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William Baumol is best-known as an academic. He was a prodigious researcher and publisher of texts on microeconomic theory, and a highly regarded educator with roles as head of the Department of Economics at Princeton University, director of the C.V. Starr Center for Applied Economics and director of the Berkley Center for Entrepreneurship and Innovation at New York University. Less well-known were his engagements as a corporate consultant, notably for the telecommunications monopoly AT&T. Baumol’s work as an advisor, expert witness and theorist for AT&T spanned three decades from 1966. His relationship with AT&T arguably forms the context within which we can better understand his work on contestability theory, which he developed with a team of economists working for AT&T’s Bell Telephone Laboratories in the 1970s. Contestability theory was later deployed as a policy tool to justify industry deregulation and even advocate for monopolies and oligopolies on the ground that they were optimally efficient industry structures if potential competitors faced low barriers of entry. Baumol’s intellectual contribution to contestability theory was arguably influenced by the Chicago school and by AT&T’s drive toward the technological integration of telecommunications. Contestability was a rebellion against economic orthodoxies concerning competition and government regulation, and the status quo within AT&T which opposed market competition on the ground that it threatened the technological integration of the Bell system. The outcome was a revolution in industrial organization that would pave the way for the emergence of platform business models incorporating multi-sided and two-sided markets as exemplified by Amazon and Uber.

The purpose of this study is to analyze the growth of unit costs per output in the Finnish police force (2002–2015). Is it higher than the growth of prices in the Finnish economy in general; i.e. higher than the inflation rate? Cost disease theory suggests this to be the case. It says that all labor-intensive, slow-progressive industries suffer from relatively rapidly growing real unit costs and that policing is one among these industries.

The rates of growth of the division-specific unit costs of the police are compared to the inflation rate. Costs and prices are treated as indexed schedules, comparable to each other. The functional divisions under scrutiny are surveillance and emergency operations, criminal investigation, and permits and licenses. The period under analysis is 2002–2015.

The surveillance and emergency operations and criminal investigation divisions, but not the permits and licenses division, suffer from cost disease. Owing to the persistent digitalization efforts in permits and licenses, the physical productivity of the division has been growing at a rapid rate, and both the nominal and the real unit costs per output of the division have been decreasing over time.

Owing to data limitations, use of a proxy was needed to estimate one of the key variables of the study.

The policy significance of the research question is potentially very high. Prior to this study, there was a near total lack of empirical evidence in this area.

What are the value theories used by art economists which can help define the field as a unique research program? We categorize the research program in art economics in Lakatosian terms and find that art economists share a value system around art which is that art contains value beyond that of exchange. This difference introduces a “paradox” of value to be addressed (either implicitly or explicitly) by the art economist in practice, in that mainstream economics assumes value is realized through exchange only. We then survey the literature and find evidence to support this value paradox claim. We also find that the art economics research program does not adequately address the potentiality of the state using art as instrumental value and introduce political economy to factor in a self-interested state using art production as a means to reproduce and ideally expand state legitimacy and power in society. We then give two examples of art-statism in practice to illustrate the possibility of art’s instrumentality.

Economics has long neglected the performing arts and its struggle to be self‐sufficient. This paper examines briefly one sector of the performing arts, namely the audience. There exist four pertinent factors for a concern with the audience. First, if the arts are a “good thing,” an effort should be made to determine who is deprived of the experience. Second, the characteristics of the audience must be known before an evaluation of ticket pricing and distribution policies can occur. “A third reason for concern with the nature of the audience is associated with the issue of government support. Both the desirability and the political feasibility of government support may depend, at least in part, on the composition of the audience. Fourth, effective marketing policy requires some form of a demand function and this requires some knowledge about the composition of the consumers. From this angle, the producer can package his product for maximizing sales and adequately prepare physical facilities for performances. The relevance between an audience and the performer pertains to a producer and a consumer in the simplest microeconomic terms. We can develop a demand function here, and hopefully find some intermediate point corresponding variables in the supply function. Thus the composition of the audience lies at the disposal of the practical economic tools of the analyst.

This paper reconstructs the clash between William Baumol’s and Paul Samuelson’s different approaches to the history of economic thought, disguised as a debate on the Marxian transformation problem on the pages of the Journal of Economic Literature in 1974. The published papers were the result of an intense exchange of letters that shows how the debate on the transformation problem is just the surface: the debate originated from the authors’ different approaches to the history of economic thought. Samuelson applied his famous “Whig” history of economics to suggest that Marx had little to nothing to offer to modern theorists, while Baumol was interested in the past authors’ theoretical and moral intentions. Baumol and Samuelson’s Methodenstreit resulted in two different visions of Marx, and there is evidence that they kept their different approaches for their entire career.

During the twentieth century mathematics has expanded at an unprecedented rate. This expansion has been accompanied by the increased application of mathematics to science. At a time when pure mathematics has been placing more and more emphasis on abstraction and the analysis of broad concepts there has been a corresponding proliferation of practical applications. This seems to have resulted from the fact that the sciences, too, have become more concerned with the discernment of general patterns in the study of nature. This search for simplifying ideas has increased the demand for ever more abstract tools of analysis.

William J. Baumol was one of the most prolific economists of his generation, analyzing a broad range of central economic issues addressing real problems of the world. In this essay, we present and critically evaluate Baumol’s research contributions in entrepreneurship economics and point to areas for future research. Baumol contributed an impressive number of important insights, increasing our understanding of entrepreneurship from both a macro and a micro perspective. He also devoted a large part of his writings to discussing public policy, linking his theoretical insights with policy issues in practice. His analyses are rooted in contemporary mainstream neoclassical economics, and one of his main objectives was to integrate the entrepreneur into this tradition. Today, Baumol is best known for his tripartite distinction between productive, unproductive, and destructive entrepreneurship and his associated idea that the institutional framework, “the rules of the game,” will determine how entrepreneurs allocate their time and effort across different – productive or unproductive – activities. An institutional environment that encourages productive entrepreneurship and spontaneous experimentation while disincentivizing unproductive activities becomes, through this insightful lens, the driving force of economic growth. As an economist, Baumol was knowledgeable and well acquainted with earlier scholars and their writings about entrepreneurship. Baumol’s writings were greatly inspired by Joseph Schumpeter’s views on entrepreneurship, and he made several attempts to formalize Schumpeter’s concept of the innovative entrepreneur. Baumol was in all senses an innovative contributor to entrepreneurship economics. His work has inspired the research community of entrepreneurship scholars, but like all great scientists, he also encountered criticism. His effort to integrate entrepreneurship into the mainstream theory of the firm was only partly successful.