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Gordon Mortensen（b.1938 United States)

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The meaning of market process: essays in the development of modern Austrian economics

But the market process view that we have articulated points to a far more fundamental feature of freedom, a feature which philosophers have always under-stood but which economists, under the blinders imposed by equilibrium theory, seem to have lost sight of. This feature is that the free individual has the freedom to decide what it is that he sees. He is free to make his own discoveries (and, of course, to make his own disastrous entrepreneurial mistakes).

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The existence of unknown ignorance manifests itself in markets as unnoticed opportunities for pure profits. Such opportunities attract the alertness of entrepreneurs.

It is the series of discoveries stimulated by such alertness that constitutes the market process. What the market process achieves, then, is systematic co-ordination of dispersed pieces of information available - but languishing undreamed of - throughout the economy. It turns out, then, that individual liberty is not merely one element.

It turns out, then, that individual liberty is not merely one element in the definition of a market economy. It turns out that individual liberty is that ingredient in that definition upon which the success of the market process depends.

Individual liberty is not a circumstance in spite of which markets work; it is the crucial circumstance which permits the market process to work. All this leads one to add several observations concerning the meaning of individual liberty.

The market process which we have described depends, we have seen, on individual alertness

Kirzner

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