Austrian Perspectives Research Articles

Book Review: "Austrian Perspectives on Entrepreneurship, Strategy, and Organization"

Nicolai Foss, Peter Klein, and Matthew McCaffrey explain convincingly how Austrian ideas play a crucial role in gaining a better understanding of entrepreneurship, strategy, and organization research. The authors review the achievements of Austrian economics in management and propose some potentially fruitful directions for future research in a concise book.

Social innovation and Austrian economics: Exploring the gains from intellectual trade

The Austrian school of economics has played a key contribution toward an improved understanding of the characteristics of economic innovation. Over recent decades the language and concepts of innovation theory has broadened to non-market settings, among other things giving rise to a voluminous literature on “social innovation.” During the same period of time, scholars have increasingly utilised Austrian economic insights to explore the nature of social interaction and the dynamics of social change, delving into matters such as social entrepreneurship, non-price coordination, and social learning. Both social innovation and non-economic Austrian scholarship have largely been conducted independently of each other. The central claim of this paper is that scope exists for meaningful intellectual exchanges between these two sub-branches of social scientific endeavour. An Austrian perspective on social innovation centres upon entrepreneurs using their unique knowledge to create and change social norms and practices, providing micro-level foundations for broader scale social innovations of cultural and institutional character. Social innovation theory assails the limitations of market-state duality by stressing the involvement of non-market, non-state social actors in promulgating social novelties. Austrian perspectives on social theory may also gain from the social-innovation emphasis upon enhancing broad aspects of human well-being.

James M. Buchanan: Neoclassical, Austrian, Neither, or Both?

James McGill Buchanan (1919-2013) received the Nobel Memorial Prize in 1986 for his work in public choice theory, set out in his The Calculus of Consent (1962), co-authored with Gordon Tullock. The Virginia School of Political Economy can be seen as a product of the work of Buchanan and Tullock, along with Ronald Coase, who published his ground-breaking paper on “The Problem of Social Cost” in 1960 while he was at the University of Virginia. This school of thought is generally thought to be in some ill-defined sense allied to the Austrian school of economics, mainly perhaps because of a shared pro-market policy stance. On the other hand, links between Buchanan and neoclassical economists such as Friedman and Stigler are frequently drawn, again probably with the pro-market policy recommendations of each in mind. It is notable that Buchanan, Hayek, and Friedman were all at various times presidents of the Mont Pelerin Society. Yet the differences between neoclassical and Austrian perspectives are profound. It has often been said that the one can be characterized as “equilibrium always” and the other as “equilibrium never”. The case of Buchanan and the Virginia School is therefore extremely interesting for the historian of economic thought. Significant questions are raised about the scope for reconciliation between schools of thought at the most profound levels of methodology and social philosophy. I posit that, allowing for a slight amount of breathing room, James Buchanan’s economic writings are more Austrian than anything else. From his earliest writings to his last publications, Buchanan clearly had an Austrian-leaning approach. Additionally, many of the criticisms he laid out about the economics profession were directed toward the more neoclassical minded among his peers. While the act of criticizing neoclassical economists does not indicate that Buchanan was an Austrian, it does seem to lay to rest any conclusions that he was a neoclassical economist himself.

Rethinking borders of national systems of innovation Austrian perspectives on Korea's internationalization of green technologies

