he entrepreneur simulates a stipulated subconscious process of spontaneous alertness to price discrepancies. The spontaneous discoveries are assumed to be followed by behavior that causes the price discrepancies to disappear (Kirzner, 1990,67).
Both of these critics are in the Austrian school of entrepreneurial theory, which takes its basis on the writings of Schumpeter (1911, 1949, 1954), who saw entrepreneurship in purely economic terms.
As Schumpeter saw it, the entrepreneur is a creation (or creator) of the pure market economy, which of course is an abstraction and used by economists as a framework for argument.
What can be observed, however, is capitalism, and some aspects of the pure market economy do exist -- at least in theory under capitalism.
Schumepeter believed that the strength of the American economy was the firm belief that industry, if left alone (laissez-faire) grows and prospers through a free market economy and provides requirements for its citizens in addition to providing enough for export (Schumpeter, 1911).
However, many theorists like to refer to a "pure market economy" rather than a "free market economy" (which is an ideal state that is characterized by individuals having ownership rights to all the goods or services they produce or acquire in exchange).
The theoretical underpinning (critical to any discussion of entrepreneurship) is summarized thus:
* There are no forces exerted on any individual, who is free to produce as much as the market will bear (Schumpeter, 1911).
* No such thing as trade barriers exists in the pure market theory economy (Johnson, 1993).
* All wants are satisfied indirectly by means of money (Johnson, 1993).
* There is no self-production or barter (Schumpeter, 1911).
* There is a great deal of specialization, related to the reasons why individuals would choose to satisfy their wants only indirectly by using money (Schumpeter, 1954).
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