WEBVTT

NOTE The Firm as Extra-Market Specialization

1
00:00:00.000 --> 00:00:03.960
Those of you who were here in this room for the last session,

2
00:00:03.960 --> 00:00:07.120
you were here for my application of what I'm going to show you now.

3
00:00:07.120 --> 00:00:12.680
So this is where you will actually learn what the heck I was talking about last time.

4
00:00:12.680 --> 00:00:14.680
Hopefully, I would say.

5
00:00:14.680 --> 00:00:20.280
So in this presentation, I will tell you a little bit about my inspiration for this.

6
00:00:20.280 --> 00:00:23.160
And I'm developing an Austrian theory of the firm.

7
00:00:23.160 --> 00:00:25.120
And let me see here.

8
00:00:25.120 --> 00:00:26.960
None of my competitors are here.

9
00:00:26.960 --> 00:00:30.960
The Austrian Theory of the Firm

10
00:00:30.960 --> 00:00:34.960
Anyway, my inspiration for developing this theory

11
00:00:34.960 --> 00:00:38.960
then I will show you the model for

12
00:00:38.960 --> 00:00:42.960
what the firm is, where it comes from, what it does,

13
00:00:42.960 --> 00:00:46.960
why are there firms, basically, and then the implications of this theory

14
00:00:46.960 --> 00:00:50.960
and the conclusion. Now you can see why it's very

15
00:00:50.960 --> 00:00:54.960
different from the previous talks.

16
00:00:54.960 --> 00:01:02.960
So for the inspiration, the transaction cost view is probably the most dominant view out there.

17
00:01:02.960 --> 00:01:08.960
It says, listen to this, it says that there are costs to transacting in the market.

18
00:01:08.960 --> 00:01:10.960
Who would have thought?

19
00:01:10.960 --> 00:01:14.960
Well, this is actually kind of a new thing in neoclassical economics.

20
00:01:14.960 --> 00:01:20.960
And the theory basically says that since it's costly to find people to trade with,

21
00:01:20.960 --> 00:01:23.960
it's costly to find the right products and so forth,

22
00:01:23.960 --> 00:01:43.960
Sometimes it's easier to rely on authority in a firm, so basically the theory says that the firm is a small state, where the owner of the firm or the entrepreneur or the manager is simply directing resources, and he's a slave owner more or less.

23
00:01:43.960 --> 00:01:51.960
Now, in the transaction cost view of the firm, there are two people who are really the big stars.

24
00:01:51.960 --> 00:01:59.960
You have Ronald Coase and Oliver Williamson. Both got Nobel Prizes for basically the same work.

25
00:01:59.960 --> 00:02:03.960
Well, not exactly the same, but the same kind of work.

26
00:02:03.960 --> 00:02:09.960
So, I'll tell you a little bit about what Ronald Coase says and what Oliver Williamson says.

27
00:02:09.960 --> 00:02:18.120
and they would say that they're compatible but I would say that they're not and of

28
00:02:18.120 --> 00:02:25.360
course I said firms here are hierarchies they're based on authority the market is

29
00:02:25.360 --> 00:02:37.420
horizontal and and well so Ronald Coase his main thing was to identify that

30
00:02:37.420 --> 00:03:07.420
There are costs to using the price mechanism, it's just, it's not totally free to go out there and look for goods, look for labor workers, contract with people, I mean, I don't have to explain this, we all know this, it's pretty obvious, right? If nothing else, it's going to take a little time to find these people, right? Now, he identified the firm as an island of conscious power,

31
00:03:07.420 --> 00:03:11.420
Which goes back to the hierarchy, the authority-based firm.

32
00:03:11.420 --> 00:03:23.420
The entrepreneur or manager, the role of this guy, he uses this word, the entrepreneur, which is nothing even close to what we would call an entrepreneur as Austrians.

33
00:03:23.420 --> 00:03:31.420
What it means is a manager, or maybe a president in the state.

34
00:03:31.420 --> 00:03:38.420
And he identifies that there are two different ways of organizing production in the market.

35
00:03:38.420 --> 00:03:47.420
Either horizontally through contracting, or just trading, or hierarchically within a firm, through authority.

36
00:03:47.420 --> 00:03:51.420
Those are the two different ways.

37
00:03:51.420 --> 00:03:58.420
And the firm exists simply because you get around the problem with cost of transaction in the market.

38
00:03:58.420 --> 00:04:04.420
It is cheaper, basically, with socialism, because you just point and people run that way.

