While I was out finishing my Christmas shopping on Saturday, I couldn’t help but think a little bit about economics. I know I am strange, but it is what I am majoring in and what I’ve been studying these past three semesters at Hillsdale, and I am not very successful at turning my mind off (not that I’d ever want to…) More specifically, the work of Israel Kirzner. I read quite a bit of Kirzner in Austrian Economics I with Dr. Steele this past semester, so I thought I’d look at the world immediately around me through the lens of his work. The result? Shopping as a learning and discovery process.
Kirzner’s best work, in my opinion, is in characterizing the role and actions of the entrepreneur in the marketplace, a place which he viewed as in a constant state of disequilibrium. Entrepreneurs, by staying alert, learning, and discovering profit opportunities, tend to systematically move the market closer to equilibrium and erode ignorance that exists.
How does this relate to shopping?
I went shopping on Saturday not knowing what I was going to buy. I didn’t even have an idea. I was sheerly ignorant of all of the potential profit opportunities around me. All I needed was to stay alert to those opportunities the best I could and hope to stumble upon a profit opportunity and take advantage of it. I was, at least in my mind, a Kirznerian shopping entrepreneur, stumbling upon unexploited gains, reap the benefits, and add value to them as Christmas gifts to my loved ones. While shopping, I experienced first-hand the inherent “surprise element” (as Kirzner calls it) in the discovery process. I never knew the specific items I purchased existed, and there was no way I could search for them. I was in a state of sheer ignorance regarding their existence. Yet, due to the awareness of my cousin and me, I noticed the “$20 bills on the sidewalk” and “picked them up.” In the process, I was not only able to clear up a fraction of my ignorance and learn about shopping profit opportunities, but I had a good time engaging in it. If you aren’t all that keen on shopping and you are economically inclined, try thinking about it like this. It made my day a lot more enjoyable. (Okay, I know I am a little odd, but whatever works, you know?)
I am glad the market is in disequilibrium and that individuals do not have perfect knowledge of all possible trade opportunities. It allows for all sorts of interesting things to happen.
I encourage you to read a paper by Kirzner on entrepreneurial discovery and competition. You won’t regret it.