Austrian Economics

World and Science by Ludwig von Mises: On Misesian Metaphysics (CZ)

by Petr Špecián

ŠPECIÁN, P. "Svět a věda u Ludwiga von Misese. Esej o misesovské metafyzice". FILOZOFIA 67, 2012, No 4. p. 335-346.

The paper deals with von Mises’ metaphysics and argues that his methodological dualism concerns only his epistemology.... more The paper deals with von Mises’ metaphysics and argues that his methodological dualism concerns only his epistemology. The framework of Mises´s ontology is materialistic monism. Although Mises strongly criticizes materialism, his critique does not concern metaphysical ontological materialism as long as it does not try to eliminate the specific method of the social sciences. In this sense Mises’ metaphysics is fully naturalistic – it does not include any “spiritual” agents and postulates a world consisting exclusively of elementary physical particles. The study illustrates this point on Mises’ determinism and his rejection of the free will as well as on his Darwinian account of the evolution of human mind. The specific method of the social sciences which makes use of the category of finality serves merely as an efficient heuristics and is based on a pragmatic view of science. It allows us to describe the irreducible complexity of social phenomena that cannot (at least not yet) be grasped by the physicalist vocabulary alone. Thus the argument of complexity is seen as a cornerstone of Misesian methodological dualism.

Libertad y desempeño económico

by Javier Mejía Cubillos

From a broad philosophical framework, this paper addresses the relation  between freedom and economic... more From a broad philosophical framework, this paper addresses the relation  between freedom and economic performance. It argues  for the thesis that, although a liberal system does not guarantee  absolute harmony, is the only "convenient" and morally valid for a  modern society. The core of this argument is the acceptance of the  permanent  uncertainty about the great results of the world and  the inability of a central entity to control them.

The Principles behind a Free-Market City in Latin America - Guillermo Pineda

by Guillermo Pineda

Theory and History - Guillermo Pineda

by Guillermo Pineda

The role of entrepreneurship in the market process: A simulation study

by Mohammad Keyhani

Co-authored with Moren Lévesque, Best Paper Proceedings of the 2011 annual meeting of the Academy of Management (August 12-16, San Antonio, Texas).

Mixing economics and ethics: Carl Menger vs Gustav von Schmoller

by Markus Haller

Carl Menger's theory of invisible-hand explanations

by Markus Haller

Why Do Languages Die?

by Daniel Hieber

Published with the Ludwig von Mises Institute.

Why do languages die? This is a question that troubles many linguists, but one which we still lack really solid... more Why do languages die? This is a question that troubles many linguists, but one which we still lack really solid theories for answering. My own approach to the matter focuses on the incentives put in place by the nation-state, and how the existence of the nation-state itself is antithetical to language diversity. I take a praxeological approach, following Ludwig von Mises, which aims to understand the actions of individuals and the choices they make in accordance with the incentives presented to them.

This article tackles this very hoary question of how languages die. I argue that, while economic reasons exist for language death, they are largely secondary to the institutionalized way in which the state interrupts the process of intergenerational transmission. The article is published on Mises.org, the online arm of the Mises Institute, an organization dedicated to the advancement of Austrian economics.

Language and the Socialist-Calculation Problem

by Daniel Hieber

Published with the Ludwig von Mises Institute

Why do languages disappear? Well, there are lots of reasons, some of them more ‘natural’ than others. Globalization... more Why do languages disappear? Well, there are lots of reasons, some of them more ‘natural’ than others. Globalization and colonialization are good examples, but few people think about the way governments often contribute directly (and indirectly) to language death.

So I decided to write an article on exactly that: language and the government. I argue that governments necessarily incentivize bad language policy and support fewer languages rather than more. In economics, this inability to create policies that accurately address the needs of its citizens is called the socialist-calculation problem, and that’s what this article is about.

The article is published on Mises.org, the online arm of the Mises Institute, an organization dedicated to the advancement of Austrian economics. Over 40,000 people read the Mises Daily articles each day, and they are eventually read by hundreds of thousands. Since there is almost no overlap between linguistics and economics, I felt this article was just itching to be written.

Plato’s Class System of Pre-Social Engineering

by Cam Rea

Getting to the Hayekian Network

by Troy Camplin

Published in Advances in Austrian Economics Volume 15 - Hayek in Mind: Hayek's Philosophical Psychology

Purpose – To present the connection between modern network theory and Hayek's ideas on the brain and spontaneous... more Purpose – To present the connection between modern network theory and Hayek's ideas on the brain and spontaneous orders.

Methodology/approach – To show that Hayek's ideas on the brain, spontaneous order, and why socialism cannot work are confirmed by network and self-organization theory, and to use network and self-organization theory to bridge Hayek's theory of the mind to his work on spontaneous orders.

Findings – Spontaneous orders are scale-free networks, but humans evolved a preference for hierarchical networks, which are typical of tribes and firms – and socialism. However, hierarchies only work for teleological organizations, not for ateleological spontaneous orders like economies. Part of the human preference for human-organized networks comes from our “intentional stance,” which automatically sees patterns as evidence of an organizer.