39
00:04:04.420 --> 00:04:08.420
Directing is cheaper than actually trading with them.

40
00:04:08.420 --> 00:04:14.420
You can see why I also claim Ronald Coase is a socialist. And Walter Block, by the way.

41
00:04:14.420 --> 00:04:20.420
Well, Walter Block claims he's a socialist.

42
00:04:20.420 --> 00:04:28.980
Okay, so part of Ronald Coase's theory is basically that you can

43
00:04:28.980 --> 00:04:34.740
instantaneously switch between market organizing and firm organizing. So there

44
00:04:34.740 --> 00:04:40.100
is no difference in how you do things contracting in the market and how you do

45
00:04:40.100 --> 00:04:44.660
things within the firm. The only difference is the guy with the mustache

46
00:04:44.660 --> 00:04:50.140
directing resources within the firm. That's the only difference. Now Oliver

47
00:04:50.140 --> 00:05:00.680
Dr. Williamson, he says, I agree with Coase. Same definition, and same reasoning, basically.

48
00:05:00.680 --> 00:05:04.720
But he bases it on asset specificity, saying that, hey, wait a minute, resources aren't

49
00:05:04.720 --> 00:05:13.740
exactly the same always, which is also no surprise, but it's also a new thing for neoclassicals.

50
00:05:13.740 --> 00:05:18.900
What he says is that if you have a transaction between two parties, and one of them will

51
00:05:18.900 --> 00:05:25.700
People have to invest in a resource that is very specific for this transaction.

52
00:05:25.700 --> 00:05:30.060
Imagine a coal mine and a transportation firm.

53
00:05:30.060 --> 00:05:36.460
If you will need to invest in a railroad to that coal mine, then after you have invested

54
00:05:36.460 --> 00:05:42.380
in building this railroad, the coal miners can just say, nah, we're not going to use

55
00:05:42.380 --> 00:05:45.980
you unless you lower your price drastically.

56
00:05:45.980 --> 00:05:54.140
Which means that there is a hold-up problem, which is the basis for Williamson's theory.

57
00:05:54.140 --> 00:05:59.980
You would never make this investment at all, because the other guy will just screw with

58
00:06:01.480 --> 00:06:05.380
So the only solution is to integrate within a firm and have one guy with a mustache instead

59
00:06:05.380 --> 00:06:14.380
of two.

60
00:06:14.380 --> 00:06:18.700
So in the market you would simply not have this transaction at all.

61
00:06:18.700 --> 00:06:22.620
You can only do it within a firm because everybody will go, no, I'm not investing.

62
00:06:22.620 --> 00:06:24.700
So it would never happen at all.

63
00:06:24.700 --> 00:06:26.940
But that's not what Coase says at all.

64
00:06:26.940 --> 00:06:30.980
Coase says that it's the same thing and depending on how costs change a little bit, just switch

65
00:06:30.980 --> 00:06:32.780
back and forth.

66
00:06:32.780 --> 00:06:35.860
Firm, market, firm, market.

67
00:06:35.860 --> 00:06:39.500
That's not possible for Williamson because he says either there's a firm or there's nothing

68
00:06:39.500 --> 00:06:41.060
at all.

69
00:06:41.060 --> 00:06:50.620
So the firm must be different from the market.

70
00:06:50.620 --> 00:06:59.660
Now that made me think what is different with firms and markets, right?

71
00:06:59.660 --> 00:07:07.620
And if it's a very specific asset for this transaction that makes it be a firm to Williamson,

72
00:07:07.620 --> 00:07:13.180
Then, aren't firms more highly specialized than the market?

73
00:07:13.180 --> 00:07:20.060
Boehm would probably say no, even though his theory says yes, it's really strange, but

74
00:07:20.060 --> 00:07:24.940
I say yes, there are differences and a firm is more specialized.

75
00:07:24.940 --> 00:07:31.100
So let's walk, I'll walk you through my model and show you what a firm is and where it comes

76
00:07:31.100 --> 00:07:32.820
from.

77
00:07:32.820 --> 00:07:34.900
So the model.

