Re-Intermediation and Deferment through E-Commerce: Neo-Austrian Interpretation of Capital and Time

Re-Intermediation and Deferment through E-Commerce: Neo-Austrian Interpretation of Capital and Time

Parthasarathi Banerjee (NISTADS, India)
Copyright: © 2005 |Pages: 18
DOI: 10.4018/978-1-59140-363-0.ch002
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Abstract

Contrary to the common belief that e-commerce disintermediates—or even while reintermediation takes place the economic circuit fails to get lengthened—this chapter argues following the Austrian perspective, that through e-commerce consumption gets deferred and the economic circuit lengthens. Inappropriate use of transaction cost theory, in particular, has often weakened the received theory. This implies that e-commerce increases capital because capital is time according to the Austrian theory. Consequently the efficiency-focus of received theory is replaced by a capital-enhancing theory of this new commerce. Several novel functions of intermediaries including coordination have been utilized to support the departure from the efficiency perspective. Citing several well-known examples from the literature has adumbrated this argument.

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