Misesian Ownership and Coasian Authority in Hayekian Settings: The Case of the Knowledge Economy

I critically discuss a number of recent and increasingly influential claims about economic organization in the "knowledge economy." The relevant claims are that traditional authority relations will tend to disappear, the boundaries of the firm will blur, and coordination mechanisms will be very malleable (resulting in various "new organizational forms"). In order to get an analytical focus on the knowledge economy, I assume that it may be approximated by "Hayekian settings" (after Hayek 1945), that is, settings in which knowledge is distributed and where knowledge inputs are relatively more important in production than physical capital inputs. I then argue, drawing on organizational economics as well as Mises’ insights in property rights and comparative systems, that the presence of Hayekian settings does not mean that authority will disappear, etc. Thus, Misesian insights help to resurrect the Coasian firm against attacks inspired by Hayek’s writings on knowledge.