The Austrian School in the USA: Institutions and Entrepreneurship

The development of the Austrian School of EconomicsAustrian School of Economics since the South Royalton Conference in 1974 has branched out in several directions. During the conference, three major areas of contention arose: the role of the entrepreneur, the relationship between economic calculation and knowledge problems, and the role of money in banking. In this chapter, we focus on the first two of these areas. We leverage Don Lavoie’s[aut]Don Lavoie analysis of two visions of planning that societies can pursue. The first vision of planning is the attempt to plan human society by using the state as a mechanism of central planning. The alternative vision is for human society to use the market mechanism to coordinate the disparate plans of millions of individuals. This latter system utilizes the knowledge of the participants embodied in market signals to allocate resources toward desired ends. These alternative visions of society are grounded in different institutional arrangements. We engage in comparative analysis of these institutions, and the knowledge they generate, to discuss modern Austrian contributions by studying attempts to engage in large-scale projects of non-comprehensive planning. Further, we consider how these alternative institutional arrangements affect and are affected by the entrepreneur. In doing so, we attempt to highlight a clearer understanding of the role of the entrepreneur in economic development.