Alertness, local knowledge, and Johnny Appleseed
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Anderson and Hill argue that property rights entrepreneurs, driven by non-replicable Kirznerian alertness, identify unowned and unpriced attributes of a resource and capture rents to those resources by limiting access to them. I argue that alertness is non-replicable, but it is also not random. Kirzner’s analytical framework emphasizes an individual’s local knowledge and subjective interpretative schema. Incorporating these concepts and emphasizing two types of local knowledge, about social and commercial conditions, explains why some people are alert to profit opportunities and others are not. This implies that economic restrictions are more detrimental to entrepreneurship than previously understood. I provide evidence by examining Johnny Appleseed’s successful nursery business.
KeywordsProperty rights entrepreneurship Alertness Local knowledge Interpretive schema
JEL ClassificationD23 L26 B25
The author thanks an anonymous referee, Peter Boettke, Stewart Dompe, Josh Hill, Emily Schaeffer, Richard Wagner, Larry H. White, and especially Peter Leeson for helpful comments. All remaining errors are, of course, the author’s own. He gratefully acknowledges generous research support from the Earhart Foundation and the Mercatus Center.
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