ABSTRACT
Truly original Austrian contributions to the theory of entrepreneurship began with Ludwig von Mises’ 1940 Nationalokonomie. This chapter presents the new subjectivist theory of entrepreneurship in summary form. It discusses and assesses J. A. Schumpeter’s theory and strongly argues that view and aims to maintain that it threatens to undermine Mises’ most important contribution to economic theory. The ‘function’ of entrepreneurship embodies all that can be deduced about how time and uncertainty are relevant to the choices to identify and use factors of production to satisfy consumers’ wants. The chapter argues that the highest point in our understanding of entrepreneurship was achieved when entrepreneurship came to be associated with the distinctly human part of human action in the market economy. It focuses mainly on I. M. Kirzner’s idea of entrepreneurship as alertness. Alertness leads individuals to make discoveries of information that is valuable in the satisfaction of wants.
