The Austrian approach to capital generated considerable controversy, both within the school itself and between the Austrians and rival schools of economic thought. Given the attention devoted to the problem of measuring a heterogeneous capital stock, it is surprising that relatively little analytical effort has been devoted to the concept of heterogeneity itself. The notion of heterogeneous capital is crucial not just for Austrian capital theory, but for (Austrian) economics in general. For example, the Austrian position in the socialist calculation debate of the 1930s (Hayek, 1933; Mises, 1920 ) is based on an entrepreneurial concept of the market process, one in which the entrepreneur’s primary function is to choose among the various combinations of factors suitable for producing particular goods (and to decide whether these goods should be produced at all), based on current prices for the factors and expected future prices of the final goods. If capital is shmoo [a homogeneous blob] with one price, then entrepreneurship is reduced to choosing between shmoo-intensive and labor-intensive production methods (or among types of labor), a problem a central planner could potentially solve. The failure of socialism, in Mises’ (1920) formulation, follows precisely from the complexity of the economy’s capital structure, and the subsequent need for entrepreneurial appraisal. As Lachmann (1956: 16) points out, real-world entrepreneurship consists primarily of choosing among combinations of capital assets:
[T]he entrepreneur’s function … is to specify and make decisions on the concrete form the capital resources shall have. He specifies and modifies the layout of his plant. … As long as we disregard the heterogeneity of capital, the true function of the entrepreneur must also remain hidden.
—Nicolai J. Foss and Peter G. Klein,
Organizing Entrepreneurial Judgment: A New Approach to the Firm (New York: Cambridge University Press, 2012), 116-117.
No comments:
Post a Comment