CALL FOR PAPERS Special Issue of The Quarterly Journal of Austrian Economics:AUSTRIAN ENTREPRENEURSHIP THEORY Submission window: March 15 – April 15, 2020Guest editor: Per Bylund, School of Entrepreneurship, Oklahoma State University Overview Austrian economics is a widely respected body of theory in management broadly (e.g., Jacobson, 1992) and, especially, in entrepreneurship (Klein & Bylund, 2014). …Read More »
Articles by Per Bylund
The concept of economic cost seems to confuse people. It is not the price you pay for a good, but the reason you pay it. The cost of one action is the value you could otherwise have gained from taking another action. In other words, if you have $100 and you have the choice to buy two …Read More »
Rothbard wrote in the Libertarian Forum (v. 1, p. 184) that “… libertarians, if they have any personal philosophy beyond freedom from coercion, are supposed to be at the very least individualists.” Indeed, libertarianism holds high the rights and responsibilities of the sovereign individual: the right to self and to justly acquired property and thus …Read More »
Politics is hardly an effective force for bringing about positive change in society. Instead, real change, and especially such that changes people’s lives for the better, comes from elsewhere. It comes from business, and specifically from innovators, entrepreneurs, and pioneers in the market. And very often it does so despite politics and the state — …Read More »
Practically all critiques of markets are fundamentally ignorant and never address the actual issue. And they’ve been ignorant in the same way for about (at least?) a century. The so-called “market socialist” response to Mises’ claim that socialism (the common/public ownership of the means of production) is impossible illustrates this. Real Prices vs. Government “Prices” Starting …Read More »
[This is a chapter from The Problem of Production: A New Theory of the Firm.] This book is about what is generally referred to as the ‘firm’, a phenomenon in the market that appears obvious but that remains difficult to explain. While there is a field of study referred to as the theory of the …Read More »
The movie V for Vendetta has provoked public discussion of the meaning of anarchism. Murray Rothbard was an advocate of the stateless society, but he was never accepted by the anarchist movement and is still considered more a “capitalist lackey” than anarchist thinker. Indeed, anarcho-capitalism has always been considered an oxymoron by the self-proclaimed “true” …Read More »
When Ludwig von Mises noted that a manager is a “junior partner” of the entrepreneur, he did not mean to downplay the role of management in the economy. On the contrary, he wanted to make clear how the economic functions are different yet related. From the point of view of the economic system, i.e. how the …Read More »
[From Chapter 6, “The Realm of Entrepreneurship in the Market: Capital Theory, Production, and Change” in The Next Generation of Austrian Economics: Essays in Honor of Joseph T. Salerno.] Modern economic theory tends to treat production, the process of generating valued consumption in a market, as a function carried out within firms and so …Read More »
News media has been buzzing lately about the “Paycheck Fairness Act” sponsored primarily by Democratic elected officials in Congress. The rhetoric is exactly what one would expect: there is discrimination in the job market, observable in the “wage gap” between men and women workers (and other gender identities). So we need a law to fix …Read More »
There is severe confusion about the meaning of economic growth. Many seem to mistakenly think that it has to do with GDP or producing stuff. It does not. Economic growth means that an economy’s ability to satisfy people’s wants, whatever they are–that is, to produce wellbeing — increases. GDP is a rather terrible way of …Read More »
Automation seems to be a never-ending source of fear-mongering. Judging from the commentary, robots will “replace us” and cause large-scale unemployment. With the entry of artificial intelligence (AI), and robots that make robots, the value of human beings as productive forces in the economy is simply zero. People then become value-less consumers, only “mouths to …Read More »
Reprinted from Mises.org
There’s a whole lot of buzz about the sharing economy. Many seem to think it is something new, with some calling for a ‘new economics’ to explain it while others deride the ‘gig economy’ as a higher level of exploitation, inequality, and poverty. Neither is a good analysis.
First things first: the sharing economy was facilitated by advances in technology alongside consumer preferences changing from goods to services and thus from ownership to lease. These are not separate processes, but mutually constituting changes where each increases the other.
The advances in technology that brought about the sharing economy are those that allow for cheaper, faster, and more accurate communication, verification of factual claims, decentralized corroborated trust/reputation etc.
Reprinted from Mises.org
Not long ago, I needed the help of a plumber to fix a leaking bury hydrant on my property. While I could probably dig the hole and then, thanks to the glorious Internet, figure out how to fix it myself, it would hardly be a valuable use of my time. I am better at researching and teaching, and then spending some of my earnings to get other things done. So, I relied on the specialization offered through the division of labor in the market.
