The Economic Point of View: An Essay in the History of Economic Thought

This book is the PHD dissertation of Israel Kirzner, the most important Austrian economist of the second half of the 20th century. Kirzner's dissertation is about the evolution of the concept of economics that economists held through the history of economic thought. He starts with the conceptions of the classical economists of economics as an science of wealth, and gradually progresses to reach the cutting edge in the methodological understanding of economics (by his point of view writing in the late 50's) as the science of Human Action, articulated in its best and most complete form by Mises in his Human Action. The book is about the history of economic thought on most fundamental methodological problems that faced and currently face the science of economics, about the very meaning of economics as an field of research. Highly recommended for someone who wishes to focus on a deeper study of Austrian economics. Also, the book includes the debate between Gary Becker and Kirzner about the consequences of irrationality for economic theory. Becker defends the point of view that economics doesn't need to assume rational agents to yield the most important results of price theory. Kirzner them shows the importance of rationality not for the determination of the equilibrium allocations of the market but for the process of reaching the economic equilibrium: agents need to be rational to learn about the situation of the market and adjust their plans in order to generate tendencies towards coordination of plans, and therefore, to reach the equilibrium.

Certain thinkers in a field rise far and above all others in their field to grant new ideas. "The Economic Point of View: The Collected Works of Israel M. Kirzner" is the collected essays of Kirzner, an Austrian economist who is highly revered in scholarly circles that discuss economics. Here, his writings lay out his beliefs and ideas with much evidence on how he believes the world of money works in the modern era. Drawing on debates Kirzner engaged in and other sources, "The Economic Point of View" is an intellectual and educational read that belongs on any economics research shelf.

"The Economic Point of View" is Kirzner's 1960 doctoral dissertation under the guidance of the Prof. Ludwig von Mises (Austrian School of Economics). As Mises noted in his Foreward: "It is a very valuable contribution to the history of ideas, describing the march of economics from a science of wealth to a science of human action....He follow(s) the sober methods of the best historians of economic theories, Bohm-Bawerk and Edwin Cannan. Every economist...will read with great profit Doctor Kirzner's analyses, especially his treatment of the famous discussion between Benedetto Croce and Vilfredo Pareto or the critical examination of the ideas of Max Weber and Lionel Robbins." Chapter contents include: The multitude of economic points of view; The emergence of political economy as the science of wealth; The Science of Avarice: Getting the most for the least; Economics, the Market and the Division of Labor; Money as the measuring rod; The economics of Prof. Robbins; The nature of economic science and the significance of macroeconomics; The sciences of Human Action; The emergence of the Praxeological view of economics; amongst others. A libertarian-economics classic. In 2009 the "Liberty Fund Inc." included this book in its "The Collected Works of Israel M. Kirzner" series. Kirzner was born in 1930.

The reprinting of this book is long overdue. The Economic Point of View explains the difference between economizing and action. As Kirzner puts it "Economizing consists in the allocation of scarce resources among competing ends. Acting, in the praxeological sense, consists in selecting a pattern of behavior designed to further the actor's purposes". The main points in this book are subtle enough to have been overlooked by nearly all modern economists. The Economic Point of View is important not only as a history of economic thought, but as an explanation of where our thinking about economics went wrong. Lionel Robbins shaped modern economics with his idea that economics is about choosing between means of attaining given ends. The simplicity of Robbins' conception of economics makes it persuasive. The idea that we must choose between ends due to scarcity seems so obvious that it is hard to imagine fault with this idea. Mises taught Kirzner well enough to see the weaknesses with the Robbinsian conception of economics. The dominance of Robbins type economics has led economic theory to a number of dead ends. Economists came to think only in terms of optimization problems, while ignoring real market processes driven by human action. Given that economics drifted into further greater error after the publication of The Economic Point of View, one could judge this book a failure. Such a judgment would, however, be unfair. Kirzner explains the importance of the idea of action, as opposed to economizing, in a relatively clear and concise manner (as compared to Mises). Kirzner succeeded both in explaining the importance of the action principle and the shortcomings of the economizing principle. The failure of many to appreciate (or even notice) important ideas is not the fault of the messenger. The ideas in this book are important. Anyone interested in understanding the fundamentals of economic science should read this book, along with Carl Menger's 'Principles of Economics' and Buchanan's 'Cost and Choice' and 'What should Economists do?'.