Chapter 14 of 15 · The Capitalist and the Entrepreneur: Essays on Organizations and Markets by Peter G. Klein
Index
INDEX
A | B | C | D | E
F | G | H | I | J
K | L | M | N | O
P | R | S | T | U
V | W
A
alertness, in entrepreneurship, 96, 102
American Economic Association (AEA), 167
ARPANET, 153
asset specificity, see alsoheterogeneous capital; heterogeneous resources or assets
capital heterogeneity, 72
attributes
entrepreneurship, 116
heterogeneous capital, 75–80, 111
Austrian economics, see alsoprice theory
capital heterogeneity, 75–80
collapse of the Austrian school in Austria, 178
corporate governance, 28–35
divestitures, 52
economic calculations of entrepreneurs, 32–35
entrepreneurship, 29–31, 68, 94, 111
financiers as entrepreneurs, 45–48
Hayek and, 182–187
internal capital markets, 40–48
Menger’s contribution to, 174
Rothbard and economic calculation under socialism, 16
and Williamson, 187–193
autonomy, compared to freedom and liberty in the digital revolution, 159
B
Benkler, Yochai, The Wealth of Networks, 157–162
Berle–Means corporations, 43
Bhidé, Amar, on internal capital markets, 41
bibliography, 195–234
black box model
opportunities as, 106
shmoo capital, 71
Williamson on, 188–190
boundaries, firms, 84
broken window fallacy, Internet technology, 156
bureaucracy, 44
business cycle
Hayek’s contribution to theory of, 176, 180–182
and management theory, 169–171
C
calculation, versus incentives in determining firm size, 9–13
capital, see alsoasset specificity; heterogeneous capital
Austrian economics, 75
theory of the firm, 71–75
Williamson on theory of, 190
capital markets
corporate governance, 35–37
internal capital markets, 40–48
Mises on, 46
capitalist-entrepreneurs, Mises on, 30
capitalists
corporate governance, 25
relationship to managers, 35
centrally planned economies, seesocialist theories
Coase, Ronald
compatibility with Austrian economics, 18
Rothbard’s Coasian framework on firm size, 17
on transaction costs, 4
Coasian framework
about, 27
Rothbard consistency with, 34
collective action, theory of, 115
collectives, holding property rights, 159
competition, Hayek’s contribution to concept of, 182
conglomerates, unrelated diversification, 51
contracts, entrepreneurial function, 90
contractual approach, corporate governance, 27
contractual framework, 27
cooperatives, entrepreneurial teams, 114
corporate control, seemarket for corporate control
corporate governance, 23–48
Austrian economics, 28–35, 37–48
capital markets, 35–37
contractual approach, 27
entrepreneur-promoter and capitalist approaches, 25–26
traditional approach, 24
Williamson on, 189
corporations, seecorporate governance; firms; multidivisional (M-form) corporations
costs, see alsotransaction costs
agency costs, 36
transaction costs, 4
creation approach, entrepreneurship, 104
D
decentralization, about, 89
digital revolution, Benkler on, 157
discovery approach, entrepreneurship, 104
diversification, and internal capital markets, 42
divestitures
predictable mistakes hypothesis, 50–52, 60–65
reasons for, 57–59
dummy variables, in research on mergers and divestitures, 62
E
economic value added (EVA), 39
economizing, Williamson on, 191
efficiency, predictable mistakes hypothesis, 57–60
empire building hypothesis, divestitures, 60, 64
entrepreneur-promoter, corporate governance, 25
entrepreneurial action
applications of, 113–115
and heterogeneous capital and economic organization, 109–113
entrepreneurial market process, about, 58
entrepreneurial teams, 114
entrepreneurs, as financiers, 45–48
entrepreneurship, see alsocapitalist-entrepreneurs; predictable mistakes hypothesis
heterogeneous capital, 79
Knightian concept of, 19
as an occupational choice, 89
occupational, structural, and functional, 95–99
as opportunity identification, 99–109
productive and destructive, 85
profit and loss, 54–57
risk and uncertainty, 122
sources for theory of, 67
equilibrium
applied to the digital revolution, 162
EVA (economic value added), 39
exchange, relative costs of external and internal, 4
