Chapter 8: Entrepreneurship and the International Business System: Developing the Perspective of Schumpeter and the Austrian School
8.1 INTRODUCTION The Annual Conference of the Academy of International Business for 1998 was held in Vienna. The conference provided a useful opportunity to examine the contribution to IB studies of two major schools of economic thought which have their intellectual roots in Vienna – the Schumpeterian school and the Austrian school. As the capital of the Austro-Hungarian empire and a hub of East–West European diplomacy and trade, turn-of-the-century Vienna was a major cultural centre, which attracted many gifted intellectuals (including many recently emancipated Jews). It is not altogether surprising, therefore, that Vienna incubated not merely one but two important schools of economic thought. Although founded at the end of the nineteenth century, these schools retain considerable intellectual vitality at the beginning of the twenty-ﬁrst century. The schools are today regarded as ‘heterodox’ because they reject some of the more restrictive assumptions of the orthodox neoclassical approach to economics. However, as emphasized in Chapters 4 and 5, some of the more restrictive assumptions of the neoclassical approach are quite unnecessary, and indeed are very unhelpful when analysing institutional issues. By relaxing some of the less important and more restrictive neoclassical assumptions, propositions similar to those advanced by the Schumpeterian and Austrian schools begin to emerge within the neoclassical approach. This suggests that Schumpeterian and Austrian approaches are fundamentally more orthodox than they often appear. They are also more similar to one another than they sometimes appear. Proponents of a heterodox view often stress the differences, not only between their...
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