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Assessing Private Enterprise: An Exegesis of Tangled Doctrine

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  • Richard R. Nelson

Abstract

This paper proposes that the twin theorems of welfare economics provide an insubstantial basis for the faith of many economists that private enterprise is a good way of organizing production. Most economists implicitly recognize this. A reading of the literature in advocacy of private enterprise suggests that administrative parsimony, responsiveness, and innovativeness often are ascribed as virtues of the enterprise form of economic organization. The argument that private enterprise has these virtues has, however, no basis in orthodox microeconomic theory. This essay is concerned with considering arguments for those alleged virtues, and sketching some of the theoretical and empirical questions that are opened when these are scrutinized.

Suggested Citation

  • Richard R. Nelson, 1981. "Assessing Private Enterprise: An Exegesis of Tangled Doctrine," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 93-111, Spring.
  • Handle: RePEc:rje:bellje:v:12:y:1981:i:spring:p:93-111
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    References listed on IDEAS

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    1. Samet, Dov & Tauman, Yair, 1982. "The Determination of Marginal Cost Prices under a Set of Axioms," Econometrica, Econometric Society, vol. 50(4), pages 895-909, July.
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    Cited by:

    1. Stavros Ioannides, 2000. "Austrian Economics, Socialism and Impure Forms of Economic Organisation," Review of Political Economy, Taylor & Francis Journals, vol. 12(1), pages 45-71.
    2. Pelikan, Pavel, 1985. "Private Enterprise vs. Government Control: An Organizationally Dynamic Comparison," Working Paper Series 137, Research Institute of Industrial Economics.
    3. Pelikan, Pavel, 1986. "The Formation of Incentive Mechanisms in Different Economic Systems," Working Paper Series 155, Research Institute of Industrial Economics.
    4. Radislav Jovovic, 2005. "The Distincs Differences Between Old And Emerging Economy," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 1(1), pages 139-150.
    5. Pelikan, Pavel, 1989. "Markets as Instruments of Evolution of Structures," Working Paper Series 237, Research Institute of Industrial Economics.
    6. Grosfeld, Irena, 1990. "Reform Economics and Western Economic Theory: Unexploited Opportunities," Economic Change and Restructuring, Springer, vol. 23(1), pages 1-19.
    7. Christian Schubert, 2012. "Is novelty always a good thing? Towards an evolutionary welfare economics," Journal of Evolutionary Economics, Springer, vol. 22(3), pages 585-619, July.
    8. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, Elsevier.
    9. Steven Klepper & Sally Sleeper, 2005. "Entry by Spinoffs," Management Science, INFORMS, vol. 51(8), pages 1291-1306, August.
    10. David Audretsch & Roy Thurik, 0000. "Sources of Growth," Tinbergen Institute Discussion Papers 97-109/3, Tinbergen Institute.
    11. Peter Murrell, 1991. "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 59-76, Fall.
    12. Audretsch, D.B. & Thurik, A.R., 2000. "What's New About the New Economy? Sources of growth in the managed and entrepreneurial economies," ERIM Report Series Research in Management ERS-2000-45-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    13. Sahin, Izzet & Zahedi, Fatemeh (Mariam), 2000. "Optimal policies under risk for changing software systems based on customer satisfaction," European Journal of Operational Research, Elsevier, vol. 123(1), pages 175-194, May.
    14. Pelikan, Pavel, 1986. "How Do New Technologies Fare under Different Institutional Rules?," Working Paper Series 169, Research Institute of Industrial Economics.
    15. Mark Blaug, 2001. "Is Competition Such a Good Thing? Static Efficiency versus Dynamic Efficiency," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(1), pages 37-48, August.
    16. Gallacher, Marcos & Goetz, Stephan J. & Debertin, David L., 1994. "Managerial form, ownership and efficiency: a case-study of Argentine agriculture," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 11(2-3), December.
    17. Christian Schubert, 2014. "“Generalized Darwinism” and the quest for an evolutionary theory of policy-making," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 479-513, July.
    18. Dolfsma, Wilfred, 2005. "Towards a dynamic (Schumpeterian) welfare economics," Research Policy, Elsevier, vol. 34(1), pages 69-82, February.
    19. Breznitz, Dan & Zehavi, Amos, 2010. "The limits of capital: Transcending the public financer-private producer split in industrial R&D," Research Policy, Elsevier, vol. 39(2), pages 301-312, March.

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