Mark Casson

In July 2017, Casson was elected a Fellow of the British Academy (FBA), the United Kingdom's national academy for the humanities and social sciences.

Before 1980, policy-makers paid little attention to entrepreneurship, but recently there has been an explosion of interest in the subject. Much of this focuses on small firms and their potential for regional regeneration. Owning and managing a small firm was not, however, the original meaning of the term ‘entrepreneur’. According to Casson, entrepreneurship signifies the promotion of innovative high-risk projects that contribute to economic efficiency and growth. Risky innovations can easily fail, however. Casson argues that entrepreneurs must trade off the expected benefits of success against the expected costs of failure. If there were simple rules for making these calculations, then politicians or planners could take innovation decisions. But such decisions are more akin to medical diagnosis than to pure calculation. Information is incomplete and decisions must be based on symptoms rather than facts. Successful decisions depend on good judgement, in other words. Different people observe different symptoms and may even interpret the same symptom differently, so consensus is impossible. Under these conditions private entrepreneurs, who are confident in their own judgement and optimistic of success, step forward and commit their own funds (or those of family, friends and shareholders) to a project. If their judgment is sound they make a profit and if it is not they lose. In effect they bet against the sceptics who do not invest. Because the sceptics stay out, successful entrepreneurs may well achieve a monopoly position until opinions change and imitators appear. Casson develops this simple approach in a number of directions. He presents his theory as an original synthesis of other approaches, including Richard Cantillon’s theory of risk-bearing, Frank Knight’s theory of uncertainty-bearing, Joseph Schumpeter’s theory of innovation, Friedrich Hayek’s theory of distributed knowledge, Israel Kirzner’s theory of opportunity-seeking and William Baumol’s theory of incentives. He has developed formal models of entrepreneurship that demonstrate its contribution to economic performance and allow that contribution to be measured.

Mark Casson is one of the founding members of the Reading School of International Business, a worldwide network of economists established in the 1970s at the University of Reading, England, which has been influential in changing public perceptions of the costs and benefits of multinational enterprises and foreign direct investment. He is also the general editor of two book series, The Globalisation of the World Economy, and the Handbooks of Research Methods and Applications in the Social Sciences.

Mark Casson FBA (born 1945) is a British economist and academic. He is a professor of economics at the University of Reading in England. He was Head of Department (1987–94) and is the institution's current Director of the Centre for Institutional Performance.

The Victorian British economy has long been recognised as an important testing ground for theories of entrepreneurship and culture. There is a long-standing debate over the reasons for Britain's success in the Industrial Revolution 1760-1850, and its subsequent deindustrialization, 1870—1914. Casson's recent research on the Victorian railway system suggests that rise and decline were ‘two sides of the coin’. When individual enterprise, supported by family and community ties, was advantageous, Britain succeeded, and when it became a handicap Britain failed. Casson creates a counterfactual model of the British railway system based on what might have happened had Parliament accepted advice from the civil service at the time of the Railway Mania in 1844-5. Comparing the actual railway network with the counterfactual one suggests that about 30 per cent of railway mileage constructed was unnecessary and wasteful. Parliament rejected informed advice because it was distrustful of civil servants but well-disposed to private entrepreneurs, and because local interests were more important in Parliament than national ones. Social attitudes and political structures that had favoured early industrialisation therefore impeded the later development of the railways. The legacy of high transport costs caused by the over-building of railways reduced the competitiveness of British manufacturing exports and contributed to industrial decline.