Review of Austrian Economics, 11: 5–17 (1999)
1999 Kluwer Academic Publishers
Creativity and/or Alertness: A Reconsideration
of the Schumpeterian Entrepreneur
ISRAEL M. KIRZNER
he purpose of this paper is to reconsider the difference between Schumpeter’s
portrayal of the entrepreneurial role, and my own earlier (1969, 1973) por-
trayal of that same role.
In 1969 and in 1973, in the course of developing my
own understanding of the entrepreneurial character of the competitive, equili-
brative market process, I emphasized these differences as I then saw them. Schumpeter’s
entrepreneur, I pointed out, was essentially disruptive, destroying the pre-existing state of
equilibrium. My entrepreneur, on the other hand, was responsible for the tendency through
which initial conditions of disequilibrium come systematically to be displaced by equi-
librative market competition. The outcome of the present reconsideration will be, not a
thoroughgoing “reconciliation” of these two conceptions of the entrepreneurial role—I still
believe that these views are, at least in part, contrasting ones—but a clearer understanding
of how each of these apparently conﬂicting views can be seen as plausible and realistic; and
how each can usefully advance economic understanding (of respectively different aspects
of the capitalist economy).
The central theme of this reconsideration can be expressed in the following four propo-
1. For understanding the psychological proﬁle typical of the real-world entrepreneur as we
know him, Schumpeter’s portrayal is valid and accurate.
2. For understanding the “creative destruction” which Schumpeter sees as the central and
distinguishing feature of the capitalist system, Schumpeter’s portrayal is valid and
essential; to the extent that policy objectives include the stimulation of such creative
destruction, careful attention will indeed have to be paid to that Schumpeterian psycho-
logical proﬁle to which we have referred.
3. For understanding the equilibrative tendency of markets in general, my own view of the
entrepreneur as alert to opportunities (created by, or able to be created by, independently-
initiated changes), is valid and signiﬁcant.
4. To see the entrepreneurial role of a real-world entrepreneur as essentially that of being
“merely” alert to opportunities created (or able to be created) by independently-initiated
Although the objective of this paper is to throw light on the nature of the entrepreneurial role (rather than to
clarify what this writer “really meant” in earlier, almost forgotten writings), it does focus distressingly abundantly,
upon some of that earlier work. I can only apologize for this.