Rubrics » Bridging News
The Evolving Identity of the Firm. Cognitive Peculiarities and Idiosyncratic Perceptions
Research into the theory of the firm began with the publication of “The Nature of the Firm” (Coase, 1937), which led to the appearance of four essential questions about the nature of the firm. Why do firms exist? Why are these organized the way they are? Why are there firm boundaries? Why are firms heterogeneous? These questions led to the emergence of many research programs starting with the 1970s, in the seminal works of Alchian & Demsetz (1972), Jensen & Meckling (1976), in transaction-cost economics (Williamson, 1981), in behavioral theory (Cyert & March, 1963), a theory that considers that firms create value by compensating for individual cognitive limitations, and so on. But the effort to integrate firm theory and entrepreneurship is relatively young, especially when we emphasize that modern firm theory was based on the “production function view” (Langlois & Foss, 1999), assuming a predetermined set of production possibilities, starting from a homogeneous interpretation of the firm, in a binary input-output relationship. The firm begins to become dynamic with the emergence of the heterodox Austrian perspective, suggesting that firms create value through their ability to combine the judgments of numerous individuals (Penrose, 1959). More
The Intersection of Religion and Economic Behaviour
The World Bank published two years ago a study conducted by two Bulgarian economists, Simeon Djankov and Elena Nikolova, which shows major differences in attitudes toward state authority and the adoption of new ideas between Orthodox, on the one hand, and Catholics and Protestants, on the other hand. Differences in attitudes between Orthodox and Protestant Catholics are rooted in major theological differences between these branches of Christianity. Western Christianity (which gave rise to Catholicism and Protestantism) emphasizes reason, individualism, and questioning authority, while Eastern Christianity is associated with mysticism, affection, and community spirit, with less emphasis on law, reason, and questioning authority. [1] More
Binding Leviathan: The Case for Institutional Liberty
In political theory, as in any inquiry, a question must begin with a perception or a premise. The question is this: How can the identity and integrity of a self-governing institution – whether a church, business, school, even a family – be maintained independently of the public agenda of a pervasively secular modern state? The perception that frames the question is that the American system of constitutional government, in particular, originated with specific reference to – and derived its essential character from – the covenant tradition of the Bible.[1] More
The Road to a Free Economy
János Kornai needs no introduction to our readers. He is an intellectual force to be reckoned with in the service of liberty. The following pages are an extract from his memoirs specifically selected from a time of great change in Hungary, to which he, working as a non-political man of science, brought a significant contribution. To his credit, he does not shy away from discussing his failures or from admitting the uncertainties regarding his true impact on historical proceedings. This thoughtfulness is found throughout the entire book. More
Realities and Perspectives of a New Social Paradigm
Society is currently undergoing a series of transformations, as a result of the effects of the global pandemic, with consequences in all areas of our existence. Approaching from a conceptual point of view the present reality, the concept of entropy returns to the forefront. More precisely, the specialty literature approaches this concept from a new perspective, namely social entropy based on social justice, founded on the very close, logical relationship between social order and social entropy. Thus, considering that the three pillars on which our form of society is based are self-respect or moral dignity, freedom and democracy, then the concept of social order can be defined as a normative combination of freedom and democracy, which offers a certain measure of individual freedom. More
Pablo Neruda – Poetry, Polities, Peace
One of the greatest poets that have ever lived in the Latin America was none other than the Chilean Pablo Neruda (photo: right) born under the name Ricardo Eliécer Neftalí Reyes Basoalto. He was born in Parral, Chile on July 12, 1904. His father, Jose del Carmen, was a railroad worker, and his mother, Rosa Neftali, was a teacher. Shortly after giving birth to her son, she passed away. Two years after his mother's death, the family moved to Temuco where his father remarried. As for Neruda, he started writing poetry at the age of 10. His father, being an ordinary worker, failed to understand the talent that his son had, so he never encouraged him to write and never cared about his burgeoning talent. More
Vespasian V. Pella – A Peace Fighter
It is indisputably mandatory, Vespasian Pella (photo: second from the right, sitting at the table) asserted, to have the following in order to prevent and combat the state “collective crime” – a recognition of the war’s criminal nature, alongside the genesis of international criminal law and legal institutions able to put standards into practice (Pella, 1925). More
Vijaya Lakshmi Pandit – Casting a Flood of Light on India
What does it take to fight for the freedom of your country? Some may say it takes courage, strength of character or faith. Some may say you need to be a hero, but The Great Daughter of India, as Vijaya Lakshmi Pandit (photo: right) was often called, was of all these things. Only she did not solely belong to India, but to the whole world. By shedding light on the essential social and political issues of her country and promoting equality for all “subject races”, she gained the title of an international democrat. A walk through her life will therefore be an adventure unravelling far beyond India’s borders. More
Beneath It All in Hungary Is Political Corruption
Hungary is the black sheep of the European Union. Its contrarian agenda offends the common opinion of other Member States. Just recently, the Hungarian government not only threatened to veto the EU recovery budget but also voiced its opposition to the Gender Action Plan, a foreign policy initiative to buttress the rights of women, girls and LGBTQI worldwide. But don’t be fooled: behind this maverick political performance of the Orban Government, lies a shrewd and calculated strategy. More
Long-Term Interest Rate Fell Below 3%
Long-term interest rates for Romania fell by almost one percentage point in just two months, according to data released by Eurostat. After increasing up to 4.83% in April 2020, at the end of June it reached a level below the threshold of four percentage points (3.89%). Beyond the obvious effects on future budget payments, this indicator is critical for convergence purposes and the adoption of the euro. More
Automatic Stabilizers as Publicly-Oriented Predictors
In the economic process, the volatility of macroeconomic variables is not the true problem, but its unpredictability. In fact, this conclusion is equally valid for microeconomics. For example, under the EMH – Efficient Market Hypothesis – a predictability, as low as it may be, provides to the (qualified) observer some opportunities to be exploited above the market average returns, without extra risks to assume or extra costs to pay. The volatility has the two “classical” causes: the invisible hand, that is, the aggregate behaviour of the economic actors in the market, and the visible hand, that is, the state (usually normative) intervention in that market (when the state behaves as economic actor, it is also part of the invisible hand). Consequently, as can easily be noticed, the majority of economic (quantitative) models of decisions are aimed at predicting the future market, usually in terms of price. The real and therefore useful predictions must be related to predictors, which are, conceptually, economic or institutional variables with a much lower volatility or, at the very limit, with no volatility, at least in short and medium term. For example, the risk of bonds is null or, at least, constant even if it is different from zero. Our topic in this article is the well-known predictors in the economy, namely the automatic stabilizers. More
When the Appetite for Entertainment Scores Goals
Romania is attacking on the left side of the pitch, Răzvan Marin and Florin Tănase have a short exchange of passes in the corner of the penalty box, which opens some wide spaces for the latter to penetrate and make a decisive pass for Eric Bicfalvi, who, at 32, scores his first goal for the representative team of Romania, at his eighth cap. It was the 81st minute of the UEFA Nations League match on Windsor Park in Belfast. Around the same time that Răzvan, Florin and Eric had their passing game combinations, allowing the latter to find the back of the net, Sorin, Florin and Cătălin were finding the back of the plate. They were, obviously, not on any football pitch, but they were starring, as chefs and judges, in a well-known cooking show in Romania. More
