Book contents
- Re-Understanding Entrepreneurship
- Re-Understanding Entrepreneurship
- Copyright page
- Contents
- Figures
- Preface
- Part I The Nature of Knowledge and Entrepreneurship
- Part II Entrepreneurs in Market Theories
- 5 The Two Paradigms of the Market
- 6 What Is a Good Market Theory?
- 7 Entrepreneurship Is the Best Anti-monopoly Law
- 8 Entrepreneurial Profit and Common Prosperity
- Part III Uncertainty of Innovation and Industrial Policy
- Part IV Institutional Ecology of Entrepreneurship
- Book part
- References
- Index
5 - The Two Paradigms of the Market
from Part II - Entrepreneurs in Market Theories
Published online by Cambridge University Press: 02 May 2024
- Re-Understanding Entrepreneurship
- Re-Understanding Entrepreneurship
- Copyright page
- Contents
- Figures
- Preface
- Part I The Nature of Knowledge and Entrepreneurship
- Part II Entrepreneurs in Market Theories
- 5 The Two Paradigms of the Market
- 6 What Is a Good Market Theory?
- 7 Entrepreneurship Is the Best Anti-monopoly Law
- 8 Entrepreneurial Profit and Common Prosperity
- Part III Uncertainty of Innovation and Industrial Policy
- Part IV Institutional Ecology of Entrepreneurship
- Book part
- References
- Index
Summary
There are two major paradigms of the market: the neoclassical static equilibrium theory and the Austrian School (and Schumpeterian) dynamic non-equilibrium theory. The most important difference between the two is their different understandings of the entrepreneur’s status and function in the market. The market in neoclassical economics is a market without entrepreneurs. On the contrary, entrepreneurs are central to the market in Austrian School economics and Schumpeterian economics. The neoclassical model is not a good market theory and its market failure theory is wrong. By placing entrepreneurs at the center of the market, the Austrian School of economics provides a better understanding of the market. This chapter also points out the eight paradoxes of the neoclassical model. These eight paradoxes show that neoclassical economics totally distorts our understanding of the real market.
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- Re-Understanding EntrepreneurshipWhat It Is and Why It Matters, pp. 77 - 95Publisher: Cambridge University PressPrint publication year: 2024