Skip to main content
SpringerLink
Log in

The theory of the firm: The Austrians as precursors and critics of contemporary theory

  • Articles
  • Published:
The Review of Austrian Economics Aims and scope Submit manuscript

Conclusion

In the above, I have taken the theme of Austrian economics and economic organization through several variations. I hope to have taken steps towards establishing that not only were the Austrians important precursors of the contemporary theory of economic organization, but they may also contribute to existing theory as well as provide their distinctive perspective on economic organization. Space limitations have dictated, however, that I have been able to only scratch the surface. Assuredly, there is much more to be done on all the three themes I have been discussing, particularly on the last, constructive one.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Alchian, Armen A. 1984. “Specificity, Specialization, and Coalitions.”Journal of Institutional and Theoretical Economics 140: 34–49.

    Google Scholar 

  • Alchian, Armen A., and Harold Demsetz. [1972] 1977. “Production, Information Costs and Economic Organization.” In Armen A. Alchian,Economic Forces at Work. Indianapolis: Liberty Press.

    Google Scholar 

  • Alchian, Armen A., and Susan Woodward 1988. “The Firm is Dead; Long Live the Firm.”Journal of Economic Literature 26: 65–79.

    Google Scholar 

  • Barney, Jay B., and William G. Ouchi, eds. 1988.Organizational Economics. San Francisco: Jossey-Bass.

    Google Scholar 

  • Barzel, Yoram. 1987. “The Entrepreneur's Reward for Self-Policing.”Economic Inquiry 25: 103–16.

    Google Scholar 

  • Barzel, Yoram. 1989.Economic Analysis of Property Rights. Cambridge: Cambridge University Press.

    Google Scholar 

  • Boudreaux, Don, and Randall G. Holcombe. 1989. “The Coasian and Knightian Theories of the Firm.”Managerial and Decision Economics 10: 147–54.

    Google Scholar 

  • Buchanan, James M. 1969.Cost and Choice. Chicago: Markham.

    Google Scholar 

  • Cheung, S. N. S. 1983. “The Contractual Nature of the Firm.”Journal of Law and Economics 26: 1–22.

    Google Scholar 

  • Coase, Ronald H. 1937. “The Nature of the Firm.” In Barney and Ouchi 1988.

    Google Scholar 

  • —— 1960. “The Problem of Social Cost.”Journal of Law and Economics 3: 1–44.

    Google Scholar 

  • —— 1988. “The Nature of the Firm: Origin.”Journal of Law, Economics and Organization 4: 3–17.

    Google Scholar 

  • Demsetz, Harold. 1967. “Toward a Theory of Property Rights.” InOwnership, Control and the Firm. Oxford: Basil Blackwell.

    Google Scholar 

  • ——. 1969. “Information and Efficiency: Another Viewpoint.”Journal of Law and Economics 12: 1–22.

    Google Scholar 

  • ——. 1988. “The Theory of the Firm Revisited.”Journal of Law, Economics and Organization 4: 141–62.

    Google Scholar 

  • Douma, Sytse, and Hein Schreuder. 1991.Economic Approaches to Organizations. New York: Prentice Hall.

    Google Scholar 

  • Eggertson, Thráinn. 1990.Economic Behavior and Institutions. Cambridge: Cambridge University Press.

    Google Scholar 

  • Fama, Eugene F. 1980. “Agency Problems and the Theory of the Firm.”Journal of Political Economy 88: 288–307.

    Google Scholar 

  • Foss, Nicolai J. 1991. “The Suppression of Evolutionary Approaches in Economics: The Case of Marshall and Monopolistic Competition.”Methodus 3 (December): 65–72.

    Google Scholar 

  • —— 1993a. “More on Knight and the Theory of the Firm.”Managerial and Decision Economics 14 (July): 269–76.

    Google Scholar 

  • —— 1993b. “Theories of the Firm: Contractual and Competence Perspectives.”Journal of Evolutionary Economics 3 (June): 127–44.

    Google Scholar 

  • ——. 1993c. “The Two Coasian Traditions.”Review of Political Economy 4 (December): 508–32.

    Google Scholar 

  • Grossman, Sanford J., and Oliver D. Hart. 1986. “The Costs and Benefits of Ownership.”Journal of Political Economy 94: 671–719.

