The capitalist and the entrepreneur : essays on organizations and markets

262 Pages·2010·41.506 MB·English

by  Peter G Klein, Ludwig Von Mises Institute

e Capitalist and the Entrepreneur

e Capitalist and the Entrepreneur
Essays on Organizations and Markets
Peter G. Klein
Copyright©2010bytheLudwigvonMisesInstitute
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e entrepreneur hires the technicians, i.e., people who have the
ability and the skill to perform definite kinds and quantities of
work. e class of technicians includes the great inventors, the
champions in the field of applied science, the constructors and
designers as well as the performers of the most simple tasks. e
entrepreneurjoinstheirranksasfarashehimselftakespartinthe
technical execution of his entrepreneurial plans. e technician
contributes his own toil and trouble; but it is the entrepreneur
quaentrepreneurwhodirectshislabortowarddefinitegoals. And
the entrepreneur himself acts as a mandatary, as it were, of the
consumers.
—LudwigvonMises,HumanAction(1949),p.300

Contents
ForewordbyDougFrench iii
Introduction vii
1 EconomicCalculationandtheLimitsofOrganization 1
eTextbookeoryoftheFirm . . . . . . . . . . . . . . . 3
CoaseandTransactionCosts . . . . . . . . . . . . . . . . . . 4
EconomicCalculationandtheLimitstoFirmSize . . . . . . . 5
AlternativeAustrianApproaches . . . . . . . . . . . . . . . . 18
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2 EntrepreneurshipandCorporateGovernance 23
LimitsoftheStandardApproachtotheFirm . . . . . . . . . 24
TwoAlternativePerspectives . . . . . . . . . . . . . . . . . . 25
eContractualApproach . . . . . . . . . . . . . . . . . . . 27
BuildingBlocksofanAustrianeoryoftheFirm . . . . . . . 28
CapitalMarkets . . . . . . . . . . . . . . . . . . . . . . . . 35
TowardanAustrianeoryofCorporateGovernance . . . . . 37
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3 DoEntrepreneursMakePredictableMistakes? 49
Entrepreneurship,Profit,andLoss . . . . . . . . . . . . . . . 54
Mergers,Sell-offs,andEfficiency: eoryandEvidence . . . . 57
i
ii 
AreDivestituresPredictable? EvidencefromaDurationStudy . 60
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4 eEntrepreneurialOrganizationofHeterogeneousCapital 67
Entrepreneurship,Judgment,andAssetOwnership . . . . . . 69
CapitaleoryandtheeoryoftheFirm . . . . . . . . . . 71
eAttributesApproachtoCapitalHeterogeneity . . . . . . . 75
OrganizingHeterogeneousCapital . . . . . . . . . . . . . . . 80
ConcludingDiscussion . . . . . . . . . . . . . . . . . . . . 87
5 OpportunityDiscoveryandEntrepreneurialAction 93
Entrepreneurship: Occupational,Structural,andFunctional
Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . 95
EntrepreneurshipasOpportunityIdentification . . . . . . . . 99
EntrepreneurialAction,HeterogeneousCapital,andEconomic
Organization . . . . . . . . . . . . . . . . . . . . . . . . 109
ApplicationsofEntrepreneurialAction . . . . . . . . . . . . . 113
SummaryandConclusions . . . . . . . . . . . . . . . . . . . 116
6 Risk,Uncertainty,andEconomicOrganization 117
Knight,Mises,andMisesonProbability . . . . . . . . . . . . 118
UncertaintyandtheEntrepreneur . . . . . . . . . . . . . . . 121
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
7 PriceeoryandAustrianEconomics 125
CentralemesofAustrianEconomicsBefore1974 . . . . . . 129
EquilibriuminAustrianPriceeory . . . . . . . . . . . . . 135
Knowledge,Expectations,andtheConvergencetoEquilibrium 139
ANewWayForwardforAustrianEconomics: DevelopingAus-
trianPriceeory . . . . . . . . . . . . . . . . . . . . . 150
8 Commentary 153
A GovernmentDidInventtheInternet,ButtheMarketMade
itGlorious . . . . . . . . . . . . . . . . . . . . . . . . . 153
B Networks,SocialProduction,andPrivateProperty . . . . . 157
C WhyIntellectualsStillSupportSocialism . . . . . . . . . . 162
D ManagementeoryandtheBusinessCycle . . . . . . . . 169
E MengertheRevolutionary . . . . . . . . . . . . . . . . . 171
F HayektheInnovator . . . . . . . . . . . . . . . . . . . . 175
G WilliamsonandtheAustrians . . . . . . . . . . . . . . . 187