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‘Wresting meaning from the market’: a reassessment of Ludwig Lachmann's entrepreneur

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  • ENDRES, ANTHONY M.
  • HARPER, DAVID A.

Abstract

We undertake a close textual study of the entire corpus of Ludwig Lachmann's publications from 1936 to 1991 and demonstrate that his theory of entrepreneurial behaviour is sufficiently distinctive to warrant ranking alongside the theories of Schumpeter and Kirzner. Lachmann's entrepreneurs are creatively constructive change-agents who discover, exploit and create gaps in capital structures. Entrepreneurs select and interpret specific market and institutional phenomena using pre-existent rules and mental ‘instruments’, extract meaning about capital-forming opportunities, and generate all subsequent capital combinations. Lachmannian entrepreneurs are problem-solvers and communicate problem ‘solutions’ by dissolving and reforming capital combinations. We examine 20th-century Lachmannian research that builds on these foundations – research that emphasizes the institutional and material embeddedness of entrepreneurial behaviour and that appreciates the capacity of Lachmann's approach to explain entrepreneurial success, imitation and failure in a dynamic endogenous process. To underscore the distinctiveness of the Lachmannian entrepreneur, we compare it with Schumpeterian and Kirznerian approaches.

Suggested Citation

  • Endres, Anthony M. & Harper, David A., 2013. "‘Wresting meaning from the market’: a reassessment of Ludwig Lachmann's entrepreneur," Journal of Institutional Economics, Cambridge University Press, vol. 9(3), pages 303-328, September.
    • Handle: RePEc:cup:jinsec:v:9:y:2013:i:03:p:303-328_00
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    Cited by:

    1. Loïc Sauce, 2017. "Market process(es) and (un)knowledge," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(3), pages 305-321, September.
    2. Gilbert-Saad, Antoine & Siedlok, Frank & McNaughton, Rod B., 2018. "Decision and design heuristics in the context of entrepreneurial uncertainties," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 75-80.
    3. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269, December.
    4. Brendan Markey-Towler, 2018. "Antifragility, the Black Swan and psychology," Evolutionary and Institutional Economics Review, Springer, vol. 15(2), pages 367-384, December.
    5. Darcy W.E. Allen, 2019. "Governing the entrepreneurial discovery of blockchain applications," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 9(2), pages 194-212, October.
    6. Brendan Markey-Towler, 2018. "A formal psychological theory for evolutionary economics," Journal of Evolutionary Economics, Springer, vol. 28(4), pages 691-725, September.
    7. Peter Lewin & Nicolas Cachanosky, 2020. "Entrepreneurship in a theory of capital and finance—Illustrating the use of subjective quantification," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(5), pages 735-743, July.
    8. Lucas, David S. & Fuller, Caleb S. & Packard, Mark D., 2022. "Made to be broken? A theory of regulatory governance and rule-breaking entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 37(6).
    9. Paul Lewis, 2021. "Entrepreneurship, novel combinations, capital regrouping, and the structure-agency relationship: an introduction to the special issue on innovation and Austrian economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(1), pages 1-12, March.

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