and

Margolis, Thomas McQuade, Gordon Tullock, and an anonymous referee for helpful suggestions on an earlier draft. The usual caveat applies. F.A. Hayek’s theoretical psychology was developed in his 1952 book, The Sensory Order. Because economists have increasingly become interested in cognition and psychology, this work has valuable implications for economic science. Nevertheless, these implications have sometimes been obscured by bogus interpretations of the book. We address down such interpretations of Hayek and suggest some ways in which the message of The Sensory Order matters for economic research today. 1 I

Kirznerian Entrepreneurship and The Economics of Science

The paper distinguishes two types of entrepreneurial activity in terms of their institutionally relevant contexts. Type 1 (Kirznerian) entrepreneurship refers to catallactic activity in which coordinating mechanisms, operating via the exchange of property rights, generates market prices. We identify Type 2 entrepreneurship with noncatallactic processes.The paper argues that scientific activity, despite exhibiting characteristics congenial to the economic way of thinking, cannot be generally studied as a catallactic process under prevailing institutional arrangements. Recent changes in the institutional context of science, however, suggest a widening scope for treating science as a market activity.Cet article fait la distinction entre deux types dactivité entrepreneuriale suivant les contextes institutionnels où ils apparaissent. Le premier type (kirznerien) dactivité entrepreneuriale sinscrit dans un cadre catallactique où les mécanismes de coordination opérant à travers léchange des droits de propriété génèrent les prix marchands. Le second type dactivité entrepreneuriale que nous identifions relève de processus non catallactiques. Larticle soutient que, même si elle présente des caractéristiques qui pourraient relever de la pensée économique, lactivité scientifique telle quelle est pratiquée dans les conditions institutionnelles actuelles, ne peut en général pas être étudiée comme un processus catallactique.Cependant, les changements récents dans le contexte institutionnel de la science suggèrent la possibilité grandissante denvisager la science comme une activité marchande.

Government and Science: A Dangerous Liaison?

We survey the relationship between government and science (concentrating on the situation in the U.S.). We discuss the theoretical rationale for government funding, showing that it is open to serious question – its model of science as market is highly suspect, and its implications for the remedial effects of intervention do not stand up to even casual empirical scrutiny. Calling attention to the nakedness of the standard economic rationale, however, does not touch the very real political rationales, and it is the interaction of these with the understandably strong desire of scientists to be well-funded to which we direct attention. We describe various ways in which government funding can interact with scientists and scientific activity to produce the unanticipated effects that concern us