Israel Kirzner’s concept of “alertness” is recast in the language of phenomenological psychology. Our ideas about things are either openended ideas posing no particular problem of choice, “open possibilities”, or alternatives to choose between, “problematic possibilities”. Choice is the process of formulating problematic possibilities; it is the process of reinterpreting one’s situation. The fully formed reinterpretation generates the chosen outcome as a necessary consequence of preferences and perceived constraints. Reinterpretation precedes choice, both logically and temporally. This understanding of alertness helps to clarify Austrian ideas such as the idea that preferences do not exist apart from action.
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