Abstract
The emergence of the knowledge impacts strongly on economic organization; in fact, so strongly that many have argued that the traditional firm will wither, as firm boundaries blur and authority relations break down. Analytically, this may be interpreted as a claim the Coasian firm will break down under the impact of knowledge becoming increasing distributed and controlled by specialists, as discussed by Hayek more than five decades ago. However, this note argues that this conclusion goes too far: The Coasian firm is consistent with Hayekian knowledge conditions. The challenge ahead is to carefully model the changes in economic organization prompted by the knowledge economy. Austrian economics and the modern economics of organization are particularly useful theoretical inputs.
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