    Google Scholar 

  • Hayek, Friedrich A. von. 1931.Prices and Production. London: Routledge.

    Google Scholar 

  • ——. 1935a. “Socialist Calculation I: The Nature and History of the Problem.” In Hayek 1948.

    Google Scholar 

  • ——. 1935b. “Socialist Calculation II: The State of the Debate.” In Hayek 1948.

    Google Scholar 

  • ——. 1937. “Economics and Knowledge.” In Hayek 1948.

    Google Scholar 

  • ——. 1940. “Socialist Calculation III: The Competitive Solution.” In Hayek 1948.

    Google Scholar 

  • ——. 1941.The Pure Theory of Capital. Chicago: University of Chicago Press.

    Google Scholar 

  • ——. 1945. “The Use of Knowledge in Society.” In Hayek 1948.

    Google Scholar 

  • ——. 1948.Individualism and Economic Order. Chicago: University of Chicago Press.

    Google Scholar 

  • ——. [1968] 1978. “Competition as a Discovery Procedure.” InNew Studies in Philosophy, Politics, Economics and the History of Ideas. Chicago: University of Chicago Press.

    Google Scholar 

  • ——. 1973.Law, Legislation and Liberty. Vol. 1: Rules and Order. Chicago: University of Chicago Press.

    Google Scholar 

  • Hodgson, Geoffrey. 1988.Economics and Institutions. Oxford: Polity Press.

    Google Scholar 

  • Holmström, Bengt R., and Jean Tirole. 1989. “The Theory of the Firm.” InHandbook of Industrial Organization. R. Schmalensee and R. D. Willig, eds. Amsterdam: North-Holland.

    Google Scholar 

  • Ikeda, Sanford. 1990. “Market Process Theory and ‘Dynamic’ Theories of the Market.”Southern Economic Journal 57: 75–92.

    Google Scholar 

  • Jensen, M., and W. Meckling. 1976. “The Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure.” In Barney and Ouchi 1988.

    Google Scholar 

  • Kirzner, Israel M. 1973.Competition and Entrepreneurship. Chicago: University of Chicago Press.

    Google Scholar 

  • —— 1979.Perception, Opportunity and Profit. Chicago: University of Chicago Press.

    Google Scholar 

  • Knight, Frank H. [1921] 1965.Risk, Uncertainty and Profit. New York: Augustus M. Kelley.

    Google Scholar 

  • —— [1924] 1952. “Some Fallacies in the Interpretation of Social Cost.” InReadings in Price Theory. G. J. Stigler and K. E. Boulding, eds. Chicago: Richard D. Irwin.

    Google Scholar 

  • Lachmann, Ludwig M. 1971.The Legacy of Max Weber. London: Heinemann.

    Google Scholar 

  • —— 1986.The Market As An Economic Process. Oxford: Basil Blackwell.

    Google Scholar 

  • Lange, Oskar. 1938. “On the Economic Theory of Socialism.” InOn the Economic Theory of Socialism. B. Lippincott, ed. St. Paul: University of Minnesota Press.

    Google Scholar 

  • Langlois, Richard N., ed. 1986.Economics as a Process: Essays in the New Institutional Economics. Cambridge: Cambridge University Press.

    Google Scholar 

  • ——. 1991. “Institutions.” InAustrian Economics: Tensions and New Directions. Bruce Caldwell and Stephan Böhm, eds. Dordrecht: Kluwer.

    Google Scholar 

  • Lavoie, Don. 1985.Rivalry and Central Planning: The Socialist Calculation Debate Reconsidered. Cambridge: Cambridge University Press.

    Google Scholar 

  • Littlechild, Stephen C. 1986. “Three Types of Market Process.” In Langlois 1986.

    Google Scholar 

  • Loasby, Brian J. 1989.The Minds and Methods of Economists. Cambridge: Cambridge University Press.

    Google Scholar 

  • Machlup, F. 1967. “Theories of the Firm: Marginalist, Behavioral, Managerial.”American Economic Review 57: 1–33.

    Google Scholar 

  • McNulty, Paul J. 1984. “On the Nature and Theory of Economic Organization: The Role of the Firm Reconsidered.”History of Political Economy 16: 233–53.

    Google Scholar 

  • Malmgren, H. B. 1961. “Information, Expectations and the Theory of the Firm.”Quarterly Journal of Economics 75: 399–421.