expectations, convergence to equilibrium in price theory, 139–150
experimental activity, heterogeneous capital, 79, 81
external exchange, relative cost, 4
F
final state of rest (FSR), 135–139
financial-market entrepreneur, seecapitalist-entrepreneurs
financial markets, seecapital markets
financiers, as entrepreneurs, 45–48
firms, 1–21, see alsoblack box model; corporate governance; multidivisional (M-form) corporations
Austrian economics, 18–21
boundaries of, 84
as controlled experiments, 82
corporate restructurings, value of, 50
diversification and internal capital markets, 42
divestitures, predictable mistakes hypothesis, 50–52, 57–59, 60–65
emergence of, 80–83
as investments, 38
output levels, 39
tradeoffs in internal organization, 86
transaction costs, 4
Williamson on, 188–190
fixed costs, allocating, 17
free rider problem, tender offers, 47
freedom, compared to autonomy in the digital revolution, 159
function activity, entrepreneurship as, 96
G
general equilibrium theory, entrepreneurship, 93
GI Bill, 165
governance, seecorporate governance
government, see alsoregulation
aid to education sector, 164, 165
intervention in marketplace: effect on entrepreneurial error, 53
role in creating bureaucracy, 44
role in development of the Internet, 153–157
group selection, 185
H
Hayek, F. A.
on leftward and rightward leanings in academia and the private sector, 163
on malinvestment, 171
on market socialism, 8
relationship between Austrian and neoclassical economics, 146–150
heterogeneous capital, 67–91
attributes, 75–80
opportunity discovery, 109–113
organizing and using, 80–87
theory of the firm, 71–75
heterogeneous resources or assets, 170, 190
homogeneity
in economic models, 170
versus heterogeneity, 186
I
incentives, versus calculation in determining firm size, 9–13
information commons, privatizing, 159
intellectuals, support for socialism, 162–169
internal capital markets, Austrian economics, 40–48
internal exchange, relative cost, 4
Internet, roles of government and market place, 153–157
investments, firms as, 38
J
judgment
in entrepreneurship, 69, 97, 109, 123
incomplete markets for, 80
K
Kirzner’s framework
about, 29
on convergence toward equilibrium, 139
Knight, Frank H.
as an Austrian framework for firm size, 18
on judgment, 70
on probability, 118–121
knowledge-based approach to capital heterogeneity, 73
knowledge problem
convergence to equilibrium in price theory, 139–150
Hayek’s contribution to concept of, 32, 182
Kreps, David, on the theory of the firm, 4
L
Lachmann, Ludwig M.
contributions to economics, 131
on convergence toward equilibrium, 139
liberty, and social production, 158
M
M-form (multidivisional) corporations, internal capital markets, 40
macroeconomics, homogeneity versus heterogeneity, 170
malinvestment, Hayek on, 171
management theory
and business cycle, 169–171
Mises distinction with entrepreneurship, 30
Mises on managerial autonomy, 45
role of managers versus capitalists, 35
Manne, Henry, on market for corporate control, 36
market, role in development of the Internet, 153–157
market for corporate control
about, 36
regulation of, 52
about, 7
mathematical solution, seemarket socialism
Menger, Carl
on capital heterogeneity, 76
contributions to economics, 133–134, 171–174
price theory, 145
mergers, predictable mistakes hypothesis, 57–60
metaphors, entrepreneurship, 105
Mises, Ludwig von
on calculation debate, 6
on divestitures, 53
on entrepreneurship, 30, 54, 99
on financial markets, 46
on judgment, 123
on managerial autonomy, 45
on market for corporate control, 37
on market socialism, 23
on probability, 118–121
on the purchasing power of money, 143
relationship between Austrian and neoclassical economics, 146–150
relationship to Hayek’s thought, 184
on uncertainty, 122
mistakes, seepredictable mistakes hypothesis
money, purchasing power of, 143
multidivisional (M-form) corporations, internal capital markets, 40
N
networks, and social production and private property, 157–162
O
