I was reading an interview with George Gilder and while he praised Austrian Economics for talking about the entrepreneur he also had criticism which I hope could be clarified:
“It is enterprise that causes free markets, not free markets that summon enterprise. Adam Smith was wrong in his assertion that the extent of the division of labor is determined by the extent of the market. It is the other way around. The extent of the division of labor – the creativity of entrepreneurs – determines the extent of the market.”
“As I have said, there can be no free markets without free entrepreneurs. Entrepreneurs are not tools of the market, they are creators of new tools. The entrepreneur precedes the market. Without him, there is no market.”
“I always preferred the Austrians for their stress on entrepreneurial creativity, but even the Austrians, beyond Von Mises, fell for the temptation of seeing entrepreneurs as products of “the free market” rather than its creator.”
I know there is a splitt within the Austrian camp when it comes to the entrepreneur so I gues there might be two answers here unless Prof. Herbner has a preference for one theory over the other.