Advances in Austrian Economics – serie

This third volume in the series is divided into four parts. The first presents a symposium on models of socialism, the second present current research, the third, review essays, and the fourth, book reviews.

Advances in Austrian Economics connects the Austrian tradition of economics with other research traditions in economics and related areas. Each volume attempts to apply the insights of Austrian economics and related approaches to topics that are of current interest in economics and cognate disciplines. The edited volume approach delivers ideas from multiple contributors in one book, providing a forum for variety and contrasting perspectives among those working in these areas. As such, Advances fills an important niche in the world of Austrian economics. Austrian school economists are the primary audience, but this series will appeal to people working in a variety of positions in economics and related disciplines. Those working in public choice, new institutionalism, cognitive or behavior economics, entrepreneurship, and other areas will find value in the series. Areas of coverage are quite open, as long as there remains a connection to the ideas associated with the Austrian school, broadly interpreted.

Austrian economics and entrepreneurial studies have both expanded greatly in the last twenty or thirty years. Unfortunately, they have developed more or less independently of each other. Austrian economics has enjoyed a revival since 1973 or 1974. In 1973, Israel Kirzner published his classic book, "Competition and Entrepreneurship", which outlined an entrepreneurial theory of the market process. In 1974, F. A. Hayek was awarded the Nobel Memorial Prize in Economics. The same year saw the famous South Royalton conference, which is the traditional origin of the "Austrian revival." The intellectual history of entrepreneurial studies reaches back at least as far as Richard Cantillon (1755).As an intellectual movement, however, entrepreneurial studies began about the same time as the Austrian revival. The beginnings of the entrepreneurship movement might be dated to sometime before 1978 when Babson College established its Center for Entrepreneurial Studies, the first such center in the US. In all this time, however, there has been limited exchange between Austrian economics and entrepreneurial studies. It is high time we expand trade across the border between Austrian economics and entrepreneurial studies.

Since the works by Ludwig von Mises and F.A. von Hayek in the 1920s, the Austrian School of Economics has developed a unique analysis of how the interventions by governments may cause problems, which in turn may lead to calls for further intervention. The Austrian concept of how such a dynamic of interventionism may evolve has however never been very influential outside the Austrian School nor been widely applied for empirical studies. This volume seeks to bring together economists and political scientists with perspectives from both Austrian and public choice analysis so as to further enrich and apply the Mises-Hayek logic, as well as critically assess its value.

The contributors to this volume seriously engage issues in the crossroads where biology, psychology, and economics meet. The volume makes several important contributions to the area and provides an overview of the current state of knowledge. Biologist David Sloan Wilson, psychologists Robert Kurzban and C.A. Aktipis, economists Geoffrey Hodgson, Paul Rubin and Evelyn Gick, and jurist David Friedman consider altruism, selfishness, group selection, methodological individualism, dominance hierarchies, and other issues relating evolutionary psychology to economics. Several contributors, such as Viktor Vanberg and Brian Loasby, pay special attention to the role of F. A. Hayek and other "Austrian" thinkers in shaping evolutionary approaches to economic theory. Theoretical biologist Deby Cassill relates her revolutionary theory of "skew selection" in biology to perennial issues in political economy. The volume includes a symposium on group selection and methodological individualism. In an important paper, D. G. Whitman argues that group selection and methodological individualism are "compatible and complementary. Comments from Elliot Sober & David Sloan Wilson, Richard Langlois, Todd Zywicki, and Adam Gifford offer a heterogeneous set of responses to Whitman's argument. Roger Koppl's introduction constitutes a review essay and includes an argument that "Austrian" economists have a comparative advantage in bringing the Verstehen tradition of social thought into contact with recent work in biology and evolutionary psychology.

The cognitive sciences, having emerged in the second half of the twentieth century, are recently experiencing a spectacular renewal which cannot leave unaffected any discipline that deals with human behavior. The primary motivation for our project has been to weigh up the impact that this ongoing revolution of the sciences of the mind is likely to have on social sciences in particular, on economics. The idea was to gather together a diverse group of social scientists to think about the following questions. Have the various new approaches to cognition provoked a crisis in economic science? Should we speak of a scientific revolution in economics occurring under the growing influence of the cognitive paradigm? Above all, can a more precise knowledge of the complex functioning of the human mind and brain advance in any way the understanding of economic decision-making? This volume brings together economists from various traditions such as Austrian economics, evolutionary economics, institutional economics, law and economics, neuro-economics and bio-economics. More specifically, it contains contributions by William N. Butos and Roger G. Koppl, Geoffrey M. Hodgson, Carine Krecke and Elisabeth Krecke, Janet T. Landa, Thomas J. McQuade, Steven G. Medema, Bart Nooteboom, Richard A. Posner, Salvatore Rizzello and Alfons Cortes. It examines the impact of cognitive science growth on the economics discipline. Contributors represent a wide variety of economic thought and tradition. It looks ahead to the future of economics.

