capitalist_and_entrepreneur_klein

21
terminology). 17 is does not imply, however, that all decisions must
be made from the top; we can agree with the market-based management
literature that “neither central planning nor command-and-control are the
defining characteristics of a business firm” (Ellig, 1993, p. 11). Indeed,
given competition in the product and factor markets, firms will always
tend to select the optimum amount of “market-like” features. e firm’s
problem, then, is not too much “conscious” planning; the crucial issue
is whether these plans are made, and tested, from within a larger market
setting. e entrepreneur’s plans can be carried out, as we saw above, only
when there are definite markets for all internally traded goods or activities.
What firms need is not necessarily internal markets, but the information
generated by market prices.
Conclusion
is chapter has highlighted some Austrian contributions to the theory
of the firm and suggested directions for future research along the same
lines. In particular, Rothbard’s argument about the need for markets in
intermediate goods, and how that places limits on the scale and scope of
the organization, deserves further development. e chapter also points
the way toward an Austrian approach that makes the entrepreneur, and
his acts of resource allocation using monetary calculation, central to the
theory of the firm.
17 See also Tullock (1969).