Abstract
This paper criticizes Kirzner's use of the finders-keepers ethic to justify entrepreneurial profit. It does so by pursuing two lines of argumentation. First, Kirzner's defense of the justice of entrepreneurial profit is based upon treating the wage-for-labor-time exchange as legitimate. There are good reasons for doubting the justice of the wage-labor exchange. The paper argues that the profits earned by a capitalist firm employing wage-labor can not be considered to be just if we accept the juridical principle of imputation. The juridical principle of imputation asserts that people should be held legally responsible for the actions and results of the actions for which they are factually responsible. If we consider hired human beings always to be responsible agents, as is true in David Ellerman's (1992) rendition of the labor theory of property, Kirzner's defense of entrepreneurial profit generated in a capitalist enterprise is weakened. Second, the paper criticizes Kirzner's thesis that in a market economy everyone has, in principle, an equal opportunity to be an entrepreneur directing a productive enterprise or to be an entrepreneur engaging in speculation. Kirzner reaches this conclusion because he believes that credit markets in a free economy do not systematically discriminate amongst types of borrowers. This conclusion has been called into question by credit rationing models demonstrating that asset-poor individuals can be systematically denied access to loans. The credit rationing literature erodes the underpinnings of Kirzner's application of the finders-keepers ethic to the evaluation of entrepreneurial profit earned through speculation or productive creativity because it implies that all individuals do not in principle have an equal opportunity to be an entrepreneur.
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Burczak, T. A Critique of Kirzner's Finders-Keepers Defense of Profit. The Review of Austrian Economics 15, 75–90 (2002). https://doi.org/10.1023/A:1013258222155
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DOI: https://doi.org/10.1023/A:1013258222155