Israel M. Kirzner

While reading economist (and rabbi) Israel M. Kirzner’s Competition & Entrepreneurship (1973), it occurred to me that his description of what the “pure entrepreneur” does could also be applied to what a good interdisciplinary scholar, such as someone who studies faith and economics, does (or at least aspires to do).

In our world of imperfect knowledge, Kirzner writes,

there are likely to exist, at any given time, a multitude of opportunities that have not yet been taken advantage of. Sellers my have sold for prices lower than the prices which were in fact obtainable…. Buyers may have bought for prices higher than the lowest prices needed to secure what they are buying…. The existence of these opportunities opens up a scope for decision-making that does not depend, in principle, upon Robbinsian [means-end] economizing at all. What our decision maker without means needs to arrive at the best decision is simply to know where these unexploited opportunities exist. All he needs is to discover where buyers have been paying too much and where sellers have been receiving too little and to bridge the gap by offering to buy for a little more and to sell for a little less. To discover these unexploited opportunities requires alertness. Calculation will not help, and economizing and optimizing will not of themselves yield this knowledge.

To simplify, for Kirzner the entrepreneur is an equilibrating force in the market, a contrast of emphasis from the conception of Joseph Schumpeter, where the entrepreneur is a disequilibrating force through creative destruction. Rather, for Kirzner, the entrepreneur is the person who sees the opportunity to buy low and sell high. And I think that is what interdisciplinary scholars do at their best as well.

Now, that might sound like a bad thing to some, but the effect is important: without such a person sellers would keep selling at even lower rates and buyers would keep buying at even higher rates. Thus, the entrepreneur plays a sort of middleman role, connecting information that would otherwise remain municated. As a result of the entrepreneurial tendency to notice such opportunities for profit that arise from imperfect information, resources are actually used more efficiently, bringing market prices closer to the ideal of equilibrium. Where there is equilibrium, to Kirzner, there is no place for the entrepreneur.

Notice also that the entrepreneur is not necessarily an owner or producer. In fact, the specifically entrepreneurial act is one “without means.” The resources and products are those of others, or at least they are independent of the act. But it still serves a crucially important function in the distribution of the benefits of production and resource allocation.

Let’s turn now to interdisciplinary studies. Why? Well, with an oversupply of PhDs, especially in the humanities, scholars often need a way to market themselves as distinct from the other 400 applicants for the same one-year visiting professorship or whatnot.

As William Pannapaker wrote in controversy for the Fall 2012 issue of the Journal of Markets & Morality, “The Chronicle of Higher Education regularly recounts the woes of recent graduates who are underemployed, burdened by debt, and without prospects for any career path besides ongoing contingent teaching or some form of self-employment.” He then adds, “That e — the experience of many, if not most, doctoral recipients — is not reflected by what departments say about themselves to prospective students.”

Having an interdisciplinary focus is one way that scholars facing the bleak reality of that moral failure can make themselves more marketable. So how does it work?

Well, as I’ve already said, I think it works like Kirzner’s entrepreneur. Friedrich Hayek pointed out that even in 1956 the increased specialization of the academy has left the scholarship of many disciplines harmfully insular. He observed that

there is a little too much of a clannish spirit among representatives of recognized specialities, which makes them almost resent an attempt at a serious contribution even from a man in a neighbouring field — although the basic kinship of all our disciplines makes it more than likely that ideas conceived in one field may prove fertile in another.

But that’s where the entrepreneurial outlook provides an opportunity for the alert interdisciplinary scholar. Hayek’s suspicion is right. For example, we may note how the naturalist Charles Darwin was inspired by the economist Robert Malthus’s Principle of Population in formulating his own thesis of survival of the fittest by means of natural selection in his Origin of Species. Darwin had his “aha!” moment because he wasn’t only reading works by other scholars in his own field. It was an interdisciplinary insight.

So basically, the good interdisciplinary scholar buys low and sells high like the entrepreneur, except the buyers and sellers are different disciplines. She sees that where one field may know A, B, and C, scholars there are missing important insights because they do not also know about the X, Y, and Z known to other scholars of a different field, and vice versa.

The interdisciplinary scholar, like Kirzner’s “pure entrepreneur” may even work “without means.” That is, she may not add anything new other than a connection between already existing resources cultivated by others. What she has that others do not is the alertness to see and seize an opportunity for profit in real-world conditions of imperfect information. Yet, just like the entrepreneur, she offers something truly beneficial to the market (the academy) as a whole, enriching both disciplines while herself profiting. It’s a win-win-win situation.

And if that still isn’t enough to land that professor job, well, who says the university is the only place where such interdisciplinary insights are in demand? Such scholars, today more than ever perhaps, may benefit from a more entrepreneurial perspective in their job searches as well.

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For an example of one of my own efforts to bridge the gap between faith and morality on the one hand and economics on the other, see my essay “The Higher Calling of the Dismal Science” in the most recent issue of Religion & Liberty here.