Quarterly Journal of Austrian Economics

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The Division of Labor and the Firm: An Austrian Attempt at Explaining the Firm in the Market

The Quarterly Journal of Austrian Economics

Tags Production Theory

07/30/2014Per Bylund

Volume 14, Number 2

 

This paper reviews Austrian approaches to the firm and drafts a theory that emphasizes the firm as a market phenomenon. Here the firm is a vehicle for imaginative entrepreneurs to create artificially high factor density, thereby increasing its internal "extent of the market" to support specialization of factors beyond the general level of division of labor in the market. The firm therefore becomes a product of, and prospective catalyst for progressing the market's overall division of labor, and the firm emerges as a entrepreneur-generated means toward increased efficiency and more roundabout production. It consequently may play a crucial role in the evolution of market structure and, by extension, the development of civilization.

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Contact Per Bylund

Per Bylund, PhD, is a Senior Fellow of the Mises Institute and Associate Professor of Entrepreneurship and Johnny D. Pope Chair in the School of Entrepreneurship in the Spears School of Business at Oklahoma State University, and an Associate Fellow of the Ratio Institute in Stockholm. He has previously held faculty positions at Baylor University and the University of Missouri. Dr. Bylund has published research in top journals in both entrepreneurship and management as well as in both the Quarterly Journal of Austrian Economics and the Review of Austrian Economics. He is the author of three full-length books: How to Think about the Economy: A Primer, The Seen, the Unseen, and the Unrealized: How Regulations Affect our Everyday Lives, and The Problem of Production: A New Theory of the Firm. He has edited The Modern Guide to Austrian Economics and The Next Generation of Austrian Economics: Essays In Honor of Joseph T. Salerno. He has founded four business startups and writes a column for Entrepreneur magazine. For more information see PerBylund.com.

Cite This Article

Bylund, L. Per. "The Division of Labor and the Firm: An Austrian Attempt at Explaining the Firm in the Market." The Quarterly Journal of Austrian Economics 14, No 2 (Summer 2011): 188-215.