Archive for August, 2013

The Journalists and Syria

| Peter Klein |

Looks like we need a new subject category for the demise of the journalism sector. As discussed frequently on this blog, most journalists are little more than press agents for government officials (1, 2, 3). US news outlets typically take the perspective of the Washington insider, repeating solemn pronouncements from their confidential sources as if these were verifiable facts without questioning, challenging, even investigating. It’s a simple bargain: report what the official sources say in exchange for access to those sources, without which you lose status.

Conor Friedersdorf, writing in the Atlantic, provides this week’s illustration. [See also the Addendum below.] While the US public and the US Congress overwhelmingly oppose US military intervention in Syria, the mainstream news outlets write only about the “pressure” on President Obama to act — never bothering to describe this pressure or explore its source:

The citizenry wants us to stay out of this conflict. And there is no legislative majority pushing for intervention. A declaration of war against Syria would almost certainly fail in Congress. Yet the consensus in the press is that President Obama faces tremendous pressure to intervene. . . .

Where is this pressure coming from? Strangely, that question doesn’t even occur to a lot of news organizations. Take this CBS story. The very first sentence says, “The Obama administration faced new pressure Thursday to take action on Syria.” New pressure from whom? The story proceeds as if it doesn’t matter. How can readers judge how much weight the pressure should carry? Pressure from hundreds of thousands of citizens in the streets confers a certain degree of legitimacy. So does pressure from a just-passed House bill urging a certain course of action, or even unanimous pressure from all of the experts on a given subject.

What I’d like is if news accounts on pressure to intervene in Syria made it clear that the “growing calls … for forceful action” aren’t coming from the people, or Congressional majorities, or an expert consensus. The pressure is being applied by a tiny, insular elite that mostly lives in Washington, D.C., and isn’t bothered by the idea of committing America to military action that most Americans oppose.

Some reporters suffer from what Thomas Sowell called the vision of the anointed, and most live in a bubble surrounded by insiders and elites who share their outlook. But I suspect the main reason for this style of writing is the quid pro quo described above.

I can’t resist quoting a little more: (more…)

30 August 2013 at 3:18 pm Leave a comment

David Landes

| Dick Langlois |

As some readers may already have heard, David Landes passed away on August 17. The New York Times has not seen fit to publish an obituary, but here is one by Landes’s son Richard.

I only met Landes once, at the International Economic History Association meeting in Milan in 1994. I attended a session he chaired on the Industrial Revolution. Rondo Cameron, a real character, sat himself down in the front row near the podium. Cameron was one of the most vocal proponents of the idea that there was actually no such thing as the Industrial Revolution, based largely on the argument that income per capita did not rise dramatically during the late eighteenth and early nineteenth century (even though both the numerator and denominator were rising dramatically). Landes opened the session, and some hapless economic historian began presenting a paper on something or other during the Industrial Revolution. Cameron immediately put up his hand and announced that the presenter’s premise was mistaken – because there had been no Industrial Revolution! Landes then sprang back to the podium and delivered a wonderful extemporaneous speech on why it was indeed appropriate to talk about an Industrial Revolution, including an analysis of the word “revolution” and its first use in French. This session also sticks in memory because half-way through an audience member suffered and epileptic fit and had to be carted out to an ambulance.

I must say that, in the great debates in which Landes engaged, I most often found myself coming down on his side.

29 August 2013 at 11:30 am Leave a comment

Pindyck on Climate Science

| Peter Klein |

Further to my previous post on misplaced confidence, here is Robert Pindyck on one of the critical tools used by climate scientists.

Climate Change Policy: What Do the Models Tell Us?
Robert S. Pindyck
NBER Working Paper No. 19244, July 2013

Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g. the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models’ descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading.

Thanks to Bob Murphy for the pointer.

28 August 2013 at 6:15 am Leave a comment

Young Ronald

| Peter Klein |

Here’s a picture of Ronald Coase you may not have seen, from his student days at LSE.

Young Ronald

From Hayek: A Commemorative Album (London: Adam Smith Institute, 1998), and courtesy of Bettina Greaves.

27 August 2013 at 10:27 am 1 comment

ContractsProf Blog Symposium on Stuart Macaulay

| Peter Klein |

Economists and management scholars know Stuart Macaulay’s landmark 1963 article, “Non-Contractual Relations in Business: A Preliminary Study,” as the foundation for modern work in relational contracting. As Williamson (1985, p. 10) put it, “Macaulay’s studies of contractual practices support the view that contractual disputes and ambiguities are more often settled by private ordering than by appeal to the courts — which is in sharp contrast with the neoclassical presumptions of both law and economics.” A new book on Macaulay has promoted a symposium over at the ContractsProf Blog. I’m particularly looking forward to this week’s contributions, especially the one from Gillian Hadfield.

