Market Theory and the Price System (2011)

The second volume in Liberty Fund’s The Collected Works of Israel M. Kirzner series, Market Theory and the Price System was published in 1963 as Kirzner’s only textbook. The basic aim of Market Theory is to utilize the tools of economic reasoning to explain the market process. The unique framework Kirzner develops for microeconomic analysis, following Mises and Hayek, examines errors in decision-making, entrepreneurial profit, and competition as a process of discovery and learning.

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Citation

Market Theory and the Price System. Edited and with an Introduction by Peter J. Boettke and Frédéric Sautet (Indianapolis: Liberty Fund, 2011).

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Friedrich August von Hayek (Author)

Kirzner utilized Mises' work on human action in attempting to solve the Hayekian problem of social coordination that results in equilibrium.
Murray N. Rothbard (Author)

Kirzner worked with Rothbard on The Economics of Ludwig von Mises: Toward a Critical Reappraisal. Rothbard is a fellow contributor to the Austrian School of Economics in America.
Frank A. Fetter (Author)

Fetter was the United States leader of the early Austrian School of Economics. Fetter is remembered for his work on business monopoly and his book Capital, Interest, and Rent.
Ludwig von Mises (Author)

Mises mentored Kirzner, his Ph.D. student, who helped advance the Austrian School of Economics in America with his work on entrepreneurship and the coordination of the market.

Key Quotes

Economics

In a predominantly free society, individuals are in most respects at liberty to act as they choose. That is, in such a society an individual is generally at liberty to take advantage of any opportunity (as he perceives the existence of such an opportunity) in order to improve his position (as he…

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Critical Responses

Journal Article

Oskar Lange’s Theory of Socialist Planning

Paul Craig Roberts

Paul Craig Roberts spells out Oskar Lange’s socialist planning theory where competition of the market would be mimicked by a central planning board. Originally, Lange believed this system could effectively act like a market even with the planning board controlling resources.

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Connected Readings

Video

A Conversation with Israel Kirzner

Intellectual Portrait Series

In part of the Intellectual Portrait Series, Liberty Fund’s conversation with Israel Kirzner from 2000 covers Kirzner’s evaluation of Austrian Economics and its effect on future economic ideas.

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Econlib Article

Israel Kirzner and the ‘European Miracle’

Rosolino Candela

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Book

The Economics of Ludwig von Mises: Toward a Critical Reappraisal

Israel M. Kirzner

The collected works’ book on Mises economics includes writings from Kirzner who was greatly influenced by Mises, especially in building his Market Theory and the Price System.

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Book

The Foundations of Modern Austrian Economics (1976)

Israel M. Kirzner

The collection of papers from a conference on Austrian Economics in 1974 presents the methodology and the history of the Austrian School of Economics.

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Journal Article

“The Use of Knowledge in Society” (1945)

Friedrich August von Hayek

Hayek’s piece on knowledge relates to and influences Kirzner’s valuation of prices and their influence on the market.

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