Using a well-known referral service to separate the wheat from the chaff, and thus find a reliable and reputed plumber, I was able to get an appointment the next morning. Long story short, the plumber shows up, looks at the bury hydrant, says something about “oh, you have one of those” followed by “I didn’t bring tools for that
[From the Quarterly Journal of Austrian Economics.] The Scandinavian countries, and primary among them Sweden, are commonly referred to as anomalies or inspirations, depending on one’s political point of view. The reason is that the countries do not appear to fit the general pattern: they are enormously successful whereas they “shouldn’t” be. Indeed, Scandinavians enjoy …Read More »
Originally Published September 20, 2011. What is a firm? This may not seem like a question in lack of an answer. In the United States, as in most other countries, it is a registered, regulated entity acting legally as a person. But economically, the legal definition is irrelevant: the economic function of the “firm” is …Read More »
[From the Quarterly Journal of Austrian Economics.] Entrepreneurship is a double-edged sword. On the one hand, it has become almost universally recognized over the past few decades that entrepreneurship is the engine of economic change, the generator of economic growth, and the main cause of job creation. Consequently, policy is often used in different ways …Read More »
Not long ago, I needed the help of a plumber to fix a leaking bury hydrant on my property. While I could probably dig the hole and then, thanks to the glorious Internet, figure out how to fix it myself, it would hardly be a valuable use of my time. I am better at researching and …Read More »
Apple held its 10th anniversary iPhone press event on 9/12. As expected, the tech giant released new iterations of their decade-old smartphone as well as the new iPhone X. Whereas the media has focused on innovation and technology, the event also tells another story: how the company uses the perception of innovation as a strategy for dealing with inflation.Yes, inflation. This is despite the fact the consumer tech market generally – and accurately – is characterized as deflationary: new generations of improved and innovative devices are released at a rapid pace and sold at unchanging or even falling prices. In other words, we get better and cheaper computers and other tech gadgets. But even though price deflation accurately describes this industry, it is not unaffected byRead More »
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Hoy se afirma casi universalmente que el gasto de consumo genera empleo. Esta tesis apoya la idea keynesiana general de que el gobierno debería “estimular” la economía cuando está sufriendo una recesión, ya sea mediante su política fiscal o monetaria.Gasto gloriosoEsencialmente, la idea es que, si aumenta el gasto en bienes y servicios, hará falta más gente para su producción. Y, como consecuencia, habrá más gente capaz de conseguir un empleo y ganarse un salario y así comprar bienes y servicios. En otras palabras, no importa si el gobierno aumenta el gasto desperdiciando dinero (ni siquiera si es dinero prestado), porque los engranajes económicos empezarán a girar y al producirse crecimiento seremos capaces de ocuparnos de deuda, déficits y demás
It is almost universally asserted today that consumer spending drives employment. This thesis gives support to the general Keynesian idea that government should “stimulate” the economy when it is suffering from a recession, whether it is through fiscal or monetary policy.Glorious Spending At the core, the idea is that if spending on goods and services goes up, then more people are needed in their production. And, as a consequence, more people are able to get jobs, earn a wage, and thus buy goods and services. In other words, it doesn’t matter if government wastefully increases spending — even if it is borrowed money — because the economic wheels start turning and as growth picks up we’ll be able to deal with debt, deficits, and so on.Not to mention the human sufferingRead More »
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A lo largo de la historia, el estado se ha justificado diciendo que es necesario para protegernos de otros, cuyas costumbres y creencias (se nos hace creer) son peligrosas. Durante milenios esta ficción fue fácil de mantener porque la mayoría de la gente interactuaba muy poco con personas fuera de sus comunidades casi autárquicas (y por tanto empobrecidas).Pero con el aumento de la industrialización y el comercio internacional en siglos recientes, la afirmación del estado de que es necesario para mantenernos “a salvo” frente a los extranjeros se ha visto cada vez más menoscabada.La mayoría de esto se debe al hecho de que, para beneficiarse del mercado hay que dedicarse a actividades pensadas para servir a otros y prever sus necesidades. Como
Throughout history, the state has justified itself on the grounds that it is necessary to protect us from others whose habits and beliefs — we are meant to believe — are dangerous. For millennia, this fiction was easy to maintain because most people interacted so little with people outside their nearly autarkic — and therefore impoverished — communities. But, with the rise of industrialization and international trade in recent centuries, the state’s claim that it is necessary to keep us “safe” from outsiders has become increasingly undermined. Much of this is thanks to the fact that in order to benefit from the market, one must engage in activities designed to serve others and anticipate their needs. As a result, trade increases our understanding for both members of ourRead More »
