Chapter 1: "The theory of dynamic efficiency"

This chapter traces the historical evolution of the concept of efficiency, highlighting how the influence of mechanical physics narrowed the concept to its static dimension. The author argues that this static view, prevalent in welfare economics, is flawed due to:

• Hidden value judgements: Criteria like Pareto efficiency and the social welfare function rely on scientifically unacceptable interpersonal utility comparisons.

• Static assumptions: Ignores the dynamic nature of individual preferences, knowledge and possibilities.

• Overemphasis on technical efficiency: Fails to differentiate it from economic efficiency, assuming technology and prices are fixed.

The chapter then outlines the concept of dynamic efficiency, linking it to entrepreneurship:

• Entrepreneurship as discovery: Entrepreneurs are alert to profit opportunities, constantly creating and transmitting new information.

• Dynamic competition: Entrepreneurs engage in rivalry to discover and exploit opportunities, leading to a continuous process of coordination.

Chapter 2: "The ongoing Methodenstreit of the Austrian School"

This chapter further delves into the methodological differences between the Austrian School and neoclassical economics, framing it as an ongoing debate ("Methodenstreit"). The author argues for the superiority of the Austrian paradigm due to its emphasis on:

• Theory of action vs. theory of decision: Austrian economics focuses on dynamic processes of social interaction and coordination, recognizing the constant evolution of ends and means.

• Subjectivism vs. objectivism: Emphasizes the individual as the creative actor, driven by subjective knowledge and values.

• Entrepreneurship vs. homo economicus: Recognizes the role of entrepreneurs as alert, creative individuals who drive change and coordination.

• Entrepreneurial error vs. ex-post rationalization: Acknowledges the possibility of genuine errors, leading to entrepreneurial profit and learning.

• Subjective information vs. objective information: Emphasizes the dynamic and disperse nature of information, constantly being created and interpreted by individuals.