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'..Entrepreneurship can’t be formulated in equations and sprinkled like pixie dust on the masses..''As Klein makes abundantly clear, capital is instead heterogeneous. Entrepreneurship can’t be formulated in equations and sprinkled like pixie dust on the masses by government initiatives or well-meaning foundations with the hopes that the inner-entrepreneur in every citizen will be summoned.' - Doug French
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'I argue that Mises’s concept of economic calculation—the means by which entrepreneurs adjust the structure of production to accord with consumer wants—belongs at the forefront of Austrian research into the nature and design of organizations ... All organizations plan, and all organizations, public and private, perform economic calculation. In this sense, the calculation problem is much more general than has usually been realized.''This chapter highlights some distinctive Austrian contributions to the theory of the firm, contributions that have been largely neglected, both inside and outside the Austrian literature. In particular, I argue that Mises’s concept of economic calculation—the means by which entrepreneurs adjust the structure of production to accord with consumer wants—belongs at the forefront of Austrian research into the nature and design of organizations. There is a unique Austrian perspective on economic planning, a perspective developed over the course of the socialist calculation debate. As was recognized in the early Austrian reinterpretations of the calculation debate (Lavoie, 1985; Kirzner, 1988a), Mises’s conception of the problem faced by socialist planners is part and parcel of his understanding of how resources are allocated in a market system. Mises himself emphasized that planning is ubiquitous: “[E]very human action means planning. What those calling themselves planners advocate is not the substitution of planned action for letting things go. It is the substitution of the planner’s own plan for the plans of his fellow men” (Mises, 1947, p. 493). All organizations plan, and all organizations, public and private, perform economic calculation. In this sense, the calculation problem is much more general than has usually been realized.'
- Peter G. Klein, Chapter 1, Economic Calculation and the Limits of Organization [1]
'It is .. vital that we understand the function of the entrepreneur and the process that is so critical to the advancement of society and well-being of its members.''As vital as entrepreneurship and the firm are to the working of the market and lives of virtually all working men and women, most schools of economic thought are silent on the subject. Even the work that has been done is incomplete and contradictory. Economists can’t even agree on what entrepreneurship is or what exactly entrepreneurs like the late Ewing Kauffman do. And the apparatus that facilitates the manifestation of the entrepreneurial vision—the firm—is but a “black box” where inputs enter and outputs emerge, like so much magic.
But like so many market phenomena that modern economics chooses to ignore or get wrong, an Austrian economist has entered the black box, examining its contents for a better understanding of not only what entrepreneurs are, but what they do and why they do it. Peter G. Klein has devoted his entire career to understanding the entrepreneur and the firm, bringing a distinctive Austrian approach to the problem while drawing from what all schools of thought have to contribute.
This book contains the fruit of Dr. Klein’s labors. And while the majority of the book was taken from articles appearing in academic journals, this book should not only be read by students and academics. Klein provides valuable insight that business owners and managers will find useful. As heroic as the entrepreneur may appear or thoughtful as the manager may seem, they don’t operate in a vacuum. Often they have no one to talk to and nothing to keep them in check but their own egos, which in many cases offers no check at all but the opposite.
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It is however vital that we understand the function of the entrepreneur and the process that is so critical to the advancement of society and well-being of its members. As Klein pries open the entrepreneurial black box, the glories and special talents of the entrepreneur are exposed, along with the limitations of the firm. The market environment that allows entrepreneurs to thrive is revealed. It is not that the society requires multitudes of entrepreneurs, but only that those with this rare talent be allowed to flourish unfettered. And for those readers who work for an agreed-upon wage helping some entrepreneur become wealthy, an appreciation is gained with the realization that ultimately it is only by satisfying customers that their entrepreneur bosses become successful.'
- Doug French, Foreward (The Capitalist and the Entrepreneur (
pdf) page v, vi)
Note[1]
The Capitalist and the Entrepreneur, page 2