Towards an Austrian Perspective on the Firm

Towards an Austrian Perspective on the Firm Review of Austrian Economics, 11: 77–97 (1999) ° c 1999 Kluwer Academic Publishers STAVROS IOANNIDES ne of the distinguishing characteristics of Austrian economics has always been its concern with the role of institutions in economic activity. To this day, however, Austrian ideas have remained largely marginal relative to the rising school of New Institutional Economics. More specifically, as Loasby (1989), Langlois (1992) and Foss (1994, 1996) have noted, Austrian economists have never at- tempted to produce an Austrian theory of the firm. The purpose of the paper is to explore what such an Austrian perspective on the firm would have to look like, in order to be acceptable both as “Austrian” and as a “theory of the firm”. First of all, such an Austrian perspective must be capable of describing the firm as an institution that is created through the entrepreneurial action of individuals; an action which is subjectively motivated and carried out in conditions of radical uncertainty and ignorance. Taking Israel Kirzner’s theory of entrepreneurship as the starting point of our analysis, we will attempt to develop a theory of the firm on the basis of Kirzner’s notion of entrepreneurial behavior. Secondly, to count as a “theory of http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Review of Austrian Economics Springer Journals

Towards an Austrian Perspective on the Firm

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Publisher
Springer Journals
Copyright
Copyright © 1999 by Kluwer Academic Publishers
Subject
Economics; Public Finance; Political Science; History of Economic Thought/Methodology
ISSN
0889-3047
eISSN
1573-7128
D.O.I.
10.1023/A:1007728107685
Publisher site
See Article on Publisher Site

Abstract

Review of Austrian Economics, 11: 77–97 (1999) ° c 1999 Kluwer Academic Publishers STAVROS IOANNIDES ne of the distinguishing characteristics of Austrian economics has always been its concern with the role of institutions in economic activity. To this day, however, Austrian ideas have remained largely marginal relative to the rising school of New Institutional Economics. More specifically, as Loasby (1989), Langlois (1992) and Foss (1994, 1996) have noted, Austrian economists have never at- tempted to produce an Austrian theory of the firm. The purpose of the paper is to explore what such an Austrian perspective on the firm would have to look like, in order to be acceptable both as “Austrian” and as a “theory of the firm”. First of all, such an Austrian perspective must be capable of describing the firm as an institution that is created through the entrepreneurial action of individuals; an action which is subjectively motivated and carried out in conditions of radical uncertainty and ignorance. Taking Israel Kirzner’s theory of entrepreneurship as the starting point of our analysis, we will attempt to develop a theory of the firm on the basis of Kirzner’s notion of entrepreneurial behavior. Secondly, to count as a “theory of

Journal

The Review of Austrian EconomicsSpringer Journals

Published: Sep 30, 2004

References

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