The theory of consumer choice fills the opening chapters of any micro-economic textbook. Yet, surprisingly, this position of privilege has not translated into a flourishing of economic research that is comparable to what has happened in other branches of economic reasoning. Starting with Menger, the Austrian economic tradition has always shifted the focus of attention from the problem of equilibrium to that of social order, to the evolution of norms, institutions and practices that favor social cooperation and coordination. Within this tradition competition and markets are not viewed as states, but as processes in which change and errors occur and efficiency is reached but also easily lost. The real economic problem becomes a problem of knowledge how it is discovered, how it is transmitted. Consumer's interactions and choices and actual consumption practices play an important role in these evolving forms of sociality. And it is within this framework that allows for experimentation and learning, that they should be studied. This title is part of the "Advances in Austrian Economics" series. It contains a collection of high-level papers on the evolution of consumption.

Leading scholars consider Austrian economics from several perspectives such as characteristic themes of entrepreneurship and uncertainty, scientific methods such as mathematical complexity theory and experimental economics, and historical contexts such as pre-war Vienna and post-war France. Placing "Austrian economics" in these multiple contexts helps to reveal the rich texture of the Austrian tradition in social thought and its multiple connections to current research in diverse fields. Applications to the theory of the trade cycle and to foreign intervention suggest that the Austrian tradition contains possibilities not yet full explored and exploited. The volume gathers together papers presented at the second biennial Wirth conference on Austrian economics, held in October 2008 when the crisis of Fall 2008 was still new and shocking. This coincidence of timing makes policy issues and crisis management a kind of leitmotif of the volume. If, as keynote speaker David Colander argues, Austrians have a comparative advantage in political economy, then its stock should rise in times of crisis and political uncertainty. The volume provides evidence in favor of this view. Contributors include David Colander, Richard Wagner, Jeffery McMullen, J. Barkley Rosser, Jr., Steve Horwitz, Richard Ebeling, Chris Coyne, and Peter Boettke.

Hayek's philosophical psychology as set out in his The Sensory Order (1952) has, for the most part, been neglected. Despite being lauded by computer scientist grandee Frank Rosenblatt and by Nobel prize-winning biologist Gerald Edelman, cognitive scientists -- with a few exceptions -- have yet to discover Hayek's philosophical psychology. On the other hand, social theorists, Hayek's traditional disciplinary constituency, have only recently begun to take note and examine the importance of psychology in the complete Hayek corpus. This volume brings together for the first time state-of-the-art contributions from neuroscientists and philosophers of mind as well as economists and social theorists, all critically engaging in many aspects of Hayek's philosophical psychology.

Key features of Austrian economic theory are the use of methodological individualism, the view that entrepreneurs cause development, and the recognition that local knowledge is largely tacit and thus difficult to communicate. The contributors to The Spatial Market Process show how these and other Austrian features provide an alternative foundation for understanding the spatial manifestation of economic phenomena. Many chapters elaborate upon theoretical insights first formulated by F.A. Hayek. The work of urban theorist Jane Jacobs, the entrepreneurship theories of both Joseph Schumpeter and Israel Kirzner, transaction costs in the Coasean tradition, and Fritz Machlup's notion of "knowledge conveyors" are examples of other theoretical constructs that are integrated into new spatial theories by the contributors; combining classical Austrian theories with contemporary breakthroughs.

In almost every corner of our private and public lives we rely on experts to advise us. This important species of labor is getting increasing attention from economists, who are beginning to learn how to apply their tools and assumptions to the problem of expertise. Under what conditions of supply and demand are experts likely to give us good advice? When is expert failure more likely? Do entrepreneurs challenge existing expertise? Are they experts themselves? And if economists are themselves experts, what happens when we turn the skeptical gaze of economic theory on the economist themselves? This volume publishes papers given at the third biennial Wirth Institute Conference on Austrian Economics. It brings together a heterogeneous collection of thinkers, some "Austrian" and others not, to critically engage the problem of experts. While mostly agreeing that there is a problem of experts, the papers collected here approach the issue from a variety of often-complementary perspectives.