A frequently repeated claim is that loopholes in the tax code are “inefficient.” A more efficient tax, economists say, is a flat and all-encompassing tax that is inescapable. Why? Because this means no one will waste resources on tax planning and thus tax avoidance. In other words, more resources will be used in production, which is better for the “economy.”Leaving the moral and ethical argument about tax avoidance aside, the efficiency argument too is completely wrong. It shows how much economists have deviated from understanding what they supposedly try to learn about: the market.The loophole inefficiency argument is based on the view that seemingly unproductive uses of resources are a waste because they don’t contribute to the overall economy. But this is a backwardRead More »
I recently spent two weeks traveling in the People’s Republic of China (PRC), a vast country with many contrasts: old vs. new, poor vs. rich, traditional vs. modern, East vs. West. While it is a strange experience with many impressions, what’s most striking is the obvious and contradictory economic contrast between wealth and waste.Chinese city skylines in the economic development zones consist of business district skyscrapers mixed high-rise apartment complexes at least 30 stories high. The latter exist in groups of a dozen or so buildings of identical designs shooting far up into the sky, sometimes placed in the outskirts to facilitate the city’s expansion or change travel patterns according to some (central) master plan for the city.The boxy skylines are interrupted byRead More »
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Recientemente viajé durante dos semanas por la República Popular de China, un país enorme con grandes contrastes: lo viejo y lo nuevo, los pobres y los ricos, lo tradicional y lo moderno, el este y el oeste. Aunque es una experiencia extraña con muchas impresiones, lo más sorprendente es el contraste económico evidente y contradictorio entre riqueza y desperdicio.Los skylines de las ciudades chinas en las zonas de desarrollo económico consisten en distritos empresariales llenos de rascacielos mezclados con altos complejos de apartamentos de al menos 30 plantas. Estos últimos son grupos de aproximadamente una docena de edificios de diseño idéntico disparados hacia el cielo, a veces colocados en laderas para facilitar la expansión de la ciudad o
[Editor’s note: Energy Secretary Rick Perry on Thursday declared "you put the supply out there and the demand will follow." It appears that Perry was attempting to invoke Say’s Law, and many professional economists and pundits quickly took to mocking both Perry and Say’s Law for making assertions contrary to modern Keynesian orthodoxy. Below, economist Per Bylund explains what Say’s Law really says, and why it’s a good thing.] Few concepts are as misunderstood as the so-called Say’s Law. In part, this is the fault of John Maynard Keynes, who needed to do away with it to make room for interventionist policy. How do you do away with a “Law” that had been core to economists’ understanding of the market economy for 150 years? You misrepresent it. Strawmen are so much easier toRead More »
After a highly publicized failure to repeal Obamacare in March, Republican leaders have repeatedly said the battle is not over. President Donald Trump continues to push lawmakers to negotiate changes to the 2010 healthcare law, though it’s not clear whether any legislation will have enough support to usurp the Affordable Care Act.Instead of trying to replace Obamacare with a different version, we should let entrepreneurs play a prominent role in fixing our broken healthcare system.Politicians have overlooked entrepreneurship as a healthcare solution because of an obvious bias against the market. As healthcare has evolved from a local and distributed service to its current highly centralized form, many people have assumed entrepreneurs and small businesses cannot provideRead More »
Entrepreneurship as a higher education discipline has something of a split personality. Its roots are in practical instruction and business school curriculum operating as a trade or vocational school, supplying students with skills necessary to manage firms.In the world of entrepreneurship, this roughly equates to How to Start a Business 101. Consequently, entrepreneurship programs provide practical and hands-on instruction on everything from imagination and ideation to market analysis and business plans. Courses frequently touch on starting businesses both within and outside the classroom.Many of these aspects are simply expected of entrepreneurship programs, regardless of whether we’re talking about undergraduate majors and minors or graduate degrees. MostRead More »
Glorious Tax Season
Taxes and Spending1 hour agoPer BylundTax season is here. This is a time to celebrate. No, I mean it. Not because the State makes its claim on our hard-earned monies known, but because of what is on everybody’s mind and the type of activity we’re all involved with. Seldom is the State as present in our pockets (and pocket books) as in mid-April every year, when we either learn that we have inadvertently paid even more than the State thinks is its "fair share" of our earnings, or learn that even the outrageous amounts we have already paid weren’t enough. And to make matters worse, we waste a lot of productive time to fill out forms and collect receipts—- for the only purpose of proving to the State that we didn’t keep any income from them. But if we think about it, what tax season really means is that taxation, or legal extortion by the State, is on everybody’s mind. Some of our confused peers get tax refunds and appear to consider this a "gift," which may be upsetting for those considering where the money originally came from. On the other hand, it might just be the case that these "confused" individuals have the proper mindset: they consider anything taken or claimed by the State as forever lost – and from this perspective a "refund" is indeed a gift. After all, it seems a bit naive to put faith in having excess ransom paid returned.