26 August 2013 at 10:48 am Leave a comment

More on Collaboration and Innovation

| Peter Klein |

Following up my earlier post on artistic collaboration, and its relationship to entrepreneurial collaboration, here’s a quote from Paul Cantor on his new book, The Invisible Hand in Popular Culture: Liberty vs. Authority in American Film and TV:

Many people who condemn pop culture and dismiss it as artistically worthless dwell on the fact that films and television shows are almost never the products of a single artist working on his own. It is therefore important to show that many of the great works of high culture grew out of a collaborative process too. There is nothing about cooperation in artistic creation that precludes high quality. Too many cooks may spoil the broth, but they may also each add a distinctive flavor and work together to bring the recipe to perfection. The processes of synergy and feedback work in popular culture just the way they do in other areas of human endeavor. This is all part of my defense of popular culture — to demonstrate that the conditions of production in film and television are not necessarily incompatible with artistic as well as commercial success.

Likewise, entrepreneurship and innovation are collaborative media — which is easy to see once you realize that entrepreneurship is not about recognizing “opportunities,” but acquiring and controlling resources that are used in production.

20 August 2013 at 9:51 am 5 comments

Post AoM: Are Management Types Too Spoiled?

| Nicolai Foss |

So, this year’s version of the Academy of Management Meetings, the major association of management researchers, took place in Orlando, Fl. The conference theme was “Capitalism in Question,” a theme with decidedly “lefty” connotations (see the official description of the theme here).  The politization of the event was discussed in a Business Week blog that was dripping with irony. 

Strikingly, however, I heard relatively few complain about the politization of the Academy implied by the theme (at least one very prominent scholar, however, erased “Capitalism in Question” from his badge, and so did I), but I heard lots of moaning, whining, and bickering about the location itself. In fact, I have never heard anything like it.  So, there were complaints about the lack of decent restaurants, there not being enough coffee outlets, too many queques, sub-standard hotels, annoying American families, comments about Americans in general that, had the same thing been said about Europeans would …well … , and so on and so forth.  Here is a pretty pathetic blog on the subject. And here is a lame and self-righteous letter to “Dear Minnie.”

Yes, Disney World may perhaps clash with the refined and elevated tastes of many a management professor (I didn’t myself particularly fancy those plastic baroque carpes (aka “dolphins”)), but, hey, this is a conference. You are supposed to be at work. To be sure, the Academy of Management is about hand-shaking and meeting friends, and building and maintaining networks are obviously productive input in any academic’s work process. And yet, 99% of the participants had their travel and stay and fee paid for by someone else (in many cases, the taxpayers). The sessions, PDWs, symposia, and so on were no worse than usual. No one presumably had to go hungry to bed. It was certainly possible to get the beers you wanted. The receptions were well-attended, noisy and alcoholic. In short, pretty much business as usual. So, perhaps it is time to cut the whining which fundamentally signals that you think of the AoM meetings as mainly about your own on-the-job consumption.  It would have been much better to use energy spent on whining about diminished the consumption potential of Orlando on  critique of the conference theme.

17 August 2013 at 10:11 am 17 comments

Microfoundations Conference in Copenhagen, June 13-15, 2014

| Nicolai Foss |

Since the arguably first use of the “microfoundations” terminology in the context of macro management research in a 2005 Strategic Organization essay by Teppo Felin and me, the “microfoundations project” has gained considerable attention. Most recently, the Academy of Management Perspectives has featured a symposium on the subject with contributions from Sid Winter, Henrich Greve, Sid Winter, Andrew van de Ven, Jay Barney and Teppo, and Siegwart Lindenberg and me.  One notable development is that positions have converged somewhat; notably, earlier outspoken critics, such as Winter, now see merit in the project. Another notable development is that the whole thing is moving from the admittedly preachy phase towards more of a “doing” phase.

An indication of not only the influence but also the  acceptance of the project is that the Strategic Management Society now sponsors a “special conference” (so-called) in Copenhagen (specifically, at the Copenhagen Business School) on the subject of “Microfoundations for Strategic Management Research: Embracing Individuals.” FB page here.  A full program should be up soon, but let me anticipate this a bit by noting that we have a fabulous line-up with keynotes by Richard Rumelt, one of our field’s most important thought-leaders; Europe’s perhaps most currently influential economist, Ernst Fehr; and sociology heavy-weight Ron Burt. In addition we will have a debate on microfoundations between Teppo Felin, Russ Coff, Michael Jacobides and Rodolphe Durand; a panel on foresight with Giovanni Gavetti, Sid Winter and Dan Lovallo, and much other juice stuff!  

Paper proposals (5-7 pages) are due no later than December 5. (Check the conference site for instructions in a week or two).  Hope to see you in Copenhagen next year!

17 August 2013 at 9:41 am 3 comments

AoM Miscellany

| Peter Klein |

This week’s Academy of Management conference was fun and interesting, if overwhelming (over 12,000 nerds graced the Disney World resort hotels with their presence). A few post-conference links, thoughts, etc.

