In one of the sessions of the one-day colloquium on Harold Demsetz, moderator Harry DeAngelo asked Joe Kalt, Bob Topel, and me to reminisce about Harold as a person and also about his contributions to us and to economics.
In response to one of Harry DeAngelo’s questions (at the 3:07:00 point,) Joe Kalt answered that Harold viewed competition as a process rather than as an equilibrium. I totally agree.
I do want to add two points, though. First, I got that view more from Ben Klein’s Industrial Organization class than from Harold’s. The second point is one that Ken Elzinga of the University of Virginia made to me in a side conversation after that session: namely, that even though it’s true that Harold pushed that view, the economists who should get credit for it are the Austrian economists. I’m thinking here of contemporaries of Harold such as Israel Kirzner. But you can also find it in earlier works of Austrians. Joseph Schumpeter, who was Austrian, but sometimes is not thought of as a member of the Austrian School, laid out that view beautifully in his Capitalism, Socialism, and Democracy. But you can also find the idea in the late 19th century work of Carl Menger.
Incidentally, if I recall correctly, Ben Klein had us purchase Israel Kirzner’s Competition and Entrepreneurship, a book in which Kirzner lays out the view of competition as a process. Ben was very hung-ho on that book.