Academic journal article Journal of Community Positive Practices

Digging among the Roots of Entrepreneurship

Academic journal article Journal of Community Positive Practices

Digging among the Roots of Entrepreneurship

Article excerpt

Abstract. Without claiming to be an exhaustive exposition of two of the most important perspectives in the field of entrepreneurship studies, this paper points out some key distinctions between the Austrian Economics and Schumpeterian perspectives on the process of entrepreneurship. It employs a comparative approach and addresses point by point the nature of entrepreneurial opportunities, the sources of uncertainty in the initialization of entrepreneurial action, the process of competition and its role in the market as well as the relationship between entrepreneurship and knowledge. The article examines the importance attributed by these two perspectives to the socio-economic environment in which entrepreneurial activity arises, instead of focusing directly on their exclusively economic aspects.

Keywords: Austrian Economics; Schumpeter; Subjectivism; Knowledge.

I. Introduction

Many recent papers are dedicated to entrepreneurship and its role in economic growth. It is often approached as a type of panacea solution. Furthermore, it is also viewed as the key answer promoted for changing mentalities, attitudes or the quality of life for nations as a whole. How did the process of consolidation of the main concepts form the entrepreneurship field look? Which were the main features of the individual entrepreneur in some of the classic texts of the field? When we look inside of Schumpeter's work can we still label him as Austrian or should we make a clear distinction between Schumpeter's and Austrian perspectives on entrepreneurship? These are the types of questions that were the underlying reasons for choosing the topic for the current article. Keeping in mind the space limitations, the article tries to provide some answers to all of them.

With a focus on opportunities and knowledge, this article aims to point out a few essential differences between two of the most important contributions to the study of entrepreneurship. There is no unitary perspective on entrepreneurship within Austrian economics1, so the approach used in this paper is composed of many fragments of various perspectives. Some approaches within the school do complement one another, and where possible these will be presented as such. In this way, preserving the characteristics of individual thought within Austrian economics, emphasis will be given to the distinctiveness and variety of this body of thought on entrepreneurship in contrast with the more unified nature of the Schumpeterian perspective.

Making a short excursus into the history of Austrian economics, the paper will address the subjectivist way in which Carl Menger influenced the methods of theorizing human action. According to Kirzner (1992) Menger made a significant imprint on the perspectives used and promoted firstly by Eugen von Böhm- Bawerk and Friedrich von Wieser and later developed by Ludwig von Mises and Friedrich von Hayek. This line of thought also had a substantial influence on authors such as Israel Kirzner, Ludwig Lachmann and Lawrence White. The way in which Austrian economics consistently emphasizes the importance of individual action in the initiation, maintenance and completion of entrepreneurial activity later influenced the way in which one important school of thought was developed, namely new economic sociology (Boettke and Storr, 2002; Fillieule, 2010). Economic sociology is one of the main perspectives concerned with entrepreneurial behaviors. This perspective is built on the legacy of sociologists and economists such as Weber [1930] (2001), Schumpeter (1934, 1939), Parsons and Smelser (1957), etc., and it has been recently reconfigured in papers authored by Swedberg and Smelser (1994), Swedberg (2002), Portes (2010), etc. Another important scholar in this field is Granovetter (1985, 2001, 2002) who was concerned with the relationship between social structure and economic performance. In order to do relate social structure and economic performance, Granovetter pointed out the analytic relevance of concepts such as: social networks, embeddedness, oversocialization and undersocialization. …

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