Archive for April, 2011

More on Routines

| Nicolai Foss |

The Journal of Institutional Economics, now in its seventh year of operation, is emerging as an important outlet in the intersection of new and old institutional economics, evolutionary economics and other more or less heterodox approaches. In addition, Geoff Hodgson and Benito Arrunada, the editors, are doing a splendid job of attracting contributions, not only from luminaries such as Richard Posner, but also from important non-economist thinkers whose work may have a bearing on economic issues (e.g., philosopher John Searle and evolutionary anthropologist Robin Dunbar).

The most recent issue of JoIE features a special issue on “Business Routines.” The SI includes particularly thoughtful essays by Ulrich Witt and Jack Vromen. As readers of this blog will know, probably ad nauseam, Teppo Felin and I have repeatedly discussed the troubling lack of micro-foundations for understanding the emergence, stability, change, etc. of routines (and other similar constructs, like capabilities). We also have a paper in the SI, launching related, but different critiques. Specifically, we explicate the behaviorist and empiricist foundations of the organizational routines and capabilities literature and the extant emphasis placed on experience, repetition, and observation as the key antecedents and mechanisms of routines and capabilities. 

This paper is followed by three comments by Sidney Winter, Brian Pentland, and Geoff Hodgson and Thorbjørn Knudsen, respectively, that take critical (in the case of Pentland, extremely critical) issue with various aspects of our argument. Winter and Knudsen and Hodgson raise many fundamental points, but unfortunately Pentland has thoroughly misunderstood the nature of the micro-foundations projects we advocate, and therefore concludes that all we add to the field is “confusion.” Although there is no such thing as bad publicity, Teppo and I are working on a rejoinder to these comments. More to come!

29 April 2011 at 7:31 am 2 comments

Macroeconomics Quote of the Day

| Peter Klein |

From Mario Rizzo, who’s written a number of great posts on contemporary macroeconomic thought:

The truth is that pre-Keynesian economics was, in most ways, more sophisticated than the aggregate demand framework bequeathed to us by Keynes and his official interpreters.

Mario explains how Paul Krugman, like Keynes himself, puts forth a straw-man version of pre-Keynesian macroeconomics in which a) crises are impossible and b) only national aggregates matter. Actual pre-Keynesian macroeconomics, like today’s Austrianism, often focused on the composition of output and employment across firms, industries, and sectors. Only a few oddballs, like Foster and Catchings, the proto-Keynesian underconsumptionist theorists skewered by Hayek in “The Paradox of Savings,” worried about economy-wide underconsumption.

See a sampler of our own thoughts on Keynes and Keynesianism here, here, and here. Or you could just watch the brilliant Keynes versus Hayek, Round 2.

28 April 2011 at 5:53 pm 1 comment

Contributions from Mature Scholars

| Peter Klein |

Following up my earlier post on Austrian longevity: Rafe Champion notes that Max Weber died suddenly of pneumonia, in 1920, at age 56. What important further contributions might he have made if he had lived longer?

This prompts the thought, what would have been lost if some long-lived Austrians [and fellow travelers] had died at 56? For Mises, that was 1937, before his masterwork was completed (later translated as Human Action) and before he was a living presence in the US.

For Hayek, that was 1954. No Constitution of Liberty and later works, no Nobel Prize.

For Popper, 1958, before The Logic of Scientific Discovery appeared in English and a dozen other books apart from The Open Society and The Poverty of Historicism.

Coase turned 56 in 1966, with several important contributions still to come: the 1970 paper on durable-goods monopoly, the 1974 paper on the lighthouse, and his recent papers on Fisher Body, not to mention the Nobel Prize and his crowning achievement, the 2002 CORI Lecture. What other examples come to mind?

27 April 2011 at 9:35 am 4 comments

Research Design Quote of the Day

| Peter Klein |

Following up our earlier discussion of identification versus importance (see also this), here’s the research design quote of the day (via Pete Boettke):

I worry that the drive for “clean” identification as a methodological obsession is driving some junior researchers . . . to a pursuit of the cute instrument (whether natural or experimental). This is leading them down the intellectual cul de sac of precise answers to trivial questions.

You see this kind of lament expressed more and more in various social science fields. Will there be a backlash against the identification obsession?

26 April 2011 at 9:33 am 3 comments

O&M Five-Year Anniversary

| Peter Klein |

O&M went live exactly five years ago, 25 April 2006. Since then we’ve run 2,549 posts and hosted 7,375 comments, most of them insightful and informative. How to celebrate? We are not as self-aggrandizing as some, so here’s a low-key approach. First, the all-time most popular posts, in descending order:

Second, a purely subjective list of some of our favorite comments: (more…)

25 April 2011 at 12:04 am 10 comments

Rhetoric for Academics

| Peter Klein |

Some professors could definitely use these pointers on rhetoric from the Art of Manliness blog. Women professors too. (Via LRC.)

Addendum: V.S. Naipaul’s Rules for Beginners (via 3quarks):

1. Do not write long sentences. A sentence should not have more than ten or twelve words.

2. Each sentence should make a clear statement. It should add to the statement that went before. A good paragraph is a series of clear, linked statements.

3. Do not use big words. If your computer tells you that your average word is more than five letters long, there is something wrong. The use of small words compels you to think about what you are writing. Even difficult ideas can be broken down into small words.

4. Never use words whose meaning you are not sure of. If you break this rule you should look for other work.

5. The beginner should avoid using adjectives, except those of colour, size and number. Use as few adverbs as possible.

6. Avoid the abstract. Always go for the concrete.

7. Every day, for six months at least, practice writing in this way. Small words; short, clear, concrete sentences. It may be awkward, but it’s training you in the use of language. It may even be getting rid of the bad language habits you picked up at the university. You may go beyond these rules after you have thoroughly understood and mastered them.

23 April 2011 at 4:21 pm 4 comments

Mahoney Invested as Caterpillar Chair

| Peter Klein |

Congratulations to O&M friend and former guest blogger Joe Mahoney for his investiture as the Caterpillar Chair in Business at the University of Illinois at Urbana-Champaign. Here is the official announcement, which includes the following summary of Joe’s many accomplishments:

Joseph T. Mahoney is a professor of business administration at the University of Illinois who specializes in corporate governance and organizational economics. He is an editor for several top management journals, a prolific author, frequent advisor to Ph.D. candidates, and a professional consultant. For more than 20 years Mahoney has been an award winning teacher to undergraduates, MBAs and other graduate students. He holds a B.A. in Economics from the University of Pennsylvania, and M.S. and Ph.D. degrees in Business Economics from the Wharton School of Business.

Joseph Mahoney has published more than 50 scholarly articles in respected journals like the Academy of Management Review, Journal of Management, Journal of Management Studies, and Strategic Management Journal. His publications have been cited over 5,600 times by scholars in 65 countries. His book, Economic Foundations of Strategy has been adopted by over 30 top doctoral programs. Mahoney is an editor for the International Journal of Strategic Change Management and the Strategic Management Journal, and he contributes to 21 additional journals. Mahoney’s passionate teaching has garnered him many outstanding teacher awards since coming to Illinois in 1988. In that time he also served on 47 completed doctoral dissertation committees and currently serves on 8 others that are in progress.

You may recall that Joe is also this year’s recipient of the Academy of Management’s Irwin Award. Way to go, Joe!

21 April 2011 at 9:37 am 5 comments

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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).