July, 2007

The Austrian Theory of the Firm: Retrospect and Prospect

  • Richard N. Langlois

Key materials
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Many Austrian ideas today are being extended by academics elsewhere in the academy, albeit not those in the mainstream of the economics profession. These literatures are burgeoning, and anyone interested in advancing an Austrian theory of the firm needs to pay attention to these literatures. The other important dimension of an Austrian theory of the firm is the importance of coordination, especially in the face of radical uncertainty and of tacit and localized knowledge. Here the landscape is more variegated. At the fringes of the profession not far from where Austrians stroll, there is some interest in these issues. The bad news is that these important ideas are still far from having been absorbed by the mainstream. The good news is that there is still much for Austrians to do, and to claim already to have done, in the theory of the firm.