Property rights, entrepreneurship and coordination
AbstractThe notion of plan coordination enjoys a central place in the analysis of institutions and competitive market processes. The conventional wisdom is that institutions and policies vary in the extent to which they promote competition and how quickly and completely they bring individuals’ plans into closer coordination with one another. Kirzner has provided the most fully elaborated statement on the use of coordination as a positive analytical device for explaining market dynamics and as a normative criterion for evaluating economic policies. We identify the core propositions in his analysis that elucidate how economic coordination depends upon that most fundamental of market institutions – the system of private property rights. We also probe into Kirzner's claims about inherent limitations in our ability to compare the coordinative potential of alternative property rights systems. We unpack the consequences of these core propositions using the economic theory of property rights. We also examine Kirzner's assertion that dynamic competition – including Schumpeterian innovation – is necessarily coordinative in its market effects. We find that his argument rests on the implicit assumption that property rights remain constant during the process of market adjustment. We provide a case study of the advent of commercial aviation as a potential counterexample to his claims.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 88 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/jebo
Economic coordination; Property rights; Market process; Entrepreneurship;
Find related papers by JEL classification:
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D60 - Microeconomics - - Welfare Economics - - - General
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- P11 - Economic Systems - - Capitalist Systems - - - Planning, Coordination, and Reform
- P14 - Economic Systems - - Capitalist Systems - - - Property Rights
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