The recent decades have seen a growing rate of international cooperation in science, technology, and innovation (STI) including in the field of green technologies. However, current approaches to national systems of innovation (NSI) have not kept up with this development. International aspects are rather treated as external conditions within which policymakers operate and respond but not influence. This paper tackles this problem by applying a refined NSI concept that includes an international dimension and complements past frameworks by focusing on those Korean government policies, actors, and activities relevant for the internationalization of STI. Austria and Korea have both formulated differing strategies to acquire international leading positions in the field of innovation and the development of green technologies. In the first step, the paper assesses Korea’s international activities within the field of green technologies that transcend national boundaries and establish international connections. The government has still a strong influence on selecting technology areas for strategic funding but our findings show that international STI actors have difficulties in identifying the appropriate point of contact to initiate cooperation or apply for related funding. Second, an external perspective on Korea’s international collaborations in the field of green technologies is offered. Austria has tentatively identified the East Asian country as a second-priority cooperation partner for its future STI internationalization activities. Interviews with Austrian stakeholders in the field of green technologies indicate a high interest in cooperation with Korea that is facilitated by a similar business culture based on personal networks. Moreover, researchers and policymakers referred to a shared need of small countries for intelligent decision-making processes regarding potential cooperation partners abroad. However, in order to enhance awareness, visibility and demand for Korean STI cooperation in European countries, more longterm funding programs featuring a more permanent point of contact should be introduced.

Keynesian and Austrian Perspectives on Crisis, Shock Adjustment, Exchange Rate Regime and (Long-Term) Growth

The 2010/11 European debt crisis has revived the discussion concerning the optimal adjustment strategy in the face of asymmetric shocks. This paper approaches the question from a theoretical perspective by confronting exchange rate based adjustment with crisis adjustment via price and wage cuts. Econometric estimations yield a negative impact of exchange rate flexibility/volatility on growth, which is found to be particularly strong for countries with asymmetric business cycles and during recessions. Price flexibility is found to have a positive impact on growth. Based on these findings we support a further enlargement of the European Monetary Union and recommend more exchange rate stability for the rest of the world.

Keynesian and Austrian Perspectives on Crisis, Shock Adjustment, Exchange Rate Regime and (Long-Term) Growth

The 2010 European debt crisis has revived the discussion concerning the optimum adjustment strategy in the face of asymmetric shocks. Whereas Mundell’s (1961) seminal theory on optimum currency areas suggests depreciation in the face of crisis, the most recent emergence of competitive depreciations, competitive interest rate cuts or currency wars questions the exchange rate as an adjustment tool to asymmetric economic development. This paper approaches the question from a theoretical perspective by confronting exchange rate based adjustment with crisis adjustment via price and wage cuts. Econometric estimations yield a negative impact of exchange rate flexibility/volatility on growth, which is found to be particularly strong for countries with asymmetric business cycles and during recessions. Based on these findings we support a further enlargement of the European Monetary Union and recommend more exchange rate stability for the rest of the world.

Scottish and Austrian Perspectives on Delivering a Master's

This article explores the transition in course delivery from a paper-based format to blended learning, and highlights the role of the virtual learning environment (VLE) in this process. Professional practice in postgraduate programmes in particular is investigated during this transition stage at the University of Dundee (UoD) in Scotland, and the University of Applied Sciences Technikum Wien (UASTW) in Austria. In this transition, UoD is developing and implementing a ‘Master's Framework’ supported by the VLE, ‘MyDundee’, which is built on the Blackboard e-learning platform. Similarly, UASTW is exploiting the Campus Information System (CIS) based on the open-source e-learning platform Moodle. Although the methods used to promote and practise e-learning differ at the two universities, their common aim is to support students' and professionals' learning when face-to-face contact time between students and tutors is significantly reduced. The use of collaborative and peer-assessed tools like e-portfolios, newsletters, discussion forums, Wikis and group puzzles are used as means of satisfying a delivery model which reflects socially constructivist principles of learning.

Markets, Information and Communication. Austrian Perspectives on the Internet Economy

Markets, Information and Communication. Austrian Perspectives on the Internet Economy

The discovery and coordination of resource complements in a dispersed knowledge society

Although knowledge based theories of the firm and capabilities perspectives provide important understanding to the organisation and development of a firm's knowledge, the insights of Austrian economics present a third but neglected approach to knowledge based perspectives. Austrian economics subscribe that the key knowledge problem is how to adapt to unanticipated change when knowledge experiences are dispersed in the market. Through the discovery of resource complements, a conceptual model is developed to explain adaptation in terms of the coordination of diverse knowledge experiences. This conceptual model is drawn from the entrepreneurial behaviours of Austrian economics and strategic network perspectives. This conceptual model is also used to explain the coordination of resource complements by exploiting inter-temporal knowledge experiences. Knowledge based strategies are, thus, developed with this model. Implications of this model to knowledge-based theories are also discussed.

