Elements of Entrepreneurial Expertise
New Horizons in Entrepreneurship series
Chapter 9: Philosophy and Methodology of Effectual Economics
9. Philosophy and methodology of eﬀectual economics Eﬀectuation is a logic for practicing entrepreneurship as a method and studying it as a science of the artiﬁcial. In Chapter 3, I deﬁned a logic as an internally consistent set of criteria that forms a clear basis for action upon the world. Of course, that is not the only possible deﬁnition of logic. There are as many mathematical and other types of logics today as there are algebras and geometries and philosophies. But that was not always the case. In 1914, ﬂushed with the completion of the monumental Principia Mathematica four years earlier, Russell proclaimed, ‘Logic is the essence of philosophy’. At the time, it appeared as though some things had been resolved for all time to come. As Barrett (1978) points out, mathematical logic became a sort of pons asinorum, a bridge one had to cross to get to real estate of any value at all in areas of intellectual development. However, in one of those twists in the history of ideas, that seemingly solid bridge dissolved in the later work (Philosophical Investigations) of Russell’s most brilliant student Wittgenstein, who, in his earlier work, Tractatus LogicoPhilosophicus, actually tried to cross it to reach the promised land. Russell himself reversed his position to conclude that logic is always insuﬃcient and that every logic needs a philosophy. In his dedication to Models of Discovery, Simon quoted Carnap to argue for science what Barrett argues for logic: that...