objective opportunities, versus subjective opportunities, 101–106
occupational choice, entrepreneurship as, 89, 95
opportunity discovery, 93–116
entrepreneurial action, applications of, 94, 113–115
entrepreneurial action, heterogeneous capital, and economic organization, 109–113
occupational, structural, and functional perspectives on entrepreneurship, 95–99
opportunity identification, entrepreneurship as, 99–109
opportunity identification, entrepreneurship as, 99–109
organization, see alsoblack box model; corporate governance; firms; multidivisional (M-form) corporations
and entrepreneurial action and heterogeneous capital, 109–113
entrepreneurial action, 113
heterogeneous capital, 80–87
risk and uncertainty, 117–124
organizational grind, 109
output levels of firms, in relation to outside investment opportunities, 39
overhead, allocating, 17
ownership, seeproperty rights
P
packets (Internet), pricing, 155
plain state of rest (PSR), 135–139
predictable mistakes hypothesis, 49–66
divestitures, 60–65
mergers, sell-offs, and efficiency, 57–60
profit and loss in entrepreneurship, 54–57
price-earnings (P/E) ratios, mergers and divestitures, 61
price theory, see alsotransfer prices, 125–151
before 1974, 129–134
equilibrium, 135–150
future directions, 150
Hayek’s contribution to, 181
Menger’s contributions to, 171
Mengerian, 145
socialism and, 10
pricing
Internet services, 156
packets on the Internet, 155
Principles, 173
privatizing, information commons, 159
probability, see also uncertainty Mises and Knight on, 118–121
profit and loss
defined, 39
entrepreneurship, 54–57
property rights
held by collectives, 159
and networks and social production, 157–162
PSR (plain state of rest), 135–139
purchasing power of money, 143
R
radical uncertainty, 145
references, 195–234
regulation, market for corporate control, 52
rents, safeguarding, 28
resource-based approaches to capital heterogeneity, 73
return on investment (ROI), across multiple subunits, 39
risk, and uncertainty and economic organization, 117–124
Robbins, Lionel, on market socialism, 8
Rothbard, Murray N.
Coasian framework, 34
on equilibrium constructs, 141
on financial markets, 45
mundane economics, 130
on socialist economic calculation, 16, 33
on the traditional role of economists, 166
S
Schumpeter, Joseph, on academic viewpoints, 164
sell-offs, predictable mistakes hypothesis, 57–60
shareholders, control and governance mechanisms, 36
“shmoo” capital, about, 71
size of firms, 5–18
calculation versus incentives, 9–13
Rothbard on, 13–18
socialist theories, 6–9
social production, and networks and private property, 157–162
calculation versus incentives, 9
intellectuals support for, 162–169
pricing problem, 15
Rothbard on socialist calculation debate, 16, 33
size of firms, 6–9
specificity, seeasset specificity; heterogeneous capital; heterogeneous resources or assets; homogeneity
spontaneous order, 185
standard account, in calculation debate, 6
strategizing, Williamson on, 191
subjective opportunities, versus objective opportunities, 101–106
subjectivist approach
entrepreneurship, 108
subjective probability theory, 120
T
teams, entrepreneurial teams, 114
tender offers, free rider problem, 47
theory of the firm, see alsoblack box model
about, 3
corporate governance, 24
heterogeneous capital, 71–75
transaction costs
firms, 4
shmoo capital, 72
transfer prices
estimating, 34
Rothbard on, 14
U
Uncertainty
entrepreneurship, 99
Kirzner’s framework, 29
Mises on, 30
radical uncertainty, 145
and risk and economic organization, 117–124
units of analysis, opportunity identification, 107
V
Vaughn, Karen I., on price theory, 128
vertical integration, Williamson on, 191
W
The Wealth of Networks, 157–162
Wicksteedian state of rest (WSR), 135, 137, 138, 139
Williamson, Oliver
and Austrian economists, 187–193
on heterogeneous capital, 83
transaction cost framework, 19
World War II, influence on economics profession, 167
The Capitalist and the Entrepreneur: Essays on Organizations and Markets
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