Two strategic perspectives are analyzed, the neoclassical microeconomic perspective (using the Ricardo-Marshall approach to rent) and the Market Process perspective (using the Fetter approach to rent). In a neoclassical world, rents indicate "unsolved" or unexploited "inefficiencies" as every hypothetical outcome is viewed against the standard of perfect competition. By contrast, in the market process world there is no single ideal standard by which to measure any particular outcome. All action takes place in an open ended universe in which the future is continually being created, in which, competition is a "discovery process." A market process approach is not only more "realistic," it is better suited to the Resource-Based Theory of corporate and business strategy. 3 Rent and Resources: A market process perspective Introduction: Resource Based Theory and Rents The new resource based theory (RBT) of the firm relies, in many ways, on economic foundations. It takes as its point of d...

Introduction: The Absence of an Austrian Theory of the Firm? There has been much conversation recently about the absence of an Austrian theory of the firm and suggestions for remedying the situation (for example, Foss, 1994, 1997b, Sautet, 1999). It is not self evident that Austrian economics needs a theory of the firm - it is quite possible that the definitive theory exists outside of Austrian economics. Nor is it obvious what that theory might look like. In this paper we contend however that, in fact, there is an incipient Austrian theory of the firm that does add something to the existing theories. The nature of that theory is suggested by the very relationship that existing theories of the firm bare to the foundational body of theory out of which they arose and to which they are continually looking. To be more specific, the seminal contribution to the theory of the firm by Coase (1937), which belatedly spurned an incredibly large (and still

Abstract. The modern Theory of the Firm uses the concept of rent and makes implicit assumptions about equilibrium. An Austrian (Market Process) Theory of the Firm should have something to say about each of these. Two strategic perspectives are analyzed, the neoclassical microeconomic perspective (using the Ricardo-Marshall approach to rent) and the Market Process perspective (using the Fetter approach to rent). In a neoclassical world, rents indicate “unsolved ” or unexploited “inefficiencies ” as every hypothetical outcome is viewed against the standard of perfect competition. By contrast, in the Market Process world there is no single ideal standard by which to measure any particular outcome. All action takes place in an open ended universe in which the future is continually being created, in which competition is a “discovery process.” JEL classification: L1. Introduction: The Absence of an Austrian Theory of the Firm? There has been much conversation recently about the absence of an Austrian theory of the firm and suggestions for remedying the situation (for example, Foss 1994, 1997b, Sautet (forthcoming)). It is not self evident that Austrian economics needs a theory of the firm—it is quite possible that the definitive theory exists outside of Austrian economics. Nor is it

Abstract. This paper traces the idea of Capital from Adam Smith to modern times and shows how different conceptions of Capital give rise to different approaches to economics and the range of problems that can be investigated. A structural, as opposed to a stock, approach to Capital is shown to be more conducive to a studies of business institutions and practices, and to rules, institutions and standards in a changing world. Key Words: Capital, structure, stock, aggregation, theory of the firm, economic growth, production function