Heterogeneous Capital and the Coasean Firm
A Critique of Some Recent Developments in the Austrian Theory of the Firm
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https://doi.org/10.62374/e4jza823Klíčová slova:
Capital theory, firm, Coase, Austrian SchoolAbstrakt
In this paper some recent improvements and refinements of the mainstream Austrian theory of the firm are analyzed (Foss and Klein, 2012; Foss et al, 2007). Those refinements attempt to fuse the old Austrian-Coasean theory of the firm with a sophisticated analysis of entrepreneurship and capital theory, in order to broaden the scope and the application of the original intuition behind the Coasean theory that governance, planning and hierarchical mode of relationship are necessary features of an efficient market system. I criticize this strategy by combining the insights of the Austrian capital theory and the standard neoclassical theory of the firm, to show how the Coasean firm, both in its original and Austrian derivations misrepresents the real reasons and function of the firm in a market society. The main problem of this new synthesis is that it just broadens the old error committed by Mises and Rothbard, treating Coasean theory of the firm as central planning hierarchy to be consistent with Austrian argument against planning, and for economic calculation and entrepreneurship. In my analysis, the ingenious inclusion of the Austrian capital theory into the Coasean framework by Foss and Klein only adds another layer of errors to the original, untenable conception of the firm as a hierarchical and organizational entity by arguing that the firm is needed to handle the problem of heterogeneity of capital goods.
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