78
00:07:34.900 --> 00:07:40.580
So I start from the same point of view, the same point where both Coes and Williamson

79
00:07:40.580 --> 00:07:45.820
start, especially Coes, what do they call atomistic competition, which really means

80
00:07:45.820 --> 00:07:52.820
that everybody is self-employed, running around trading and that's it. You don't have any

81
00:07:52.820 --> 00:07:58.520
very advanced production structures or anything like that. It's a one-man show and they trade

82
00:07:58.520 --> 00:08:07.800
with Others. It's a bunch of crusos, if you like. Now, I assume that you will have greater

83
00:08:07.800 --> 00:08:12.680
efficiency through the Division of Labor. It shouldn't be a very provocative statement,

84
00:08:12.680 --> 00:08:20.880
but you never know. I presented this to mainstream economists, and it's not always the case that

85
00:08:20.880 --> 00:08:50.880
I really agree with this, it really terrifies me, but that's another matter, okay, so I really just, I talked about this before, so let's just jump into the model right away, so what I say, what I assume here, from the beginning, atomistic competition,

86
00:08:50.880 --> 00:08:57.160
You cannot specialize what you do more than anybody else.

87
00:08:57.160 --> 00:08:59.920
If you specialize and you make a very, very small thing,

88
00:08:59.920 --> 00:09:03.240
very, very specific thing, then you

89
00:09:03.240 --> 00:09:06.720
have to find someone who can use this little thing.

90
00:09:06.720 --> 00:09:09.320
Otherwise, there's no point in doing it.

91
00:09:09.320 --> 00:09:12.360
So if everybody's running around trading with each other,

92
00:09:12.360 --> 00:09:15.960
everything needs to be compatible.

93
00:09:15.960 --> 00:09:22.960
Otherwise you can't trade with anyone and so we will all starve.

94
00:09:22.960 --> 00:09:27.400
So there has to be some kind of level of specialization in society, in the market, or at least in the

95
00:09:27.400 --> 00:09:32.560
part of market which we look at right now.

96
00:09:32.560 --> 00:09:40.800
So we would have necessarily the case that each factor, be it, thinking about it as a

97
00:09:40.800 --> 00:09:45.760
labor factor is probably easier than anything else, but the specialization level has to

98
00:09:45.760 --> 00:09:49.320
You can't be basically the same as the standard in the market.

99
00:09:49.320 --> 00:09:51.040
You can't be very unique.

100
00:09:51.040 --> 00:09:55.760
If you're very unique but you can't buy inputs from anyone because that wouldn't make you

101
00:09:55.760 --> 00:09:59.840
unique, you can't sell your outputs to anyone because that wouldn't make you unique.

102
00:09:59.840 --> 00:10:00.840
It's impossible.

103
00:10:00.840 --> 00:10:02.680
You would be incompatible with everybody.

104
00:10:02.680 --> 00:10:08.640
You would have to find an island because you are the Robinson Crusoe, basically.

105
00:10:08.640 --> 00:10:19.560
So in this starting point, we would have the case that the market for each factor is basically

106
00:10:19.560 --> 00:10:21.560
endless.

107
00:10:21.560 --> 00:10:29.700
What I'm saying here is that the number of little n is the minimum number of buyers and

108
00:10:29.700 --> 00:10:32.280
sellers that are available to you.

109
00:10:32.280 --> 00:10:43.280
The maximum available to you is basically endless, because you have this standardized level of specialization.

110
00:10:43.280 --> 00:10:52.280
Everybody can trade with everybody, so everybody would be infinite basically, at least to an economist.

111
00:10:52.280 --> 00:10:58.280
So you would have this kind of graph for a factor.

112
00:10:58.280 --> 00:11:05.280
What I'm saying here is that you have the market size, the number of people that you can buy from and sell to,

113
00:11:05.280 --> 00:11:12.280
which is this axis here. You have your specialization level on this axis here.

114
00:11:12.280 --> 00:11:19.280
And what I'm saying is that if you specialize further than this market standard level,

115
00:11:19.280 --> 00:11:28.280
Your market, the numbers of buyers and sellers that you can trade with, will very quickly diminish and go almost to zero.

116
00:11:28.280 --> 00:11:37.280
Of course, if you specialize to a lesser degree, well, down here you would find Robinson Crusoe doing everything for himself.

117
00:11:37.280 --> 00:11:43.280
Then, why would anyone trade with you? Because you're so freaking inefficient.

118
00:11:43.280 --> 00:11:52.280
And everything you do is too expensive, so why would they trade with you? They would trade with someone else, right? Someone who's more efficient in doing what he does.

119
00:11:52.280 --> 00:12:07.280
So if you specialize a lot, that would make you really efficient at what you do, but your market would go to zero. You would be totally alone in what you do.

