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The Austrian economist Ludwig Lachmann claimed that Keynes was a lifelong subjectivist. To evaluate this, we start by distinguishing Keynes’ writings on probability theory from his writings on economics. In the General Theory (1936), Keynes’ treatment of expectations provides the basis for Lachmann’s view that Keynes was a subjectivist at heart. In his Treatise on Probability (1921), Keynes refers explicitly to the subjectivism–objectivism divide in probability theory and pins his colors to the objectivist mast. In this essay, we present the objectivist slant in Keynes’ earlier writings on probability theory. Thereafter, we evaluate the criteria Lachmann employed to cast Keynes as a subjectivist.
This chapter provides a comprehensive survey of the contributions of the Austrian school of economics, with specific emphasis on post-WWII developments. We provide a brief…
This chapter provides a comprehensive survey of the contributions of the Austrian school of economics, with specific emphasis on post-WWII developments. We provide a brief history and overview of the original theorists of the Austrian school in order to set the stage for the subsequent development of their ideas by Ludwig von Mises and F. A. Hayek. In discussing the main ideas of Mises and Hayek, we focus on how their work provided the foundations for the modern Austrian school, which included Ludwig Lachmann, Murray Rothbard and Israel Kirzner. These scholars contributed to the Austrian revival in the 1960s and 1970s, which, in turn, set the stage for the emergence of the contemporary Austrian school in the 1980s. We review the contemporary development of the Austrian school and, in doing so, discuss the tensions, alternative paths, and the promising future of Austrian economics.
The paper investigates the role of alliances in periods of industry transformation. It addresses the research question why firms ally in dynamic environments. This takes…
The paper investigates the role of alliances in periods of industry transformation. It addresses the research question why firms ally in dynamic environments. This takes place with an interactive qualitative research design and fieldwork in the changing German health care sector between 2004 and 2007, primarily using qualitative longitudinal data from a focus group panel. From the theoretical side, the resource- and competence-based views have proven useful for alliance research. For our theory-driven investigation we applied the perspective of the competence-based theory of the firm and extended this view by insights from the Austrian School in order to cover developments on multiple levels of analysis in an integrated way.
On an aggregated level we elaborate a taxonomy of three categories reflecting motivations and alliance types against the background of industry transformation:(1)closing resource and competence gaps in so-called “gap-closing alliances,”(2)preparing for unexpected developments in so-called “option networks,” and(3)intending to proactively exert influence on the relevant business environment in so-called “steering alliances” as an alternative way to enhance fit.
For each alliance type, propositions are derived and validated. Summarizing the findings from a meta point of view, a twofold role of collaborative arrangements turned out: On the one hand agents are pushed into cooperation with others in order to manage change and uncertainty in transforming business environments. But on the other hand joint forces themselves act as an accelerator of industry transformation and thereby as a jolt to other economic agents.
Using the framework of the philosophy of science, this chapter explores some basic theoretical issues that must be recognized and addressed in developing theory within the…
Using the framework of the philosophy of science, this chapter explores some basic theoretical issues that must be recognized and addressed in developing theory within the competence perspective. We first develop an overview of resource-based and competence-based research to highlight some fundamental theoretical issues. We then identify a set of basic assumptions for conducting a research program focused on development of a “competence-based theory of the firm.” Working from these basic assumptions, we argue for a shift in the epistemological aim of competence theory development from explaining market success to explaining firm competitiveness. We explain how such a shift theoretical focus and approach can remedy the problem of circular reasoning often observed in resource-based thinking that tries to contribute to the competence literature.
Austrian economics figures centrally in organizational entrepreneurship research. However, researchers have focussed almost entirely on the Austrian school's “gales of…
Austrian economics figures centrally in organizational entrepreneurship research. However, researchers have focussed almost entirely on the Austrian school's “gales of creative destruction” and “entrepreneurial discovery” metaphors, which are rooted in equilibrium assumptions and thus downplay the more subjective and dynamic aspects of entrepreneurship. The purpose of this paper is to question such assumptions, proposing instead a “kaleidic” metaphor drawn from the radical subjectivist strand of Austrian economics. The paper develops, grounds, and enriches the theoretical concepts this metaphor embodies in order to advance the general understanding of entrepreneurship as a radically subjective, disequilibrium phenomenon, as well as the specific knowledge of entrepreneurs’ career and venture experiences. In doing so, the paper highlights creative imagination as a wellspring of entrepreneurship.
The paper employs a case study design to inductively develop the theoretical concepts embodied in the kaleidic metaphor and deductively ground them in the accounts 12 entrepreneurs provided about their career and venture experiences. The paper employs symbolist methods to develop thicker descriptions, generate alternative understandings, and facilitate richer interpretations. Moreover, the paper adopts a reflexive approach in considering the study's implications.
The results suggest the kaleidic metaphor comprises five overarching ideas that resonate, often very strongly, with entrepreneurs.
The study is the first to theoretically develop and empirically ground the ideas the kaleidic metaphor embodies. The paper contributes to a growing body of conceptual work and joins a handful of empirical studies by organizational entrepreneurship scholars using the radical Austrian perspective.
