Archive for September, 2006

Happy Mises Day

| Peter Klein |

We neglected to wish our readers yesterday a Happy Mises Day. Ludwig von Mises was born 125 years ago on 29 September 1881. Guido Hülsmann, whose full-length biography of Mises will appear in 2007, shares some tributes that were published on (or just before) Mises’s death in 1973. Among the accolades: “Recognized as a brilliant contributor to economic thought not only by his disciples but also by many who disagreed radically with his political and social philosophy” (International Herald-Tribune). “The world’s liberal economists [have lost] their most prolific pen” (Daily Telegraph). “He held that a free society and a free market are inseparable. He gloried in the potential of reason and man. In sum, he stood for principle in the finest tradition of Western Civilization” (Wall Street Journal). “The de Tocqueville of modern economics” (CBS television). Murray Rothbard wrote in Human Events:

Readers of Mises’ majestic, formidable and uncompromising works must have often been surprised to meet him in person. Perhaps they had formed the image of Ludwig Mises as cold, severe, austere, the logical scholar repelled by lesser mortals, bitter at the follies around him and at the long trail of wrongs and insults that he had suffered. They couldn’t have been more wrong; for what they met was a mind of genius blended harmoniously with a personality of great sweetness and benevolence. Not once has any of us heard a harsh or bitter word escape from Mises’ lips. Unfailingly gentle and courteous, Ludwig Mises was always there to encourage even the slightest signs of productivity or intelligence in his friends and students.

(For some reason, I never forget Hayek’s birthday.)

30 September 2006 at 10:14 am 1 comment

Varieties of Capitalist Development and Corporate Governance

| Peter Klein |

That is the theme for the 2007 Asia-Pacific Economic and Business History Conference at the University of Sydney. As noted in the call for papers: “While the historical study of market economies has been commonplace, there are many aspects worthy of further analysis including the role of savings, human capital, technology, government, and changing markets. Corporate governance has received wide attention in the wake of recent enterprise collapses, yet historians have only begun to research differences in corporate governance over time and among countries.”

The keynote speaker is Doug Irwin, author of several outstanding books on international trade theory and policy.

30 September 2006 at 8:57 am Leave a comment

Chaos Theory and Personal Responsibility

| Peter Klein |

What would Dalrymple say about this?

30 September 2006 at 8:49 am Leave a comment

Bounded Rationality and Paternalism Redux

| Peter Klein |

John Cassidy’s New Yorker article on neuroeconomics, and his (and Colin Camerer’s) use of behavioral anomalies to justify paternalistic social policy, has provoked many strong responses. The latest is “Neuro Wine in Old Bottles” by Will Wilkinson, which concludes:

New findings in brain science will certainly help us to improve the technologies of Reason. But our freedom is perhaps the most important of those technologies. So before we get carried away with exciting brain-based arguments for paternalism and regulation, we should remember that it’s not rational, in any sense of the word, to burn the ladder you’re climbing.

NB: Robert Fogel says that economists, too, suffer from cognitive bias — they are too pessimistic. Understandable, given that the economist’s usual role is to correct for foolish optimism, or what Sowell calls the “unconstrained vision.” (Thanks to Bryan Caplan and Russ Roberts for the links.) 

29 September 2006 at 3:26 pm Leave a comment

Framing and Incentives

| Nicolai Foss |

Here is one more cultural conservatism post, but one that relates to the economics themes that we often treat here at O&M.

I have just completed reading Theodore Dalrymple’s splendid Life at the Bottom: the Worldview that Makes the Underclass. This is confirming, challenging, and inspiring reading for somebody who subscribes, at least to some degree, to the economic worldview, i.e. notions that people respond (rather predictably) to incentives and in many ways react fairly rationally, that separating actions and consequences is often highly unfortunate, etc. (more…)

29 September 2006 at 11:39 am Leave a comment

Call for Papers — DRUID 2007

| Nicolai Foss |

It is hard to believe, but DRUID — the Danish Research Unit of Industrial Dynamics — is now entering its 11th year. As one of the original founder-members of the DRUID, it is just great to observe the continuous improvements that have characterized the DRUID conference series from the rather humble (i.e., amateurish in the true sense of the word) beginnings in 1995. In fact, after last year’s very successful conference, I heard the Director of DRUID, Peter Maskell, worry — rather tongue-in-cheek — that perhaps DRUID is becoming “too Americanized.”

DRUID has never projected a distinct research program, but it has been able to become one of the leading platforms for research in innovation, industrial dynamics, etc. in the World.  Its main activity is simply running two yearly conferences, one in January organized for PhD students and younger faculty, and one in June, much larger in scale and usually with good presenters indeed (e.g., Sid Winter, Steven Klepper, Anita McGahan, Alfonso Gambardella, Richard Nelson etc. etc.). In addition, DRUID maintains a very nicely organized website with lots of downloadable papers.

The full Call for Papers for the 2007 conference (not yet available on the DRUID website) is here:


29 September 2006 at 11:26 am Leave a comment

The “Essay Tradition” in Economics

| Peter Klein |

On the triumph of formalism in economics (addressed here and here) — not to mention academic insults — I give you this passage in Fred Kaplan’s The Wizards of Armageddon, a history of the RAND Corporation. The subject is RAND mathematician Albert Wohlstetter, the chief theoretician behind the development of US nuclear strategy in the 1950s and 1960s. Writes Kaplan:

[T]he social science division was removed from the rest of RAND — literally, 2500 miles away, in Washington, D.C. Most [of the social scientists] were figuratively removed, too: quantitative analysis had triumphed at RAND, through the spread of systems analysis and game theory and — until the Wohlstetter studies, which put the economids division on top of the strategic business — through the domination over the rest of RAND by the mathematics division. [Wohlstetter, though a mathematician, was associated with the economics division.] These sorts of studies were scientific, so it was thought; there were numbers, calculations, rigorously checked, sometimes on a computer. maybe the numbers were questionable, but they were tangible, unlike the theorizing, the Kremlinology, the academic historical research and interpretation produced by social science. Wohlstetter snootily denigrated all such works as being in “the essay tradition.”

29 September 2006 at 9:51 am Leave a comment

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Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).


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