THE NORMATIVE BIAS IN ENTREPRENEURIAL THEORY

Keith Jakee and Heath Spong ()
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Heath Spong: Department of Economics, University of Iowa, Iowa City, IA, 52242, USA

Division of Labor & Transaction Costs (DLTC), 2011, vol. 03, issue 02, 81-105

Abstract: This article highlights the normative bias in the entrepreneurial theories of Schumpeter and Kirzner. This bias, while significant, has remained largely implicit, and the approaches of both authors, we argue, entail "Panglossian" views of entrepreneurial processes. We trace these problems to each of the theories' teleological foundations and suggest that defining entrepreneurial "outcomes", and normatively judging those outcomes, will be more problematic than commonly admitted. We suggest analysing entrepreneurship from a non-teleological approach that decouples the entrepreneurial act from the complex and unpredictable processes that follow from that act. Such an approach should eliminate the normative priors that currently exist and should open up a range of new areas to explore under the rubric of "entrepreneurship". We also hope to stimulate discussion between entrepreneurship andnew classicaltheorists, since, as we argue, there appear to be affinities between the approaches. In particular, our approach to entrepreneurial analysis implies the kinds of discontinuities that have become the hallmark of the new classical method. Our arguments are briefly illustrated by references to several brief examples at the end of the article.

Keywords: Entrepreneurship; normative bias; Panglossian bias; Schumpeter; Kirzner (search for similar items in EconPapers)
JEL-codes: C62 D E1 F F11 F12 F16 J2 J3 L O (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1142/S0219871111000391

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