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Entrepreneurship is the engine of economic progress, but mainstream economic models of economic growth tend to leave out the entrepreneurial elements of the economy. This new book from Randall Holcombe begins by identifying areas in which evolutionary and Austrian approaches differ from the academic mainstream literature on economic growth, before moving on to distinguish growth from progress. The author then analyzes economic models of the firm based on the idea that it is entrepreneurship that drives economic progress. The book should prove to be a natural successor to recent Routledge books by Frederic Sautet and David Harper.
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Entrepreneurship and Economic Progress Economic progress is often analyzed narrowly as income growth, but this volume shows that other aspects of progress – new and improved goods, and improved methods of production – are ultimately more significant. Not only have these other dimensions of progress been responsible for much of the increase in human welfare, they are also what drives income growth. Progress is the result of entrepreneurship, and both entrepreneurship and this broader conception of progress have been neglected in contemporary economic analysis. This volume develops a framework that demonstrates how entrepreneurship produces economic progress, and contrasts that framework with the mainstream theory of economic growth. The contrast is interesting from an academic perspective, but there are also significant differences in policy implications. The policy conclusions of mainstream economic growth theory focus on investment in physical and human capital and on technological improvements, whereas this volume’s approach shows that an institutional structure that promotes entrepreneurship is the crucial factor that produces economic progress. Entrepreneurship and Economic Progress discusses the institutional features that promote entrepreneurship and draws on historical examples from the twentieth century to illustrate its major points. Randall G. Holcombe is DeVoe Moore Professor of Economics at Florida State University, USA. Routledge Foundations of the Market Economy Edited by Mario J. Rizzo New York University Lawrence H. White University of Missouri at St. Louis A central theme in this series is the importance of understanding and assessing the market economy from a perspective broader than the static economics of perfect competition and Pareto optimality. Such a perspective sees markets as causal processes generated by the preferences, expectations, and beliefs of Economic agents. The creative acts of entrepreneurship that uncover new information about preferences, prices, and technology are central to these processes with respect to their ability to promote the discovery and use of knowledge in society. The market economy consists of a set of institutions that facilitate voluntary cooperation and exchange among individuals. These institutions include the legal and ethical framework as well as more narrowly “economic” patterns of social interaction. Thus the law, legal institutions, and cultural and ethical norms, as well as ordinary business practices and monetary phenomena, fall within the analytical domain of the economist. Previous books in this series include: The Meaning of Market Process Essays in the development of modern Austrian economics Israel M. Kirzner Prices and Knowledge A market-process perspective Esteban F. Thomas Keynes’ General Theory of Interest A reconsideration Fiona C. Maclachlan Laissez-Faire Banking Kevin Dowd Expectations and the Meaning of Institutions Essays in economics by Ludwig Lachmann Edited by Don Lavoie Perfect Competition and the Transformation of Economics Frank M. Machovec Entrepreneurship and the Market Process An enquiry into the growth of knowledge David Harper Economics of Time and Ignorance