Markets, Information and Communication: Austrian Perspectives on the Internet Economy

Markets, Information and Communication: Austrian Perspectives on the Internet Economy

Subjective Interpretation and Coordination in Two Austrian Perspectives: Schutz’s Phenomenology and Hayek’s Cognitive Psychology

The coordination of human actions in the social world remains a central issue in Austrian economics. This paper explains the actor’s subjective interpretation and coordination in two subjectivist traditions: namely, Schutz’s phenomenology and Hayek’s cognitive psychology. This paper starts with a formulation of Schutz’s notion of mental projection. It then argues that intersubjectivity allows actors’ subjective interpretations to be coordinated in the social world. When the agent’s interpretative framework is disrupted by a novel stimulus, the agent will project action in the future perfect tense and form knowledge surrogate. Through a process of typification, a new stock of knowledge is established which enables the actor to solve new problems in everyday life. The society’s stock of knowledge (or human institutions) which actors share serves as a social coordinator. In terms of Hayek’s cognitive psychology, during the perception process, the human mind can identify and classify events coming from the outside world. If the event and sequent stimulus are repeated, a pattern will begin to register in the mind and become a rule of thumb which facilitates decision-making in complex situations. Given a cognitive pattern, a novel event from outside will create new impulses to the perception process. When the established linkages of the mental map fail to give an adequate account of the current environment, the agent is then in a state of conflicting experience. The result is a gradual reclassification of the linkages and new rules are re-established. In Hayek’s view, institutions or ‘rules of doing things’ are common schemes of behaviour, which simplify the complexity of the world and enable us to operate with a certain degree of predictability. They help to solve coordination problems during social interaction. This paper concludes that Schutzian and Hayekian perspectives on actors’ subjective interpretation and coordination are strikingly compatible and consistent. The two subjectivist contributions can be synthesised into fruitful tools to understand social phenomena.

Foss, N.J. - Klein, P. G. (eds), Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization

Abstract Foss, N.J. - Klein, P. G. (eds), 2002, Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization, Cheltenham, Edward Elgar, ix+320, UK £ 69.00, hardcover, ISBN 1-84064-660-8.

Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization

Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization

Role of competition policy in the US innovation system

US competition policy, with its recent emphasis on encouraging the commercialization of new technological innovations, exhibits the flexibility to embrace new national competitiveness objectives. Competition policy's traditional economic goal, of broadening consumer choice and improving market efficiency, is now extended to encourage continuous innovation (both technological and organizational) in a network-based, global business environment. Antitrust enforcement in recently formed industries exhibiting dynamic innovation requires a new theoretical foundation (utilizing Schumpeterian, evolutionary, Austrian, path-dependence, and resource-based perspectives) to create competition guidelines for agency intervention, as well as remedies that will not interfere with the ‘creative destruction’ that characterizes the innovation process. Copyright , Beech Tree Publishing.

Risk and business cycles: New and old Austrian perspectives

Risk and business cycles: New and old Austrian perspectives

Some austrian perspectives on unintended consequences

Some austrian perspectives on unintended consequences

Some Austrian perspectives on keynesian fiscal policy and the recovery in the thirties

Some Austrian perspectives on keynesian fiscal policy and the recovery in the thirties

The Structure of Ownership and the Theory of the Firm

The separation of ownership from control produces a condition where the interests of owner and of ultimate manager may, and often do, diverge, and where many of the checks which formerly operated to limit the use of power disappear.... In creating these new relationships, the quasi-public corporation may fairly be said to work a revolution. It ... has divided ownership into nominal ownership and the power formerly joined to it. Thereby the corporation has changed the nature of profit-seeking enterprise.1