120
00:12:07.280 --> 00:12:27.280
and I say this is si, little si, is the specialization level for that factor and it is here the specialization standard level in the market plus your specific deviation from that standard, be it positive or negative, it doesn't matter.

121
00:12:27.280 --> 00:12:39.680
So, if we look at this model, you can't really specialize alone, right?

122
00:12:39.680 --> 00:12:46.440
If you do that, you're going to starve to death, which would be pretty stupid, and which

123
00:12:46.440 --> 00:12:55.360
I guess would be, evolutionarily speaking, no offense to anyone, then the stupid people

124
00:12:55.360 --> 00:13:00.080
would specialize and die off, so we would only have smart people, which means the world

125
00:13:00.080 --> 00:13:07.640
would be libertarian, which is a good thing, but economically speaking, specializing is

126
00:13:07.640 --> 00:13:16.640
not a good idea. But what if they co-specialize? If I work with Matt and we say, hey, why don't

127
00:13:16.640 --> 00:13:22.320
we specialize together and do something that we can use standardized inputs that are available

128
00:13:22.320 --> 00:13:27.160
in the market, produce standardized outputs that are compatible with the market, but we

129
00:13:27.160 --> 00:13:33.000
do something that no one else does, just simply because we work together. We divide the task

130
00:13:33.000 --> 00:13:42.000
into smaller tasks. The tasks are not compatible with the market, but the totality is.

131
00:13:42.000 --> 00:13:52.520
So we have this formalization of this. This is me. This is math. This is the degree to

132
00:13:52.520 --> 00:13:58.360
which we specialize that is in addition to the market standard level. And of course it's

133
00:13:58.360 --> 00:14:10.000
greater than zero. Now the effect of this is that for us two, we can trade with a minimum

134
00:14:10.000 --> 00:14:13.120
of one with each other, right?

135
00:14:14.840 --> 00:14:18.920
And the maximized level here will go to one, two,

136
00:14:18.920 --> 00:14:22.600
depending on what the way we're looking at it, right?

137
00:14:22.600 --> 00:14:26.640
So we would have high complementarity with what we produce.

138
00:14:26.640 --> 00:14:30.320
Because what I produce, only Matt can use.

139
00:14:30.320 --> 00:14:35.280
What Matt produces is dependent only on what I do.

140
00:14:35.280 --> 00:14:37.680
So we have to go together, right?

141
00:14:40.000 --> 00:14:44.000
So what we do here, is we take in a production process,

142
00:14:44.000 --> 00:14:47.000
if we think about a little more advanced market,

143
00:14:47.000 --> 00:14:52.000
where you have three tasks to produce something that is directly consumable.

144
00:14:52.000 --> 00:14:56.000
We divide the middle task into smaller tasks

145
00:14:56.000 --> 00:15:00.000
that are not really compatible with anybody else to trade with.

146
00:15:00.000 --> 00:15:04.000
Think of an easy example, growing corn.

147
00:15:04.000 --> 00:15:08.000
Now you put the seeds in the ground, you water the stuff,

148
00:15:08.000 --> 00:15:19.000
Well, what you can do is find people who are really, really good at going to the river and getting water, and people who are really, really good at spreading water over ground.

149
00:15:19.000 --> 00:15:30.000
Well, so you divide the watering task, which used to be one person, into two or three people who are really, really good at those small things, very specific things.

150
00:15:30.000 --> 00:15:32.000
They get really efficient at doing that.

151
00:15:32.000 --> 00:15:41.840
at doing that. Stupid example, I agree, but it tells the story pretty clearly. So what

152
00:15:41.840 --> 00:15:53.340
you would have here is a situation where we would have to coordinate because we're incompatible

153
00:15:53.340 --> 00:16:00.640
with the market as it is. But how do we do that? That's the question, right?

154
00:16:00.640 --> 00:16:06.800
So what I'm saying is, of course, that the entrepreneur does this.

155
00:16:06.800 --> 00:16:11.340
So let's test if this is compatible with transaction cost theory.

156
00:16:11.340 --> 00:16:16.880
Now first of all, the market is just one standard level of specialization, that's a little bit

157
00:16:16.880 --> 00:16:18.160
too much maybe.

158
00:16:18.160 --> 00:16:22.400
So let's think about it as a range instead, where you can specialize a little bit up and

159
00:16:22.400 --> 00:16:26.420
down depending on who you meet and talk to and everything, because we're not exactly

160
00:16:26.420 --> 00:16:28.060
the same.

