Abstract

The neoclassical positive theory of the firm has dominated the scene for well over a century, possibly as a result of its formal elegance and sophistication. This article questions its positive and normative conclusions. In particular, the first part of this work focuses on the role of uncertainty and risk, on the major features and weaknesses of the neoclassical notion of competitive equilibrium, on the role of the entrepreneur. The second part of the paper presents the Austrian theory of the firm, of the entrepreneur, as well as the concept of "entrepreneurial discovery". Its final pages highlight some doubts which the Austrian approach has not been able to answer so far, and suggests an agenda for future research.