  • Twitter was a big deal. Check out the #AOM2013 hashtag for the stream. There was even an officially sponsored Tweet Up. I enjoyed playing along (as @petergklein) but am not totally clear how such a tool is best used during a conference.
  • I really enjoyed a Saturday morning session on “Opportunities: The State of the Debate” with me, Sharon Alvarez, Jay Barney, Dimo Dimov, Mike Wright, Devereaux Jennings, and Roy Suddaby. I was the odd man out, giving my usual shtick about how the concept of “opportunities” should be eliminated altogether — perhaps a bit cheeky given the session title, but YOLO, right? (My slides are here, though they make less sense without the accompanying patter.) Jay Barney started the session by stating that all the panelists, except me, agree that opportunities should be the unit of analysis in entrepreneurship research but that opportunities should not (necessarily) be regarded as “discovered,” but also created. By the end of the session, it seemed that all but one panelist rejected the discovery concept altogether, and most grudgingly admitted that maybe we could talk about entrepreneurs creating products and services, rather than creating “opportunities.” Anyway, a good time was had by all.
  • There were lots of other interesting sessions, too many to mention. Some have already been described below. The session on “Myths and Realities of Capitalism” was particularly, well, controversial.
  • Here’s a report on a session (that I missed) on translating research results into practice by engaging the media (via Dave Ketchen).

14 August 2013 at 5:40 pm 2 comments

More AoM PDWs

| Peter Klein |

There are too many good AoM sessions to mention them all — there’s even a Tweet Up for social-media freaks (hey, where’s the Insta-Slam?) — but I’ll mention two more Professional Development Workshops of interest:

Myths and Realities of Capitalism: Micro and Macro Perspectives
Session #609, Sunday, Aug 11 2013 4:30PM – 7:30PM at WDW Dolphin Resort in Asia 3

Organizer: Rajshree Agarwal, U. of Maryland
Speaker: John Allison, Cato Institute
Speaker: Yaron Brook, Ayn Rand Institute
Speaker: Paul Green, Morning Star
Speaker: Jay B Barney, Eccles School, U. of Utah
Speaker: Doug Kirkpatrick, Morning Star Institute
Speaker: Peter G Klein, U. of Missouri
Speaker: Edwin A. Locke, U. of Maryland, College Park
Speaker: John Sullivan, Center for International Private Enterprise
Organizer: Hildy Teegen, U. of South Carolina
Speaker: Paul E. Tesluk, U. of Buffalo

The theme of the 2013 Academy of Management Meetings is based on a call into question of the efficacy and merits of capitalism—and the free enterprise system that it entails. However, all of the economic systems in the world today represent varying degrees of free enterprise and government intervention. This PDW addresses the call of examining micro and macro perspectives on some of the myths and realities of capitalism. A critical and informed examination of perhaps the most foundational underpinning of business and management —voluntary trade among producers based on the premise of human rights to life, liberty and pursuit of happiness—is urgently called for. The PDW brings together micro and macro scholars within the Academy, along with leading businessmen and spokespersons from policy institutes. The format of the PDW allows for an articulation of premises that guide both micro individual behavior and macro institutional factors that are required for value creation under a capitalist system, and a discussion of the alleged virtues and vices of capitalism. The workshop is designed in four parts and is structured to provide workshop participants with the opportunity to learn from experts and each other and to co-develop relevant implications for management faculty around the world.

Entrepreneurial Opportunity—The State of the Debate and The Linkages to Management
Session #258, Saturday, Aug 10 2013 10:00AM – 12:00PM at WDW Swan Resort in Mockingbird 1

Chair: Robert Joseph Wuebker, U. of Utah
Discussant: Roy R Suddaby, U. of Alberta
Presenter: Jay B Barney, Eccles School, U. of Utah
Participant: David Audretsch, Indiana U., Bloomington
Presenter: Dimo Dimov, U. of Bath
Presenter: Sharon Alvarez, The Ohio State U.
Presenter: Peter G Klein, U. of Missouri
Presenter: Mike Wright, Imperial College London
Presenter: P. Devereaux Jennings, U. of Alberta

For more than two decades, the field of entrepreneurship has struggled to converge on a definition of a core distinction in the field—entrepreneurial opportunity. The recent publication of a series of reflection papers in the Academy of Management—along with the published reactions, comments on the reactions, and meta-commentary—highlight both the importance of this dialogue to the field and illuminate the competing and mutually exclusive perspectives on (1) the nature of entrepreneurial opportunity and (2) the importance of the debate itself. This workshop offers a structured discussion about the status of entrepreneurial opportunity with the individuals who are at the “sharp end” of the debate, and framed by the journal editors that are directly involved in promoting, framing, and shaping it. We accomplish this through a panel format in which we curate representative positions on the question of entrepreneurial opportunity. Each panelist will reflect on the historical and theoretical roots of their position; note key assumptions and important priors; and elucidate the consequences of each position on the research and teaching program for the field. Following our panel, editors from Academy of Management Journal and Organization Science will offer their perspective and lead a Q&A session between panelists and participants.

5 August 2013 at 10:54 pm Leave a comment


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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).