Posts filed under ‘– Foss –’
Does Hayek Still Matter?
| Nicolai Foss |
I may be wrong, but I have the feeling that the thought of Friedrich von Hayek is receiving less and less attention. This worries me for personal reasons — I wrote my Master’s Thesis in economics in 1989 on Hayek’s business cycle theory, and his work has continuously served as an important source of inspiration to me (e.g., this paper) as well as to countless others — and for the reason that Hayek’s thought is too important to vanish in influence. (more…)
Unintended Consequences and the Social Sciences
| Nicolai Foss |
According to a prominent tradition in economics and classical liberal thought, the social sciences (particularly economics) are primarily concerned with explaining unintended phenomena, whether more temporary outcomes, such as market phenomena, or more permanent ones, such as institutions, in terms of the intentional actions of multiple interacting agents. In contrast, the social sciences are not really taken up with explaining individual action per se.
This is an understanding, or perhaps even doctrine, that is perhaps most famously associated with Hayek, but it has also been echoed by Ludwig Lachmann (among Hayek’s contemporaries) and by many modern Austrians, as well as by philosophers, notably Karl Popper, Michael Polanyi, and Edna Ullman-Margalitt, and (non-Austrian) economists such as Andrew Schotter (in his 1981 book on institutions). (Of course, the notion of unintended consequences itself is by no means unique to classical liberal economists but can be found in the thought of most major thinkers on social science and political philosophy).
However, there are several problems with the doctrine that the social sciences are mainly about unintended consequences. Here are two that seem to have not been previously noticed: (more…)
Conceptual and Theoretical
| Nicolai Foss |
A few days ago Peter drew attention to the misuse in many academic papers of the word “methodology” (which is too often used when authors really mean “method”).
My personal pet peeve is the misuse of the word “conceptual,” particularly by management scholars. What is usually meant is “theoretical” (in fact, the word is often used in a derogatory manner — “Ah, Prof. NN, well, he mainly [meaning ‘merely’] does conceptual work” — something I once overheard being said of myself (in spite of several recent empirical papers — grrrr …. )).
Of course, management scholars are sometimes taken up with analyzing concepts per se — such as discussing alternative notions of competitive advantage — but usually conceptul analysis is the business of philosophers, and few management scholars publish in Metaphysica and similar places. (However, those management scholars who in fact do wish to undertake “conceptual work” may be interested in this newly started journal).
Organizational Innovation
| Nicolai Foss |
Organizational economists, new institutional economics, contract theorists, etc. are taken up with assessing alternative feasible allocations of decision and income rights, contracts, governance structures and institutions in terms of their impact on value creation for a relevant social system, whether a dyad, a multi-person firm, an industry, or a whole economy.
However, they usually assume that the set of alternatives is given to the choosing agent or set of agents. For example, in the Grossman/Hart/Moore property rights view, agents may not entirely understand the sources of payoffs, but they know exactly how alternative allocations of property rights impact payoffs. Of course, this is entirely in line with what we — given Peter’s post on Lionel Robbins below — may call “Robbinsian maximizing” in which the discovery and/or creation of new alternatives is deliberately disregarded. (more…)
Citation Metrics Using Google Scholar
| Nicolai Foss |
Are you in the process of preparing for tenure, promotion or for applying for a new job? Do you, as is increasingly the norm, wish to include your citatation data? Are you concerned that some or perhaps many of the journals in which your work is cited are not ISI listed?
Then you may benefit from checking out Anne-Wil Harzing’s new software for analyzing Google Scholar citation data, Publish or Perish.
It produces a number of useful statistics, such as, obviously, total number of papers and citations, average citations, etc., but also, and less trivially, the important metrics for measuring an academic’s impact, such as Hirsch’s h-index (and its updated version that gives more weight to more recent papers).
My Redesigned Site
| Nicolai Foss |
Check it out. I have dropped the quasi-blog feature of the old version (I hadn’t maintained it for almost a year anyway), so now I can concentrate on O&M and this one. I will soon upload talks and work in progress.
More on Socialist Calculation
| Nicolai Foss |
In an excellent book review of GC Archibald’s Information, Incentives and the Economics of Control, Tyler Cowen raised a number of neglected points concerning the socialist calculation debate. (The review is published in the apparently now closed Journal of International and Comparative Economics 5: 243-249 (1995) and unfortunately isn’t online).
