Quarterly Journal of Austrian Economics

Quarterly Journal of Austrian Economics 19, no. 1 (Spring 2016): 3–28

ABSTRACT: Ludwig von Mises developed the theory of economic calculation in the context of his argument that the central planning of socialism cannot make economizing decisions concerning the use of resources in a division of labor economy. Focus on the problem of allocating resources in society led to a stress on the calculation used by entrepreneurs in making production decisions. Theory concerning other facets of economic calculation used by entrepreneurs in making investment decisions, i.e., decisions concerning the economizing combination of assets an entrepreneur should own in his enterprise, for instance, was left relatively underdeveloped. The purpose of this paper is to further explore the implications of Mises’s theory of economic calculation for asset acquisitions and disposals, especially the acquisition and disposal of entire business enterprises. In particular the paper seeks to demonstrate that the subjective approach to investment appraisal developed in the German-language, business-management literature is compatible with Austrian value theory.

KEYWORDS: value of the firm, appraisement, investment appraisal, value theory, subjectivism, Austrian school, neoclassicism

JEL CLASSIFICATION: B31, B41, B53, G32