Austrian Economics and Organizational Entrepreneurship: A Typology

Abstract

This article develops a typology for making sense of the numerous strands of Austrian (and Austrian-related) economics and demonstrates how this typology can guide organizational entrepreneurship scholars wishing to ground their research in Austrian thought. In the process, not only are existing insights from the history of Austrian economic thought rediscovered, but clearer light is also shed on important perspectives from that tradition that have received less attention in entrepreneurship research. Based on the Austrian concept of entrepreneurial production and its relationship with the core concepts of knowledge and change, the typology yields four perspectives—equilibration, punctuated equilibrium, disequilibration, and punctuated disequilibrium. These perspectives’ different paradigms as used in organizational research are explored, along with their ontological, epistemological, and methodological assumptions. The typology is illustrated with selected empirical examples from organizational research to spotlight the types of questions that contemporary scholars may appropriately ask and answer from each perspective.

Man of Action: Murray N. Rothbard’s Contributions to the Theory of Entrepreneurship

“…In short, the ERE is a theoretical abstraction in which value scales, technologies, and original resources remain unchanged. In this state, action persists, but the economy "rotates" because there is no reason to change previous decisions; the dynamism of the market process that brings uncertainty disappears (see also Elias et al 2020 for a comparison between the ERE and other equilibrium and equilibrium-like constructs). Rothbard (2009, 356, 510), possibly misunderstanding Mises (1998, 246), says that markets tend toward the ERE but never reach it.…”

“…Entrepreneurship scholars will benefit from knowing about the Rothbardian approach and should consider how it can guide their theoretical developments and reshape their practical conclusions. Authors such as Salerno (2008) and Peter Klein (N. Foss and Klein 2010, 2012, 2020Klein 2010Klein , 2017 have continued the theoretical development of the capitalist-entrepreneur, which Salerno calls the "integral entrepreneur" (Salerno 2008, 190). Consequently, the judgment-based approach (e.g., N. Bylund ( , 2020aBylund ( , 2022.…”

A strategic marketing perspective on entrepreneurs & innovation

“…Innovation is impossible without an actor, a decision maker, an entrepreneur. In order to present the aforementioned framework, the first step is to depart from the Evenly Rotating Economy (ERE), a theoretical situation in which there is no innovation because there is no change in the preference of the individuals and the resources are kept the same (Elias, Chiles, Li, & D'Andrea, 2020;. From that point on, the entrepreneurs will use their organizations to implement their plans.…”

Why startups fail in emerging entrepreneurial ecosystems?

“…Entrepreneurial judgment and especially action (Foss & Klein, 2012 are what will give rise to innovation. In a broad sense, entrepreneurs are innovators (Bylund, 2016) who may copy existing solutions, spreading their adoption to previously untouched areas of the market, or mainly that commercialize market breakthroughs (Bylund, 2020;D' Andrea & Mazzoni, 2019;Elias et al, 2020).…”