    Google Scholar 

  • Menger, Carl. [1871] 1976.Principles of Economics. New York: New York University Press.

    Google Scholar 

  • —— [1883] 1963.Problems of Economics and Sociology. Urbana: University of Illinois Press.

    Google Scholar 

  • Milgrom, Paul. 1988. “Employment Contracts, Influence Activities and Efficient Organization Design.”Journal of Political Economy 96: 42–60.

    Google Scholar 

  • Milgrom, Paul, and John Roberts. 1992.Economics, Organization, and Management. New York: Prentice-Hall.

    Google Scholar 

  • Minkler, Alanson P. 1991. “The Problem With Knowledge: An Essay on the Theory of the Firm.” Manuscript. University of Connecticut: Department of Economics.

  • Mises, Ludwig von. [1920] 1990.Economic Calculation in the Socialist Commonwealth. Auburn, Ala.: Ludwig von Mises Institute.

    Google Scholar 

  • ——. [1936] 1981.Socialism. Indianapolis: Liberty Press.

    Google Scholar 

  • ——. 1945.Bureaucracy. London: William Hodge.

    Google Scholar 

  • ——. 1949.Human Action: A Treatise on Economics. London: William Hodge.

    Google Scholar 

  • Nelson, Richard R. 1981. “Assessing Private Enterprise: An Exegesis of Tangled Doctrine.”Bell Journal of Economics 12: 93–111.

    Google Scholar 

  • Nelson, Richard R., and Sidney G. Winter. 1982.An Evolutionary Theory of Economic Change. Cambridge, Mass.: Belknap Press.

    Google Scholar 

  • O'Driscoll, Gerald P. and Mario Rizzo. 1985.The Economics of Time and Ignorance. Oxford: Basil Blackwell.

    Google Scholar 

  • Penrose, Edith T. 1959.The Theory of the Growth of the Firm. Oxford: Oxford University Press.

    Google Scholar 

  • Ricketts, Martin 1987.The Economics of Business Enterprise. Brighton, England: Wheatsheaf Books.

    Google Scholar 

  • Rothbard, Murray N. [1962] 1970.Man, Economy, and State. Vol. 2. Los Angeles: Nash.

    Google Scholar 

  • Salerno, Joseph T. 1990. “Ludwig von Mises as Social Rationalist.”Review of Austrian Economics 4: 26–54.

    Google Scholar 

  • Silver, Morris. 1984.Enterprise and the Scope of the Firm. Aldershot: Martin Robertson.

    Google Scholar 

  • Simon, Herbert A. 1979. “Rational Decision Making in Business Organizations.”American Economic Review 69: 493–513.

    Google Scholar 

  • —— 1991. “Organizations and Markets.”Journal of Economic Perspectives 5: 25–44.

    Google Scholar 

  • Thomsen, Esteban F. 1989.Prices and Knowledge: A Market-Process Perspective. Doctoral Dissertation. New York University.

  • Vaughn, Karen I. 1982. “Does it Matter That Costs are Subjective?”Southern Economic Journal 49 (December): 702–15.

    Google Scholar 

  • Williamson, Oliver E. 1975.Markets and Hierarchies. New York: Free Press.

    Google Scholar 

  • —— 1985.The Economic Institutions of Capitalism. New York: Free Press.

    Google Scholar 

  • —— 1991. “Economic Institutions: Spontaneous and Intentional Governance.”Journal of Law, Economics and Organization 7: 159–87.

    Google Scholar 

  • Witt, Ulrich. 1987. “How Transaction Rights Are Shaped to Channel Innovativeness.”Journal of Institutional and Theoretical Economics 143: 180–95.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. the Institute of Industrial Economics and Strategy at the Copenhagen Business School, Denmark

    Nicolai Juul Foss (assistant professor of economics)

Authors
  1. Nicolai Juul Foss
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

A number of excellent comments from Murray Rothbard and three anonymous referees is gratefully acknowledged. All remaining errors are the author's.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Foss, N.J. The theory of the firm: The Austrians as precursors and critics of contemporary theory. Rev Austrian Econ 7, 31–65 (1994). https://doi.org/10.1007/BF01102135

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF01102135

Keywords

Search

Navigation