Kirzner defines economics as the reconciliation of conflicting ends given the existence of inescapable scarcity (1960)

Israel M. Kirzner

The Austrian economist Israel Kirzner (b. 1930) argues that to understand economics as the investigation of a particular aspect of society, such as wealth or welfare, is mistaken. Rather it is the study of much more general and abstract matters such as conflicting ends and the inescapable scarcity of means:

Fraser has classified definitions of economics into Type A definitions and Type B definitions. Type A definitions consider economics as investigating a particular department of affairs, while Type B definitions see it as concerned with a particular aspect of affairs in general. The specific department singled out by Type A definitions has usually been wealth or material welfare. The aspect referred to in Type B definitions is the constraint that social phenomena uniformly reveal in the necessity to reconcile numerous conflicting ends under the shadow of an inescapable scarcity of means….

[In recent decades there has been a] trend away from the association of economics with specific “ends” or a specific department of human affairs. In this development the work of [Lionel] Robbins has been consistently pursued to what appears to the writer to be the most adequate solution of the problem…. [T]he contributions of several eminent economists, including Mises and Knight… [called the praxeological outlook]… has a significance that, in the writer’s opinion, has not been sufficiently recognized because it has not yet been brought into historical perspective.

2010 is the 50th anniversary of the publication of this path-breaking book by Israel Kirzner on The Economic point of View (1960). Kirzner was a student of the great Austrian economist Ludwig von Mises and he brings to the study of what economics actually is a much needed historical perspective. By examining the evolution of what economists thought they were studying he is able to show what was far too often a certain narrowness of perspective, focusing on a single issue such as wealth, trade, or welfare. The great insight of the Lionel Robbins in England and Ludwig von Mises in Austria and then America was the need to make the discipline of economics much more abstract and general by focusing on the nature of human action itself in order to understand the deeper reasons for exchange in a world of inevitable scarcity.