161
00:16:28.060 --> 00:16:35.580
So the market level where you're still compatible with everybody else is S plus or minus F,

162
00:16:35.580 --> 00:16:39.660
which is the minimum or maximum.

163
00:16:39.660 --> 00:16:46.780
Now in this case, transaction cost, that is finding someone to trade with, negotiating

164
00:16:46.780 --> 00:16:52.060
with people, that cost would increase the further from S you go, right?

165
00:16:52.060 --> 00:17:03.060
You have most people along the standard. If you specialize a lot further, the number of people you have to find to trade with will diminish.

166
00:17:03.060 --> 00:17:08.060
You will still find them, probably, but the transaction cost will increase.

167
00:17:08.060 --> 00:17:21.060
Now, this would seem to corroborate transaction cost theory, because why would you specialize further, because your transaction cost would go up, you had to do something else, right?

168
00:17:21.060 --> 00:17:31.060
And specializing to a lower degree than the standard level would mean that you're less efficient, which is stupid.

169
00:17:31.060 --> 00:17:43.060
So there are really no incentives at all for labor factors to specialize outside of this scope, this range.

170
00:17:43.060 --> 00:17:48.060
It just doesn't happen. Like I said before, they would starve to death.

171
00:17:48.060 --> 00:17:50.860
and they would try not to specialize close

172
00:17:50.860 --> 00:17:52.700
to the limits of this range either

173
00:17:53.580 --> 00:17:56.580
because the transaction costs are too high.

174
00:17:56.580 --> 00:17:58.540
You wouldn't find anyone to trade with.

175
00:17:58.540 --> 00:18:01.820
Or only three people instead of three billion.

176
00:18:01.820 --> 00:18:03.340
I mean, why would you do that?

177
00:18:06.180 --> 00:18:08.980
So, what are the implications of this?

178
00:18:08.980 --> 00:18:10.220
Let's have a look at this.

179
00:18:13.980 --> 00:18:15.060
Already?

180
00:18:15.060 --> 00:18:16.620
I'm gonna take more time, sorry.

181
00:18:16.620 --> 00:18:22.540
So, think about an entrepreneur who imagines a new way of doing things.

182
00:18:22.540 --> 00:18:24.980
Think about the watering.

183
00:18:24.980 --> 00:18:29.260
He realizes, hey, if I have one guy making the bucket, one guy going to the river, one

184
00:18:29.260 --> 00:18:34.340
guy filling the bucket, maybe that's more efficient.

185
00:18:34.340 --> 00:18:37.540
So he imagines this new structure.

186
00:18:37.540 --> 00:18:39.020
He establishes it.

187
00:18:39.020 --> 00:18:47.020
He has to own and risk capital of his own and he has to coordinate this whole thing

188
00:18:48.020 --> 00:18:54.020
because the labor factors wouldn't do it themselves and of course they wouldn't even know what he's imagined, right?

189
00:18:55.020 --> 00:19:06.020
So he would get all these people together and teach them, hey, if you do this and you do that and you trade under my surveillance

190
00:19:06.020 --> 00:19:18.020
Surveillance and I'll lead you to it, then that is a possible solution and we will be more efficient than anybody else and we can make money and split the proceeds. It's easy.

191
00:19:18.020 --> 00:19:28.020
Now, what this means also is that we don't really have any authority within the firm. What we have is leadership from the entrepreneur, right?

192
00:19:28.020 --> 00:19:32.020
He will guide the factors to specialize and co-specialize

193
00:19:32.020 --> 00:19:36.020
so that you would have this new production structure that did not exist before

194
00:19:36.020 --> 00:19:42.020
and could not exist without the entrepreneur and without these factors actually specializing this way.

195
00:19:42.020 --> 00:19:46.020
So there is no authority, there is no guy with a mustache.

196
00:19:46.020 --> 00:19:51.020
There is a leader, sure, and there is someone with imagination,

197
00:19:51.020 --> 00:19:57.020
someone who can see something that he really wants to realize.

198
00:19:57.020 --> 00:20:03.020
So, the implications, continue on that.

199
00:20:03.020 --> 00:20:07.020
We can think of three different kinds of markets, theoretically.

200
00:20:07.020 --> 00:20:12.020
We can think of one where there are no entrepreneurs at all, just labour factors.

201
00:20:12.020 --> 00:20:16.020
They would all stay within the range, right?

