This article critiques the conventional Austrian conception of entrepreneurship as a purely equilibrating force driving markets toward a final state of rest. Contrary to viewing entrepreneurship as a response to exogenous shifts in consumer preferences, resource availability, and technological possibilities, I argue that entrepreneurial action itself generates endogenous changes in these variables through profit-seeking behavior. Moreover, as entrepreneurs respond to perceived profit opportunities, they generate new knowledge and uncertainty for one another, inevitably disrupting existing plans and expectations. Rather than systematically eliminating ignorance and profit opportunities while driving the economy toward general equilibrium, entrepreneurship generates the very alterations in the economic data for which it has cause to respond. These alterations provoke further entrepreneurial adjustments, and so on in a continuous, self-reinforcing cycle of disequilibrium. Ultimately, I argue that Austrians should abandon the use of the evenly rotating economy as a theoretical end-state and embrace a more open-ended view of the market as an endless, self-perpetuating process of mutual adjustment and readjustment, coordinated via institutions.
John R. Temming (Tue,) studied this question.