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Per Bylund

Articles by Per Bylund

Introduction to the Entrepreneurship Special Issue

December 8, 2020

The Austrian school of economics has been all but left by the wayside in economics (e.g., Backhouse 2000). This fate, shared with all “heterodox” approaches that do not fully comply with mainstream dogma, means Austrian theory is at best discounted by other economists. More often, and typically, it is forgotten and a relic of the past.
At the same time, Austrian economics is the only school of economic thought that is well represented in the study of entrepreneurship (e.g., Dahlqvist and Wiklund 2012; Korsgaard, et al. 2016; Packard and Bylund 2018).1 Austrian theories, concepts, and perspectives on entrepreneurship make up an important part of what is modern entrepreneurship theory (Klein and Bylund 2014).
Although the former is as unfortunate as the latter is

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Entrepreneurship in the Time of COVID-19

June 7, 2020

Per Bylund, author of The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives has commented extensively here at, and in a variety of entrepreneurship-focused publications, about the economics of entrepreneursip. Editor Ryan McMaken recently asked Professor Bylund to comment on what challenges entrepreneurs face right now in a rapidly changing legal and economic landscape.
Ryan McMaken: It seems entrepreneurs are in an especially tight spot right now. It is especially difficult to predict if one’s business will even be allowed to be open six months from now. What sort of problem does this much regime uncertainty create for entrepreneurs?
Per Bylund: There are many problems with this, but most fundamental is that it undermines

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Why an Economy Can’t Work without Market Prices

May 23, 2020

It has been a full century since Mises dropped the economic calculation bomb, but the argument apparently still haunts socialists. It should, since Mises managed to show that a socialist economy is not an economy at all but calculational chaos. Yet it is curious that it does, since most have (incorrectly) concluded that Mises’s argument, after decades of debate, was debunked.
Why does a presumably debunked argument still, drive even non-Austrian critics to pen new responses and deliberate on apparent flaws?
Part of the answer might be that the debate ended without a proper conclusion. Mises’s critics, specifically the “market socialists” of the 1930s, misconstrued his argument as being about the existence, rather than meaning, of prices. Their answer, as simple

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How Modern Economics Has Lost Its Way: It’s All About the “Unseen”

May 21, 2020

Economics has lost its way and the study has become both impotent and lacking in relevance. It’s easy to see how and why once we recognize that proper economic thinking takes place two steps beyond the apparent. Noneconomists typically take none of these steps, while modern economics has lost the ability to go beyond the first.
This can, I think, be explained by economics’s increasing adoption of and reliance on mathematical and equilibrium models, which typically disallow the second step.
What are the steps?
They involve going beyond what is directly observed to uncover first the immediate or atemporal tradeoff and then the temporal dimension of the tradeoff in an overall process.
Frederic Bastiat famously distinguished good and bad economists by their ability

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When It Comes to Raw Power, Few Have More of It Than Central Bankers

February 24, 2020

A common retort to the claim that in voluntary exchange both parties expect to become better off (or they wouldn’t do it) is that exchanges are seldom, if ever, a matter of horizontal, equal exchange of values. Instead, any such interaction between people is ultimately a matter of their exercising power over one another. The implication, and often explicitly stated conclusion, is that there is no voluntariness, that exploitation is always present, that one party necessarily gains at the other’s expense.
This rather dismal view of man makes clear that people apparently are slaves to power, their own hunger for it as well as others’ wielding of it. We are forever at each other’s throats in some kind of hyper-Hobbesian fashion:
Although power is always involved,

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Is Free Market Economics Too “Ideological”?

February 21, 2020

Free market economics is often ignorantly dismissed for being “ideological” rather than scientific. It probably sounds smart to the economically illiterate, but it is decidedly not. It doesn’t mean nearly what most people assume it does. The word “free” in free market economics is not used as a normative value judgment but indicates an economy that is unaffected by exogenous (from the outside) factors.
“Free” therefore means that it is the market economy in and by itself that is subject to theoretical analysis. This is, in fact, the only way to identify any and all “pure” market mechanisms and processes.
If economics tried to inductively extract theory from data, we could never know what it is we capture in those data: is it the actual (underlying) economic

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The Economy Is Not a Factory—Nor Should We Try to Make It One

February 11, 2020

A common issue with economists and political economists from left to right is that they misunderstand the market economy as simply being a set of production processes. We see this in Lenin’s statement that the Soviet Union should be run like one big factory. We see it in market socialists from Frederic Taylor to Oskar Lange attempting to respond to (and resolve) Mises’s argument that socialist economic calculation is impossible. And we see the same thing in the efficiency (and market failure) nonsense of Chicago school economists. The misconception is the same: that a working (and progressing) economy is about the management of existing production.
To be fair, if the economy is truly a matter of simply maintaining production processes, then it is certainly

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Intellectual Property: Innovation Should Serve Consumers, Not Producers

February 6, 2020

Proponents of intellectual property rights often rely on one of two lines of reasoning. The first is based on the misunderstanding that the frequency or volume of innovations determine economic growth. The second is captured by the question, “So if I spend $1 billion on R&D (research and development) to bring a new drug to market, anyone should be able to copy my drug without compensation?” Both are based on the same fundamental error: assuming that innovation is a matter of production. It is not. Innovation is all about entrepreneurship, and that’s why intellectual property rights do not and cannot help.
The economic growth argument appears to be in line with empirical observation. After all, it is the introduction of and change caused by valuable innovations

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Consumer Preferences Are Harder to Measure than the Behavioral Economists Think

December 21, 2019

A recent paper in the Journal of Consumer Psychology (JCP) has started a debate on the accuracy of “loss aversion,” the idea that people are driven by fear of losses more than they are by the potential for gain. Core to behavioral economics, this idea has been rather universally accepted and been part of the awarding of two economics Nobel Prizes, in 2002 to Daniel Kahneman and in 2017 to Richard Thaler.
One of the authors of the JCP article, Professor David Gal at the University of Illinois at Chicago, summarizes their findings in the Scientific American and concludes, “Our critical review of loss aversion highlights that, even in contemporary times, wrong ideas can persist for a long time despite contrary evidence.”
The inserted “even in contemporary times”

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