (And I'm not here claiming that markets are always and everywhere in equilibrium: but I do think markets work well enough that no disequilibrium is going to last for de...