The term the 'Entangled political economy' was first coined by Economist Richard E. Wagner of George Mason University who challenged the "additive" political economy paradigm with his "entangled political economy," which sees public and private entities as equal and entwined players in exchange relations. This volume examines entangled political economy from several distinct but complementary points of view. The history of entangled political economy is traced to Adam Smith and Carl Menger and its implications are worked out for both theoretical and applied economics. New directions in economic modeling are struck. Finally, entanglement is found to imply complexity, which leads not only to somewhat non-standard mathematical methods in economics, but also principled limits to the explanatory and predictive power of mathematical models in political economy. The volume demonstrates that Wagner's notion of entanglement opens new vistas for political economy in all its dimensions.

The theme of this volume is 'New Thinking in Austrian Political Economy'. It includes original research by scholars working within Austrian political economy. The contributors draw on insights from Austrian economics that shed new light on a range of relevant topics including: the role of culture in economic action, the political economy of post-disaster recovery, class structure, decentralized political orders, drones, institutional change, macroeconomics, and superstition and norms. Each chapter discusses the relevance of Austrian political economy for understanding the topic under analysis and discusses areas for future exploration and research. The volume captures the relevance of Austrian political economy for scholarship on a wide array of topics and its potential as an active and open-ended research program. Scholars working in the areas of Austrian economics, heterodox economics, constitutional political economy, cultural studies, political science, public choice, sociology, and public policy will find the volume of interest.

Advances in Austrian Economics is a research annual whose editorial policy is to publish original research articles on Austrian economics. Each volume attempts to apply the insights of Austrian economics and related approaches to topics that are of current interest in economics and cognate disciplines. Volume 21 exemplifies this focus by highlighting key research from the Austrian tradition of economics with other research traditions in economics and related areas.

The US housing bubble and the ensuing financial crisis and recession, as well as the ongoing slow recovery, have prompted a renewal of interest in the business cycle theory associated with the Austrian school of economics. Over the last thirty years, Austrian economists have extended and refined that theory while also deploying Austrian insights in other areas of monetary theory and macroeconomics. In this volume, a number of macroeconomists influenced by the Austrian school demonstrate its explanatory power by applying those ideas to a variety of historical and contemporary issues. Several of the papers focus on the differences between the US and Canadian experiences during the early 21st century, while other contributors offer critical extensions of Austrian monetary and business cycle theory. The volume also includes empirical applications to the housing boom and bust, and several papers consider the place of Austrian macroeconomics within the school's approach to political economy and public policy more generally. "Studies in Austrian Macroeconomics" shows the breadth and depth of modern macroeconomics in the Austrian tradition.

The relationship between the Austrian tradition and Bloomington institutionalism has been part of a larger intellectual evolution of a family of schools of thought that coevolved in multiple streams over the last 100 years or so. The Bloomington scholars, once they delineated the broader parameters of their own research program, started to reconstruct, reinterpret, and in many cases simply rediscover and reinvent Austrian insights and themes. As such, they created the possibility of giving those insights and themes new interpretations and new applications, in novel circumstances with new research priorities, in particular, public administration, governance and collective action, and entrepreneurship in non-market settings.Was there a programmatic and explicit effort to recover and reinvent the Austrian tradition? The answer has to be an emphatic ‘no’. But that is precisely the reason why the Ostroms’ work should be interesting to scholars working in the Austrian tradition. The thematic convergence and the compatibility and complementarity between the Austrian and Bloomington schools is driven by their internal underlying theoretical logic and by the logic of problem solving. Upon closer inspection, the underlying familial and genealogical connections reveal themselves again and again.The convergence and interplay between these two intellectual traditions is rich and productive. On the one hand, it stands as a demonstration of the applied relevance of the set of approaches and issues that we traditionally associate with the Austrian tradition. On the other hand, it is a challenge to further explore and elaborate this area. This volume is an attempt to respond to that challenge.

Austrian Economics: The Next Generation brings together emerging and established scholars to explore the insights that can be gleaned from applying Austrian economics to a range of different topics. Spanning a variety of related disciplines, from history to politics to public policy, this collection explores a wide range of topics and how they relate to key Austrian themes. How has Austrian economics evolved over the past 40 years? What is the relationship between history and economic theory? How does the Austrian school of economics compare to other evolutionary schools of economic thought? What can public choice theory take from the concept of emergent order? What role does departmental culture play in enabling or deterring police misconduct? How do the multiple forces shaping the evolution of economic inequality interact with one another? What are the limitations of evidence-based policy? To what extent do regulatory agencies recognize key Austrian insights? How does the platform economy affect the possibilities for regulation of traditional utilities? What can a defense of market institutions rooted in market process theory learn from virtue ethics? Is a classical liberal limited state best situated to cope with the darker side of human nature, or might conservatism or social democracy perform better? This collection explores each of these topics in detail, providing fresh takes on a wide range of important topics.

