Institutions are the formal or informal 'rules of the game' that facilitate economic, social, and political interactions. These include such things as legal rules, property rights, constitutions, political structures, and norms and customs. The main theoretical insights from Austrian economics regarding private property rights and prices, entrepreneurship, and spontaneous order mechanisms play a key role in advancing institutional economics. The Austrian economics framework provides an understanding for which institutions matter for growth, how they matter, and how they emerge and can (...) change over time. Specifically, Austrians have contributed significantly to the areas of institutional stickiness and informal institutions, self-governance and self-enforcing contracts, institutional entrepreneurship, and the political infrastructure for development. (shrink)

This article reinterprets Schumpeter’s theory of entrepreneurship in a decidedly un-“Schumpeterian” way, and argues that continued emphasis on Schumpeter’s alleged glorification of the entrepreneur constitutes a missed opportunity for democratic critics of capitalism and neoliberalism. I demonstrate that Schumpeter did not exalt the individual entrepreneur as the paradigm for economic and political leadership in capitalist societies, and I show that he offers a surprisingly robust resource for reconceptualizing entrepreneurship. Schumpeter theorized entrepreneurship: as a phenomenon that could not be exemplified by (...) either individual persons or strictly private entities; as a conceptual mechanism for analyzing change in the history of capitalism; and even as evidence that political and economic leadership should not be conflated in modern democratic societies. By contextualizing Schumpeter’s discussions of the entrepreneur, I suggest that a reconsideration of Schumpeter’s actual theory of entrepreneurship would invigorate contemporary debates about the role of leadership in capitalist economies and liberal-democratic polities. (shrink)

ABSTRACTA close reading of Capitalism, Socialism and Democracy underscores Schumpeter's critique of elite political capacities. Given the neglect of this critique in contemporary scholarship, it might warrant a revision of our understanding of “Schumpeterianism.” To notice the critique of elites, we need to read Part IV in the context of the work as a whole, and with greater sensitivity to the sarcasm, irony, and humor that permeate the book. Such a reading produces a fundamentally altered understanding of Schumpeter's contribution to (...) democratic theory. (shrink)