Cowen argued out that the victors in the socialist calculation debate “… have shied away from the hard questions,” and that it is necessary to “push the boundaries of the calculation argument.” For example, what if a dictator who has read Mises instructed his managers to compete as in a regular market economy (i.e., not as in an Oskar Lange-economy), with the dictator being the residual claimant monitor? Would that work? It might not — but that would primarily be because of excessive monitoring costs.
Cowen also indirectly questions the Misesian emphasis on calculating prices. Experience shows that socialist managers systematically set prices too low (because they can gain from creating excess demand, while they cannot gain from setting the right prices). But this would seem to presuppose that socialist “managers are in fact very good at calculating the proper price.” In other words, there is really no “calculational chaos,” as predicted by Mises.
Has Strategy Forgotten About Rivalry?
| Nicolai Foss |
Austrian economists and other “process economists” have often argued that what is (or at least was) called “competition” in mainstream/neoclassical/orthodox/etc. economics has rather little to do with the real phenomenon. Hayek made the point famously and forcefully in his 1946 essay, “The Meaning of Competition,” and several Austrians have echoed him since then. (The best study of the transformation of “competition” (particularly, “perfect competition”) into the opposite of competition is Frank Machovec’s 1995 book, Perfect Competition and the Transformation of Economics).
It seems that strategy scholars may also have forgotten about rivalry. (more…)
March & Simon: Early Socialist Calculation Revisionists
| Nicolai Foss |
It is now commonly recognized that the majority of the economics profession for about four decades held an erroneous view of the nature of the “socialist calculation debate.” In particular, the nature of the arguments put forward by Mises and Hayek were misconstrued.
Revisionism took off in the mid 1980s with the work of Peter Murrell (e.g., here) and Don Lavoie (e.g., here). From a mainstream perspective, Murrell argued that the Austrians had developed sophisticated insights in property rights economics and the agency problem and had applied these insights to the problem of socialist calculation. Lavoie highlighted the distintive Austrian knowledge argument in the calculation debate, in particular emphasizing Hayek’s contribution. A bit later, Salerno and others emphasized the distinctiveness of Mises’ contribution. Thus, whereas Mises stressed the need for a distributed process of entrepreneurial judgment in the context of a private ownership economy characterized by uncertainty, Hayek put more of an emphasis on the impossibility under socialism of harnessing and processing massive amounts of knowledge, particularly under dynamic conditions. (more…)
Process Explanation: What Is It, Really?
| Nicolai Foss |
As I have recounted on an earlier occasion (here), my interest in economics was, after about 1.5 years of a somewhat unsuccessful economics study, finally stimulated by discovering what may broadly be called “process approaches” to economics, particularly the work of Axel Leijonhufvud, and Austrian and evolutionary approaches. I was captivated by the claims inherent in these approaches of studying “real” market “processes” in “time,” taking account of “genuine uncertainty,” “surprises,” “ignorance,” etc. — all in contrast to the (I then thought) mindless neoclassical obsession with equilibrium states.
Clearly, the Austrian marketing effort seemed much superior to the mainstream one, much less dull and much more concerned with reality. (more…)
Pomo Periscope IX: Pomo in the US Campaign Season
| Nicolai Foss |
The first major viral video of the campaign season appears to be this one. Perhaps the most disturbing fact about Hillary is her continued use of the pomo lingo of “getting the conversation started.”
Economies of Scope?
| Nicolai Foss |
Yesterday’s WSJ features an article on economists’ consulting jobs with (UC Berkeley Professor — and CBS Honorary Doctor) David Teece playing the main role. The article notes that Teece “… doesn’t dispute estimates that his career earnings from expert consulting amount to at least USD 50 million.” Teece has done important work on the role that economies of scope play in explaining diversification (here and here). Is he living his own theory?
HT to Marginal Revolution.
Discover Who Is Citing You in Books
| Nicolai Foss |
We academics are a narcissisic bunch. I know colleagues who check their citations on Google Scholar or the SSCI on a weekly basis. Of course, I myself would never, ever indulge in such egocentric excesses!!! That being said, however, I am still mildly interested in who may think that my modest contributions are good enough to cite.
A constant source of irritation is that while it is rather easy to find out who is citing you in the journals, it is more difficult to find out who is citing you in books (this may not matter to deans and research bureaucrats, but it is still nice to know). Until, that is, I discovered books.google.com — which allows you to do exactly this! Enjoy!
