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Knowledge and Power in the Mechanical Firm: Planning for Profit in Austrian Perspective

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  • Richard P. Adelstein

    (Department of Economics, Wesleyan University)

Abstract

This essay draws on the transaction costs model of the firm and an Austrian perspective on the knowledge problem in centrally planned orders to propose an empirically useful Austrian theory of central planning. Afteran initial review of existing theories of the firm, part two develops insights from the calculation debate to sketch a theory of planning centered on the interrelated problems of purpose, information and control in both individual and central planning. Part three joins this theory to the basic framework of the transaction cost model to produce an Austrian theory of the private firm that addresses the relation between knowledge and power in planned orders, and illustrates its principal themes through a discussion of the historical development of American manufacturing in the fifty years prior to World War I.

Suggested Citation

  • Richard P. Adelstein, 2003. "Knowledge and Power in the Mechanical Firm: Planning for Profit in Austrian Perspective," Wesleyan Economics Working Papers 2005-015, Wesleyan University, Department of Economics.
    • Handle: RePEc:wes:weswpa:2005-015
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    theories of the firm; production contracts; central planning systems; scientific management;
    All these keywords.

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform

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