The modern school of Austrian economics took shape in the 1970s, and reflects the social science questions of its time. Is it still relevant today, considering that the theories that drive contemporary social science have evolved dramatically over the past few decades? While Austrian concerns such as property rights and imperfect cognition have become more common, other aspects of the Austrian thought are even more idiosyncratic than ever. In the ten chapters included here, leading economists explore whether Austrian economics still has unique insights to offer the world of today. Starting with Peter Boettke’s lead essay, “What is Wrong with Austrian Economics?”, chapters include an array of perspectives responding to this question, ranging from economics, to intellectual history, to political science, and to philosophy. At the end of the volume, Boettke offers a rejoinder, asking, “What is Right About Austrian Economics?” Together, these essays explore the barriers to the spread of Austrian ideas, ask which disciplines might be receptive to them, examine the role of ideology and funding in helping and hindering the school, and consider the advantages and disadvantages of different strategies for expanding engagement with other scholars.

Austrian economics is known for extensive—and many economists would say excessive—ruminations on methodology. Attempting to steer a middle course between radical forms of historicism (there are no economic laws) and scientism (economic laws are as precise as physical laws), this approach often appears to diminish the importance of empirical testing and quantitative methods more generally. Since the Austrian revival of the 1970’s, social scientists have developed a number of new theoretical and empirical approaches to studying the social world. Experimental and behavioral economics have exploded in popularity. Econometrics has arguably taken a more central role in the discipline than even formal economic theory. And, most prominently, econometricians have developed quasi-experimental techniques for examining real-world data as part of the “credibility revolution.”This volume, Contemporary Methods and Austrian Economics, examines the relationship between Austrian economics and these new social scientific methods. Do Austrian critiques of the excessive ambitions of formal theory and empirical measurement still hold water (if they ever did)? Do the findings of these new approaches bolster or undermine distinctively Austrian theories? How should we update our views on the relationship between abstract economic theory and empirical investigations?

Philosophy, Politics, and Economics (PPE), as an interdisciplinary endeavour, has surged in popularity in recent years. Work in this field usually draws on standard microeconomics to grapple with questions from political philosophy. But what might Austrian economics, which offers an alternative approach to economic theory, have to offer to this endeavour? Featuring contributions by economists, philosophers, political scientists, and political theorists both friendly to and critical of Austrian ideas, this collection explores what, if anything, Austrian assumptions about human nature and the function of social institutions have to offer the broader field of PPE. The authors explore the relationship of F.A. Hayek’s thought to contemporary analysis of democracy, the importance of entrepreneurship for institutional analysis, the possibility and perils of self-governance, and whether Austrian ideas can better explain real-world institutional developments.

The Austrian tradition in economic thought had a profound influence on the development of post-war economics including neoclassical orthodoxy, game theory, public choice, behavioral economics, experimental economics and complexity economics. Much of what was once unique to the Austrian school has become part of the cognitive DNA of work-a-day economists. Because these Austrian roots have gone largely unrecognized, economists often wonder quite sincerely what the fuss is about when it comes to the Austrian school. In this sense, the Austrian school has been a victim of its own success. The papers in this volume reveal that the riches of the Austrian school have not been exhausted and further inquiry in the Austrian tradition will continue to yield much that is new and valuable. The volume publishes a carefully selected subset of papers presented at the inaugural Wirth Institute Conference on the Austrian School of Economics. The contributors are Lawrence H White; Hansjorg Klausinger; Martin Gregor; Peter Boettke, Christopher Coyne, & Peter Leeson; Roger Koppl, Torsten Niechoj, Steven Horwitz; and, Peter Lewin. These scholars explore issues in economic policy, applied economics, and pure theory from a variety of perspectives. Their explorations of the frontiers of Austrian economics reveal a rich tradition of scholarship with continuing relevance to social thought is all its dimensions.

Karl Menger (1902-1985) was the mathematician son of the famous economist Carl Menger. He was professor of geometry at the University of Vienna from 1927 to 1938. During that period, which was crucial from an historical and philosophical point of view, he joined the Vienna Circle and founded his Mathematical Colloquium. The present volume of "Advances in Austrian Economics" offers the transcription of those unpublished parts of Menger's notes written between 1923-1938. It is hoped that these notes, together with the editor's contextual explanations, provide a subtext to Menger's biography during this influential period.