The methodological individualism and subjectivism of the Austrian tradition in economics is often associated with a methodological dualism, i.e. the claim that the nature…
The methodological individualism and subjectivism of the Austrian tradition in economics is often associated with a methodological dualism, i.e. the claim that the nature of its subject matter, namely purposeful and intentional human action, requires economics to adopt a methodology that is fundamentally different from the causal explanatory approach of the natural sciences. This paper critically examines this claim and advocates an alternative, explicitly naturalistic and empiricist outlook at human action, exemplified, in particular, by the research program of evolutionary psychology. It is argued that, within the Austrian tradition, a decidedly naturalistic approach to subjectivism can be found in F. A. Hayek’s work.
The purpose of this paper is to study women’s entrepreneurship from the family-firm context and radical subjectivist (RS) economics. While women’s entrepreneurship is a…
The purpose of this paper is to study women’s entrepreneurship from the family-firm context and radical subjectivist (RS) economics. While women’s entrepreneurship is a long-standing topic of research interest, there have been calls for more theory-oriented research and research which takes context factors in women’s entrepreneurship seriously. The paper responds to this by using an RS’s view of economics as a theoretical lens to consider women’s entrepreneurship in family firms.
The paper briefly reviews the potential of the family-firm context for examining women’s entrepreneurship in a non-reductive fashion, then outlines radical subjectivism (RS). The three main elements of RS’s “entrepreneurial imagination” are explained, then linked with other theories of family-firm behaviour and applied to casework on women entrepreneurs in family firms.
Each element of the entrepreneurial imagination, empathy, modularity and self-organization, generates new research questions which contest previous apparently settled views about women entrepreneurs. Protocols for investigating the questions are suggested. The third element, self-organization, while more difficult to operationalize for empirical testing, suggests how women’s entrepreneurship might generate new industries.
While this is primarily a conceptual study, its case studies invite further exploration of both women entrepreneurs and family firms. The RS perspective could also increase understanding of shared leadership and innovation in family firms. Specific research questions and protocols for investigating them are offered.
Insights from the research have practical implications for entrepreneurship education, for understanding entrepreneurship at the level of society, the firm and the individual.
The importance of both family firms and women entrepreneurs to society makes it important to understand both of them better. The RS perspective can help.
The paper highlights the value of combining attention to entrepreneurial context (family firms) and theory (RS) to reinvigorate some old research questions about women entrepreneurs. The combination of family firms and RS is also novel.
This chapter argues that if Austrian economics is to attain the influence, impact, and esteem enjoyed by comparable traditions, it cannot continue to produce research that…
This chapter argues that if Austrian economics is to attain the influence, impact, and esteem enjoyed by comparable traditions, it cannot continue to produce research that only and always reaches free market conclusions. While the foundational principles of Austrian economics are incompatible with socialism, this does not settle every policy question in favor of laissez-faire. Factors such as historical circumstances and the particularities of local contexts should lead Austrians to take seriously some arguments in favor of government intervention. Freed from its ideological shackles, Austrian economics can provide a powerful toolkit for positive, scientific research addressing the most important questions in contemporary political economy.
Perspective-taking is a social competency to consider the world from other viewpoints (Galinsky, Maddux, Gilin, & White, 2008); it “allows an individual to anticipate the…
Perspective-taking is a social competency to consider the world from other viewpoints (Galinsky, Maddux, Gilin, & White, 2008); it “allows an individual to anticipate the behavior and reactions of others” (Davis, 1983, p. 115) and helps to balance attention between self- and other-interests (Galinsky et al., 2008). Though often used interchangeably with the term empathy – “an other-focused emotional response that allows one person to affectively connect with another” (Galinsky et al., 2008, p. 378), clear evidence exists that demonstrates that the two concepts are distinct (Coke, Batson, & McDavis, 1978; Davis, 1983; Deutch & Madle, 1975; Hoffman, 1977; Oswald, 1996). Although both concepts refer to a social competency of taking another's perspective, empathy tends to be more affective while perspective taking leans toward the cognitive (Galinsky et al., 2008). For example, perspective taking is associated with personality characteristics such as high self-esteem and low neuroticism as opposed to emotionality (Davis, 1983). Perspective-takers are more capable of stepping outside the constraints of their own immediate, biased frames of reference (Moore, 2005) to reduce egocentric perceptions of fairness in competitive contexts (without it being at the expense of their own self-interest; Epley, Caruso, & Bazerman, 2006). Perspective taking has also been shown to be a more valuable strategy than empathy in strategic interactions because it helps negotiators find the necessary balance between competition and cooperation, between self- and other-interest (Galinsky et al., 2008). Achieving such a balance facilitates creative problem-solving (Pruitt & Rubin, 1986). For instance, in negotiation, a focus only on self-interests is associated with excessive aggression and obstinacy whereas a focus only on other-interests encourages excessive concession making to the detriment of one's own outcomes (Galinsky et al., 2008). In contrast, perspective takers have the capacity to uncover underlying interests to generate creative solutions when an obvious deal is not possible (Galinsky et al., 2008). Consequently, the cognitive appreciation of another person's interests is capable of facilitating economically efficient outcomes by acting as a discovery heuristic that reveals hidden problems or solutions and as a tool that enables individuals to capture more value for themselves (Galinsky et al., 2008).
Menger′s Grundsätze is explored; the Aristotelian background of the discourse is probed, as is the problematic image of Menger sketched in the secondary literature as soon as it is confronted with this Aristotelanism and with the subjective value theory and the motif of time, error and uncertainty. The conflicting elements of this picture are pieced together.