Archive for September, 2006

New Journal: Regulation and Governance

| Peter Klein |

Regulation & Governance aims to serve as the leading platform for the study of regulation and governance by political scientists, lawyers, sociologists, historians, criminologists, psychologists, anthropologists, economists, and others. Research on regulation and governance, once fragmented across various disciplines and subject areas, has emerged at the cutting edge of paradigmatic change in the social sciences. Through the peer-reviewed journal Regulation & Governance, we seek to advance discussions between various disciplines about regulation and governance, promote the development of new theoretical and empirical understanding, and serve the growing needs of practitioners for a useful academic reference.

Here is the journal’s homepage. John Braithwaite, Cary Coglianese, and David Levi-Faur are the editors. The interesting editorial board includes anthropologist Margaret Levi, law professors Susan Rose-Ackerman and Cass Sunstein, and economist Kip Viscusi. 

Viscusi, by the way, is a player in Vanderbilt University’s new PhD program in law and economics. (The budget for that program is one of the few big-ticket items for which Vanderbilt Chancellor Gordon Gee is not in trouble.)

28 September 2006 at 4:44 pm 2 comments

Tolerance and Subjectivism

| David Gordon |

Many people argue that because all value judgments are subjective, we shouldn’t impose our preferences on other people. Someone, e.g., who thinks that abortion is morally wrong should not try to prevent those who disagree with this view from having abortions. This argument strikes me as incoherent. The incoherence emerges clearly if we restate the argument in this way: Because all value judgments are subjective, here is a value judgment that isn’t subjective, namely, the value judgment that we shouldn’t impose our preferences on other people.

A defender of the argument might respond that he isn’t claiming that it is objectively true that we shouldn’t impose our preferences on others: he is rather stating, as a value judgment of his own, the view that we shouldn’t impose our preferences on others. A consequence of this way of taking the conclusion of the argument is that we shouldn’t impose this preference on others either. We shouldn’t forcibly interefere with those who are attempting to impose their value judgments on others, because to do this is to impose our value judgment, namely that one shouldn’t do such things, on them. But this is only a consequence of this subjectivist response that is probably unwelcome, not a refutation of it. (more…)

28 September 2006 at 11:46 am 3 comments

Lachmann Paper

| Nicolai Foss |

Giampaolo Garzarelli (University of Witwatersrand) and I have just had our paper on Ludwig Lachmann, “Institutions as Knowledge Capital: Ludwig M. Lachmann’s Interpretive Institutionalism,” accepted by the Cambridge Journal of Economics.  Mail me at if you want a copy. Here is the abstract:

This paper revisits the socioeconomic theory of the Austrian School economist Ludwig M. Lachmann. By showing that the common claim that Lachmann’s idiosyncratic (read: eclectic and multidisciplinary) approach to economics entails nihilism is unfounded, it reaches the following conclusions. (1) Lachmann held a sophisticated institutional position to economics that anticipated developments in contemporary new institutional economics. (2) Lachmann’s sociological and economic reading of institutions offers insights for the problem of coordination. (3) Lachmann indirectly extends contemporary new institutional theory without simultaneously denying the policy approach of comparative institutional analysis.

28 September 2006 at 5:48 am Leave a comment

Friedman-Stigler Correspondence

| Peter Klein |

Historians of economic thought, social-science methodologists, and Chicago School junkies may enjoy J. Daniel Hammond and Claire H. Hammond’s edited volume Making Chicago Price Theory: Friedman-Stigler Correspondence, 1945-1957 (Routledge, 2006). (Friedman, of course, is respected, though not universally admired, here at O&M.) Reviewer Craig Freedman says the Friedman-Stigler correspondence

reflects the way in which the two attempted to transform economics. In particular, we can discern their attempts to reshape economic methodology, as well as their changing views on such issues as equality and income distribution. As we read these letters, the outline of what would form the bedrock of the Chicago School, a distinctive take on price theory, becomes progressively clearer.

Freedman also notes that while Friedman’s influence on monetary theory and policy and economic methodology is well known, Stigler’s defense of Marshallian partial-equilibrium analysis over Walrasian general-equilibrium theory is not as widely appreciated. (more…)

27 September 2006 at 1:37 pm Leave a comment

Scruton on Chomsky

| Nicolai Foss |

From yesterday’s, Roger Scruton taking on Noam Chomsky:

Prof. Chomsky is an intelligent man. Not everything he says by way of criticizing his country is wrong. However, he is not valued for his truths but for his rage, which stokes the rage of his admirers. He feeds the self-righteousness of America’s enemies, who feed the self-righteousness of Prof. Chomsky. And in the ensuing blaze everything is sacrificed, including the constructive criticism that America so much needs, and that America–unlike its enemies, Prof. Chomsky included–is prepared to listen to.


27 September 2006 at 12:38 pm Leave a comment

MBA Students and Math

| Peter Klein |

My friend and former colleague Dwight Lee, along with Richard McKenzie, has produced a new textbook, Microeconomics for MBAs: The Economic Way of Thinking for Managers (Cambridge University Press, 2006). Lee and McKenzie have written more books than I’ve read (or colored) and, like all their books, Microeconomics for Managers is a delight — lively and engaging while also systematic, learned, and useful. I’ve been using Brickley, Smith, and Zimmerman’s Managerial Economics and Organizational Architecture for several years and have been quite satisfied, but am considering switching to McKenzie and Lee.

I noticed this plug in the dust-jacket blurb: “This is the first textbook in microeconomics written exclusively for MBA students. McKenzie/Lee minimizes attention to mathematics and maximizes attention to intuitive economic thinking.” I’ve taught undergraduates, MBAs, and PhD students, and haven’t noticed MBA students being more troubled by math than anyone else. Clearly many managerial economics texts, at any level, overemphasize technique over intuition and application. But many MBAs — especially those with an engineering background, which seems to be an increasing number — may actually prefer more math to less. Just a thought.

27 September 2006 at 11:17 am Leave a comment

Is the Corporation a Creature of the State?

| Peter Klein |

Piet-Hein van Eeghen argues in the Journal of Libertarian Studies (1, 2) that the corporation’s “entity status” — from which attributes such as limited liability and perpetuity are derived — is an artificial product of state intervention, a feature of the commercial landscape that wouldn’t exist in a truly free market. I think Eeghen is wrong, partly for failing to distinguish between limited contractual liability (which is achievable through contract) and limited tort liability (which isn’t). Limited contractual liability was a standard feature of joint-stock companies long before limited liability became the default rule in English common and statutory law, as Henry Hansmann (among others) has pointed out.

Anyway, for an interesting and lively debate on the corporation’s status in the free market, see this exchange (and the links therein) between Sean Gabb and Stephan Kinsella.

26 September 2006 at 5:51 pm 3 comments

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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).