Towards an Austrian Theory of the Firm

Towards an Austrian Theory of the Firm 44 DULBECCO AND GARROUSTE production and capital: Bohm-Ba ¨ werk (1889), Hayek (1931, 1939, 1941) Hicks (1970, 1973), Lachmann (1956, 1977). Yet, taking the production structure into account in the analysis of the coordination of economic activities goes hand in hand with the knowledge, that economic agents already possess concerning these very structures. When criticizing the Smithian explanation of economic progress, Menger considers that it results from the increase in knowledge that individuals possess, concerning the relationship between their needs and the well-ordered set of economic goods. Similarly, according to Bohm-Ba ¨ werk, production roundabouts are a direct reflection of human knowledge. Thus, two phenomena are interwoven. On the one hand, sets of spatial and temporal interdependencies exist, which restrict the decisions of the entrepreneurs, while on the other hand, the entrepreneurs must acquire the knowledge of these constraints in order, if possible, to modify them. We are, hence, facing a process characterized by the fact that the individuals’ knowledge of the constraints, as regards the layout of economic activities, affect these constraints, because of the decisions the individuals make. The object of our paper is, therefore, to fuse in the same analytical framework, the Austrian contribution regarding the http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Review of Austrian Economics Springer Journals

Towards an Austrian Theory of the Firm

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Publisher
Kluwer Academic Publishers
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:1007761326292
Publisher site
See Article on Publisher Site

Abstract

44 DULBECCO AND GARROUSTE production and capital: Bohm-Ba ¨ werk (1889), Hayek (1931, 1939, 1941) Hicks (1970, 1973), Lachmann (1956, 1977). Yet, taking the production structure into account in the analysis of the coordination of economic activities goes hand in hand with the knowledge, that economic agents already possess concerning these very structures. When criticizing the Smithian explanation of economic progress, Menger considers that it results from the increase in knowledge that individuals possess, concerning the relationship between their needs and the well-ordered set of economic goods. Similarly, according to Bohm-Ba ¨ werk, production roundabouts are a direct reflection of human knowledge. Thus, two phenomena are interwoven. On the one hand, sets of spatial and temporal interdependencies exist, which restrict the decisions of the entrepreneurs, while on the other hand, the entrepreneurs must acquire the knowledge of these constraints in order, if possible, to modify them. We are, hence, facing a process characterized by the fact that the individuals’ knowledge of the constraints, as regards the layout of economic activities, affect these constraints, because of the decisions the individuals make. The object of our paper is, therefore, to fuse in the same analytical framework, the Austrian contribution regarding the

Journal

The Review of Austrian EconomicsSpringer Journals

Published: Oct 6, 2004

References

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