Ronald Coase on the paramount role of property rights in resource allocation
19 Oct 2014 Leave a comment
Robert Nozick explains the market process
11 Oct 2014 Leave a comment
in Austrian economics, Rawls and Nozick Tags: market process, Robert Nozick
Consider the sheer number of transactions and people involved in economic arrangements
30 Sep 2014 Leave a comment
Henry Simons on the advantages of the market as an allocation and distribution mechanism
29 Sep 2014 Leave a comment
Barriers to entry alert: do late entrants have a chance
22 Sep 2014 Leave a comment
in applied price theory, Austrian economics, economic history, entrepreneurship, industrial organisation, liberalism, technological progress Tags: Austrian economics, barriers to entry, creative destruction, Israel Kirzner, market process
September 21, 1999 – Google came out of beta; the 17th search engine to officially enter the market.
Kirzner defines a competitive market as a market where no potential participant faces non-market obstacles to entry:
Following a long tradition in economics going back at least to Adam Smith, Austrians define a competitive market not as a situation where no participant or potential participant has the power to make any difference, but as a market where no potential participant faces nonmarket obstacles to entry.
(The adjective “nonmarket” refers, primarily, to government obstacles to entry; it is used to differentiate such obstacles from, for example, high production costs that might discourage entry. These latter do not constitute noncompetitive elements in a market; to be able to enter means to be able to enter a market if one judges such entry to be economically promising-it does not mean to be able to enter without having to bear the relevant costs of production.) That is, a situation is competitive if no incumbent participant possesses privileges that protect him against the possible entry of new competitors.
The achievements that free markets are able to attain depend, in the Austrian view, on freedom of entry, that is, on the absence of privilege.
Marvellously simple explanation of the beauty and power of the market process
15 Aug 2014 Leave a comment
Ronald Coase and the preoccupation with monopoly
23 May 2014 Leave a comment
in industrial organisation, law and economics, Ronald Coase Tags: market process, monopoly
One important result of this preoccupation with the monopoly problem is that if an economist finds something—a business practice of one sort or other—that he does not understand, he looks for a monopoly explanation. And as in this field we are very ignorant, the number of ununderstandable practices tends to be rather large, and the reliance on a monopoly explanation, frequent.
After this foray written in 1971, Coase went further in an appreciation written for George Stigler’s Nobel Prize in 1982:
…for reasons which are not altogether clear to me, it is a field [of industrial organisation] which has come to concentrate on The Monopoly Problem and, more specifically in the United States, on the problems thrown up by the administration of the antitrust laws.
The result has not been a happy one for economics.
By concentrating on the problem of monopoly in dealing with an economic system which is, broadly speaking, competitive, economists have had their attention misdirected and as a consequence they have left unexplained many of the salient features of our economic system or have been content with very defective explanations.
Utopia, you are standing in it! 
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