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Property rights, entrepreneurship and coordination

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  • Harper, David A.
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    The 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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    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 88 (2013)
    Issue (Month): C ()
    Pages: 62-77

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    Handle: RePEc:eee:jeborg:v:88:y:2013:i:c:p:62-77
    DOI: 10.1016/j.jebo.2011.10.018
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    1. Daniel B. Klein & Jason Briggeman, 2010. "Israel Kirzner on Coordination and Discovery," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 25(Spring 20), pages 1-53.
    2. Israel Kirzner, 1998. "Coordination as a Criterion for Economic “Goodness”," Constitutional Political Economy, Springer, vol. 9(4), pages 289-301, December.
    3. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135.
    4. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, Oxford University Press, vol. 122(4), pages 1561-1602.
    5. Peter Lewin, 1997. "Hayekian equilibrium and change," Journal of Economic Methodology, Taylor & Francis Journals, vol. 4(2), pages 245-266.
    6. Klein, Daniel & Orsborn, Aaron, 2009. "Concatenate coordination and mutual coordination," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 176-187, October.
    7. T. de Scitovszky, 1941. "A Note on Welfare Propositions in Economics," Review of Economic Studies, Oxford University Press, vol. 9(1), pages 77-88.
    8. Kirzner, Israel M, 1999. "Creativity and/or Alertness: A Reconsideration of the Schumpeterian Entrepreneur," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 11(1-2), pages 5-17.
    9. Gunning, J Patrick, 2000. "The Property System in Austrian Economics: Ronald Coase's Contribution," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 13(2), pages 209-220, September.
    10. Krecké Elisabeth, 2002. "The Role of Entrepreneurship in Shaping Legal Evolution," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(2), pages 1-18, June.
    11. Kirzner Israel M., 1999. "Hedgehog Or Fox? Hayek And The Idea Of Plan-Coordination," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 9(2-3), pages 1-22, June.
    12. M.J. Rizzo, 1992. "Equilibrium Visions," South African Journal of Economics, Economic Society of South Africa, vol. 60(1), pages 66-73, March.
    13. Whitman Douglas Glen, 2002. "Legal Entrepreneurship and Institutional Change," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(2), pages 1-13, June.
    14. Jakee, Keith & Spong, Heath, 2003. "Praxeology, Entrepreneurship and the Market Process: A Review of Kirzner's Contribution," Journal of the History of Economic Thought, Cambridge University Press, vol. 25(04), pages 461-486, December.
    15. Benson, Bruce L, 2002. "Regulatory Disequilibrium and Inefficiency: The Case of Interstate Trucking," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 229-255, June.
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