New JC Spender Essay
| Nicolai Foss |
JC Spender is one of my favorite management thinkers. I may disagree with him, but he is usually challenging and very often profound (in contrast to some other management thinkers who have been discussed here at O&M). And he writes extremely well. JC has a new essay coming out in Journal of Management Inquiry, “Management as a Regulated Profession.” (It can also be downloaded from JC’s site). Much of the content of the paper is a discussion and diagnosis of the theory-practice gap, including pointing out that this discussion has been going for a very long time: “Redlich (1957) tells of the 19th-century German steel town that, its business failing, pressed the local business school principal to take charge. The business failed anyway, and he was put in jail — where he died — to ponder the gap between rigor and relevance. Deans beware!” (more…)
Management Journal Impact Factors 2005
| Nicolai Foss |
The 2006 figures aren’t there, but the 2005 ones are out on the Web of Science (SSCI) (you should be able to find these if your library has access to the Web of Science; look under “Journal Citation Reports”). (more…)
Pomo Periscope VIII: Jean Baudrillard “Dies”
| Nicolai Foss |
Apparently, it happened Tuesday last week, but I didn’t notice until this morning: Pomo-thinker Jean Baudrillard has fallen victim to the Keynesian long run (see this). Baudrillard became famous for his notion of hyper-reality, and for his habit of indicating the (media) manufactured nature of events by an extensive use of quotation marks (the most notorious example being the “Gulf War”). He was the author of sentences such as this one: “Perhaps history itself has to be regarded as a chaotic formation, in which acceleration puts an end to linearity and the turbulence created by acceleration deflects history definitively from its end, just as such turbulence distances effects from their causes” (quoted from this classic piece). And here is an example of a profound contribution to political philosophy: “All of our values are simulated,” he told the New York Times in 2005. “What is freedom? We have a choice between buying one car or buying another car? It’s a simulation of freedom.” The problem now is what to make of media reports of his death. A simulated reality?
TCE Workshop in Bergen, 15-16 November 2007
| Nicolai Foss |
In 2004, my colleagues at the Norwegian School of Economics and Business Administration, professors Sven Haugland and Svein Ulset, and I organized a “Nordic Workshop on Transaction Cost Economics in Business Administration.” Oliver Williamson and my co-blogger gave keynote speeches. The best papers, including a paper by Williamson, were published in a special issue of the Scandinavian Journal of Management in 2005.
With Professor Arne Nygaard, Sven Haugland and I now plan a new workshop, no longer “Nordic,” on the application of TCE in business administration. (more…)
New Foss Hobby Blog
| Peter Klein |
Tyler Cowen has his ethnic dining guide, Teppo Felin has his photography page, and now my co-blogger too has a hobby site: Jazz & Archtops. If you don’t know what an archtop is you’re probably not in the target demographic.
So, if you’ve been wondering why Nicolai doesn’t have time to blog more often on O&M, now you know!
(Looks like I need to add another entry to this list.)
ACAC 2007 — Submission Deadline Approaching
| Nicolai Foss |
I have attended only two truly excellent conferences. The first one was the 1997 inaugural conference for the International Society of New Institutional Economics. For me much of the excitement of that conference was seeing Ronald Coase, Oliver Williamson, Harold Demsetz, Mancur Olson, and other luminaries for the first time. To keep flight costs, my wife and I had to stay for 10 days in St. Louis, but it was worth it ;-)
The second truly excellent conference I have experienced was the 2005 ACAC which had an equally impressive line-up, only from strategic management, (e.g., Jay Barney, Kathleen Eisenhardt, Pankaj Ghemawat, etc.) as well as great papers and discussions. (more…)
Enacting Privatization
| Nicolai Foss |
Here at O&M we have often criticized and poked fun at ideas on social construction and their derived notions in management, such as Weickian “enactment.” Still, it is a fundamental tenet of classical liberalism that ideas matter and matter crucially (although some classical liberals, notably George Stigler, have argued that ideas matter much less than economists would like to think). One crucial area where ideas would seem to have mattered a great deal is privatization (a term that seems to have been invented by Peter Drucker).
In a paper, “Palace Wars and Privatization: Did Chicago Beat Cambridge in Influencing Economic Policies,” just published in the European Management Review, J. Muir McPherson adds to his earlier work with Bruce Kogut (this paper; for a related idea diffusion paper, see this), and examines the influence of “the epistemic community of American-trained economists” (based on the number of non-US, US and Chicago PhD degrees in a given country) on privatization policies. The dataset encompasses self-collected data on 13,422 economists. The statistical methodology is a hazard model. The results indicate a clear impact of the frequency of US-trained economists on the probability of privatization, but it is also noteworthy that among theUS economists, “As Chicago ideas won out . . . the difference between Chicago economics PhDs and graduates from other schools could no longer be detected from the general influence of US-trained economists on the decision to privatize.”
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