202
00:20:16.020 --> 00:20:19.020
And they would all stay pretty close to the standard level.

203
00:20:19.020 --> 00:20:22.020
Some will be a little bit above, maybe.

204
00:20:22.020 --> 00:20:27.020
No one would really go below because that would mean inefficiency and you would lose money.

205
00:20:27.020 --> 00:20:34.020
That means no real progress. It's a pretty static market.

206
00:20:34.020 --> 00:20:42.020
Now, in the second market here, we have only entrepreneurs, only people envisioning these new production structures,

207
00:20:42.020 --> 00:20:49.020
only people trying to find others to actually realize what they're imagining.

208
00:20:49.020 --> 00:20:52.700
Well, not much would happen here either, because someone would have to say,

209
00:20:52.700 --> 00:20:57.260
no, my idea wasn't as good as yours, so I'll just work for you.

210
00:20:57.260 --> 00:21:00.540
Now, that's not really how we see an entrepreneur, right?

211
00:21:00.540 --> 00:21:04.180
They don't really give up their idea and say, no, you were better.

212
00:21:04.180 --> 00:21:06.620
They want to try it.

213
00:21:06.620 --> 00:21:10.860
So what we have, the optimal solution, if you will,

214
00:21:10.860 --> 00:21:15.020
is a market where you have a few entrepreneurs and you have many labor workers.

215
00:21:15.020 --> 00:21:18.860
So you have a few leaders, a few imaginative leaders,

216
00:21:18.860 --> 00:21:26.260
Finding new ways of doing things, leading these factors to specialize and co-specialize in a certain way

217
00:21:26.260 --> 00:21:29.960
and try it out, because you don't know if it's profitable or not.

218
00:21:29.960 --> 00:21:36.660
If it is, then you're going to make profits, but otherwise not.

219
00:21:36.660 --> 00:21:38.760
Let's see here, I'm almost done.

220
00:21:38.760 --> 00:21:43.960
So the question here is, how do we test this?

221
00:21:43.960 --> 00:21:48.460
Well, we could do it the praxeological way, but that would not give me a doctorate.

222
00:21:48.460 --> 00:21:55.460
So I have to do it another way.

223
00:21:55.460 --> 00:22:16.460
What I will do is do this through agent-based modeling, doing a computerized simulation, starting with a lot of people just plugging different values, some are entrepreneurs, some are not, in these three different kinds of markets, and test if this actually works out, if firms will actually emerge.

224
00:22:18.460 --> 00:22:35.460
The conclusions of this little thought experiment and this paper is that the transaction cost

225
00:22:35.460 --> 00:22:44.800
economics definition is insufficient. It does not explain how firms emerge. It might explain

226
00:22:44.800 --> 00:22:52.160
The difference between a firm and the market, fine, but where did the firm come from?

227
00:22:52.160 --> 00:22:56.160
You have to explain that, right?

228
00:22:56.160 --> 00:23:01.120
Now with specialization as a perspective on this, division of labor perspective, what

229
00:23:01.120 --> 00:23:06.120
it suggests is that there is an explanation that explains what a firm is, through being

230
00:23:06.120 --> 00:23:12.400
an island of specialization if you will, why firms exist, simply because you can make money

231
00:23:12.400 --> 00:23:22.400
How firms emerge, which is a question that the mainstream does not even look at,

232
00:23:22.400 --> 00:23:28.400
because it implies that the market is dynamic and then everything just falls apart.

233
00:23:28.400 --> 00:23:31.400
And it explains what the firm's boundaries are as well.

234
00:23:31.400 --> 00:23:42.400
So, potentially, this may provide good answers to all the questions asked in the literature since 1937 and still no answers are out.

235
00:23:44.400 --> 00:23:59.400
So, what we have is a dynamic productivity rationale that explains firm emergence and not just the cost-based justification for what is or what is not in certain situations.

236
00:23:59.400 --> 00:24:08.400
And of course, most importantly, it adds the entrepreneur to market analysis, because that guy is not in neoclassical economics at all.

237
00:24:08.400 --> 00:24:16.400
You might use the word sometimes, but there is no visionary, there is no one imagining anything, there is no leader.

238
00:24:16.400 --> 00:24:22.400
There is only the atomistic competition.

239
00:24:22.400 --> 00:24:25.400
And that's my contribution. Thank you.

240
00:24:29.400 --> 00:24:31.400
Thank you very much.