Sunday, 24 July 2011

Contemporary work in Austrian Economics

Contemporary work in Austrian Economics is the title of a new working paper by Anthony J. Evans, Associate Professor of Economics, ESCP Europe. The paper is based on a talk given as “Austrian Economics: Past, Present and Future”, The Adam Smith Institute, St Stephens Club London, September 23rd 2010.

The abstract reads,
This article provides a brief survey of contemporary developments in the Austrian school of economics, signalling that: (i) the amount of Austrian research and the number of Austrian researchers is growing exponentially; (ii) good Austrian economists are not being marginalised by the economics profession; and (iii) there have been significant advances in our understanding of economics made recently. Scholars can embrace the second revival of Austrian economics and look confidently hat the increasing academic credibility of the school.
When discussing Organisational culture & management Evans writes,
Paul Dragos Aligica (2007) uses Misesian notions of human action to explore the role of scenario-building as a tool for decision-making, whilst in Capital in Disequilibrium, Peter Lewin (1999) analyses the subjective nature of capital, how it fits into a firm’s organisational structure, and how capital is evaluated and allocated ina world of disequilibrium. Fred Sautet’s (2000) An Entrepreneurial Theory of the Firm shows how firms flatten their organisation structure to benefit from entrepreneurial alertness, and Charles Koch (2007) creates an Austrian theory of management and shares the results of applying it to the world’s largest private company. Nicolai Foss and Peter Klein’s (forthcoming) book, The Theory of the Firm highlights an exposure to uncertainty and thus resource ownership as the key aspect of entrepreneurship, to develop an entrepreneurial theory of judgment.
This is interesting because I would argue that the Austrian theory of the firm, or theory of organisations in general, is one of the lest developed areas of Austrian economics. The Austrian approach to markets is much more developed than the their approach to the suppliers and demanders (firms and households) within those markets.

Evans ends on a positive note by saying,
Any half-decent economist should be able to quibble with my list, and I’m sure it reflects a bias towards my own research interests and background. I also recognise that I have missed out an even newer generation of Austrian economists. This all serves my point – Austrian scholarship is a spontaneous order and younger academics are constantly pushing out the boundaries of what can be accomplished. They are demonstrating that it is possible for Austrian school economists to take a seat at the top table of the professional debate without compromising their message - it just takes the right attitude and a lot of work. I’ve provided evidence of the remarkable progress that’s been made since the first revival, and will continue to be made. The academic wing of the Austrian school is flourishing, and the future of good economics is Austrian.

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