Austrian Theories of Entrepreneurship: Insights from Complexity Theory

17 Pages Posted: 20 Mar 2014

Date Written: March 19, 2014


This paper examines various Austrian theories of entrepreneurship through the lens of complexity theory, more specifically via the concept of a dancing fitness landscape (Beinhocker, 1999, 2007; Kauffman, 1988; Phelan, 1998). Problems in many fields (including economics) can be characterized as attempting to find the highest peak on a fitness landscape (which corresponds to an efficient or optimal resource allocation). A rugged fitness landscape is one characterized by many peaks and troughs, while a dancing fitness landscape is one where the peaks and troughs change over time due either to exogenous or endogenous activity. I argue that several key disagreements among Austrian economists can be better understood through the metaphor of a fitness landscape. The analysis also touches on critiques of the Austrian worldview and how these might be handled within the same framework (Cowen, 2003; Hodgson, 2007). This study is timely as radical Austrian views are starting to percolate into business schools leading to increased debate among management scholars about the precise nature of the entrepreneurial process (Alvarez, Barney, & Young, 2010; Chiles, Bluedorn, & Gupta, 2007; Sarasvathy & Dew, 2008)

Keywords: Austrian economics, complexity, entrepreneurship

JEL Classification: M13

Suggested Citation

Phelan, Steven, Austrian Theories of Entrepreneurship: Insights from Complexity Theory (March 19, 2014). Available at SSRN: or

Steven Phelan (Contact Author)

Kennesaw State University ( email )

1000 Chastain Road
Kennesaw, GA 30144
United States

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