interesting hypotheses about the Soviet economy being a rent seeking rather than a planned
economy—that can eventually be tested against real-world Soviet data as they emerge. The
application of modern political economy to explain the problems of transition has brought
together the “old” and “new” economic specialists on the former Soviet Union. I am par-
ticularly pleased that Boettke, unlike others, has taken the time to examine the Soviet past
and in particular question the stereotypes of the Soviet administrative-command economy
that Soviet specialists have been too willing to accept.
Paul R. Gregory
Professor of Economics
University of Houston
The Origin and Evolution of New Businesses by Amar V. Bhid´e.
Professor Amar V. Bhid´e’s book, The Origin and Evolution of New Businesses, is a breath
of fresh air in today’s world of economics. Perhaps because it doesn’t pretend to be a book
on the economics of the ﬁrm, but rather a systematic, multi-disciplinary research on the
subject of entrepreneurship and the emergence and evolution of businesses. It should appeal
to Austrian economists and others who don’t ﬁnd that mainstream ﬁrm theory adequately
explains the emergence and growth of organizations.
Bhid´e’s book is about understanding why and how distinctive ﬁrm capabilities emerge.
It is about the emergence of organizations in an open-ended environment. It relates to
entrepreneurs, their necessary skills and psychological qualities, the market environment
in which businesses emerge and grow (e.g. availability of capital, business opportunities)
and the critical strategies that entrepreneurs usually adopt to turn a business into a long-
lived corporation. To a large extent, Bhid´e shares this research program with many market
process theorists such as Nicola¨ı Foss, Stavros Ioannides, Peter Klein, Richard Langlois,
Peter Lewin and the present author.
The book is divided into three sections. The ﬁrst two treat the nature of start-ups and the
evolution of businesses and the last one deals with economics and with policy issues that
can be inferred from the ﬁrst two chapters.
Some economists might be put off by Bhid´e’s methodology: he bases his work mostly
on case studies realized by his Harvard students and himself, as well as insights from the
modern theory of the ﬁrm and industrial organization. He could of course fall into the
tendency to try to induce general statements from empirical cases (however numerous they
are), but I do not think he does.
In some ways, Bhid´e’s approach is akin to comparative institutional/historical analysis,
which some economists, such as Douglas North and Mancur Olson, have used to explain
economic growth. Bhid´e claims that minute and detailed studies of real ﬁrms may help