Mark Casson’s The Entrepreneur at 30

6 June 2014 at 10:42 pm Peter G. Klein 2 comments

| Peter Klein |

2012 marked the 30th anniversary of Mark Casson’s classic work The Entrepreneur: An Economic Theory. Casson was one of the first economists since Frank Knight to elaborate on the role that uncertainty and judgment play in entrepreneurial decisions. Casson’s book offers not only a critique of the theories of competition and the firm offered in neoclassical microeconomics, but also a positive theory of the entrepreneur as a judgmental decision-maker under uncertainty. Casson’s work had a strong influence on the Foss-Klein approach to entrepreneurship, as well as Dick’s work on the theory of the firm.

Sharon Alvarez, Andrew Godley, and Mike Wright have written a nice tribute to The Entrepreneur in the latest edition of the Strategic Entrepreneurship Journal.

Mark Casson’s The Entrepreneur: An Economic Theory (1982) has become one of the most influential books in the field of entrepreneurship. For the first time, this article outlines its origins and summarizes its main themes. The article goes on to show how Casson’s subsequent research has closely followed the research agenda he set for himself in The Entrepreneur and illustrates the continuing challenge his work presents to entrepreneurship scholars. The article is based on an interview the authors conducted with Mark Casson on the thirtieth anniversary of the book’s publication.

As Sharon, Andrew, and Mike note, “Casson’s incorporation of Knightian judgment into a broader economic framework is probably the area where the book has had its greatest impact (albeit mostly among management scholars and not economists).” For Casson — as well as Knight — judgment constitutes decision-making under uncertainty that cannot be captured in a set of formal decision rules, such that “different individuals, sharing similar objectives and acting under similar circumstances, would make different decisions” (Casson, 1982, p. 21). Unfortunately, while judgment continues to play an important role in entrepreneurship research, it has been largely overshadowed (in my reading) by the opportunity-discovery perspective that builds on Kirzner rather than Knight (though that perspective is itself coming under heavy fire).

The paper is gated, unfortunately. But you can access Casson’s own summary of his (and others’) ideas in this EconLib article.

Entry filed under: - Klein -, Entrepreneurship, People, Recommended Reading, Theory of the Firm.

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2 Comments Add your own

1. genghiscunn | 18 June 2014 at 11:53 pm

Casson’s book offers “a positive theory of the entrepreneur as a judgmental decision-maker under uncertainty.” And uncertainty is everywhere: the main thing we know about the future is that it will surprise us. Over many centuries, any attempt to forecast the longer term future would have been wrong. Hence in the CAGW context, for example, I have long argued that, whether or not prophecies of doom turn out to be correct, the best policies are those which encourage entrepreneurial, innovative behaviour and flexibility, building a capacity to deal better with whatever befalls. This is unlikely to be promoted by the rigid, centrally-directed, deterministic policies based on long-term projections which tend to be adopted in response to alleged CAGW.

Michael Cunningham, Brisbane
2. andrewdsmith | 16 July 2014 at 3:07 am

Reblogged this on The Past Speaks and commented:
I find that I’m citing Mark Casson with increasing frequency, so I thought I would re-post Peter Klein’s interesting blog post about Casson’s ideas.

Someone once said to me that Casson would have received the Nobel Prize already if he were American. I don’t know if that’s true, but he is certainly a major figure in a number of fields.