Research limitations/implications – This work acts as an introduction to possible directions in spontaneous order research. New work in bridging evolutionary and cognitive psychology (which includes Hayek's work) with self-organization and network theory acts as a promising development for neuro-Hayekians.

Social implications – Understanding there is an evolutionary bias for certain kinds of networks, even though those are not appropriate for certain kinds of social orders, and understanding the nature of these networks should help us understand the true relationships among individuals, organizations, and spontaneous orders.

Originality/value of chapter – This work brings Hayek “up to date,” with network theory and self-organization, showing to what extent Hayek was talking about these concepts. Seeing the similarities and differences between hierarchical and scale-free networks helps one understand how they come about, and in what contexts.

The Ethical and Economic Case Against Sweatshops: A Critical Assessment

by Matt Zwolinski

written with Benjamin Powell; forthcoming in the Journal of Business Ethics

During the last decade, scholarly criticism of sweatshops has grown increasingly sophisticated. This article reviews... more During the last decade, scholarly criticism of sweatshops has grown increasingly sophisticated. This article reviews the new moral and economic foundations of these criticisms and argues that they are flawed. It seeks to advance the debate over sweatshops by noting the extent to which the case for sweatshops does, and does not, depend on the existence of competitive markets. It attempts to more carefully distinguish between different ways in which various parties might seek to modify sweatshop behavior, and to point out that there is more room for consensus regarding some of these methods than has previously been recognized. It addresses the question of when sweatshops are justified in violating local labor laws. And it assesses the relevance of recent literature on coercion and exploitation as it applies to sweatshop labor. It concludes with a list of challenges that critics of sweatshops must meet to productively advance the debate.

Alfred Schütz – From Husserl to Austrian Economics (CZ)

by Petr Špecián

ŠPECIÁN, Petr. Alfred Schütz – od Husserla k Rakouské ekonomii. E-logos [online], 2011, roč. 17, č. 9. 25 s. ISSN 1211-0442.

The article recapitulates the foundations of the thoughts of Alfred Schütz who tries to synthesize the approaches of... more The article recapitulates the foundations of the thoughts of Alfred Schütz who tries to synthesize the approaches of Edmund Husserl and Max Weber in the field of the methodology of the social sciences. Although Schütz follows Husserlian phenomenological approach very closely in the early period of his work, it is already possible to see a specific emphasis on empirical character of any scientific investigation. This emphasis is inspired by the Weberian arguments and opposes the opinion of another from Schütz’s great teachers - Ludwig von Mises. The article gradually analyses the key features of Schütz’s own method and shows the fundamental importance of typification and anonymisation in our everyday as well as scientific knowledge of the world we live in. Schütz arrives from the phenomenological starting points to the problematic of Weber’s ideal types and at the end on the ground of Austrian economics represented by von Mises where he tries to modify some of Mises’ unattainable standpoints regarding the fundamental division between theoretical and historical branches of social science.

Free Markets and Deregulation

by Marcio Chalegre Coimbra

Published by Hayek Institute (Vienna, Austria) - (2007)

Entry Barriers and Innovation in the Market for Governance

by Brad Taylor

Co-authored with Patri Friedman

A number of theorists have recently argued that Tiebout competition can act as a discovery mechanism and produce... more A number of theorists have recently argued that Tiebout competition can act as a discovery mechanism and produce institutional innovation. We extend these arguments by considering the extent to which barriers to entering the governance market limit innovation. If competition among governments is to produce new and better ways of governing, many diverse governance ideas need to be tested, and we argue that existing polities will generally be less willing and able to experiment with new institutions than newly-formed and relatively young jurisdictions. Organizational inertia and a rational desire to avoid the high cost of failed reform mean that most radical institutional innovation will come from new entrants in the governance market rather than the reform of incumbents. We provide evidence from American history, showing that the emergence of near-universal adult suffrage – the removal of economic, racial, and gender qualifications on the franchise – was driven by the formation of new polities rather than the reform of existing ones.

Seasteading and Institutional Evolution

by Brad Taylor

Co-authored with Patri Friedman

We extend the two-level understanding of politics formulated by public choice theorists by adding a third level – the... more We extend the two-level understanding of politics formulated by public choice theorists by adding a third level – the competitive environment in which governments are embedded. We argue that it is this level which ultimately determines the quality of rules and conclude that virtually all forms of political activism are focused at the wrong level. Existing systems are resistant to reform, and this means that many other forms of activism are doomed to failure or relative insignificance. Seasteading – the establishment of autonomous communities on the ocean - on the other hand, sidesteps the problems of reform and has the potential to radically improve government performance. Moreover, the ocean has another important benefit – low costs of moving large structures – with the potential to make the governance industry more competitive in the long run.

Seasteading: Institutional Innovation on the Open Ocean

by Brad Taylor

Co-authored with Patri Friedman

We develop a dynamic theory of the industrial organization of government which combines the insights of public choice... more We develop a dynamic theory of the industrial organization of government which combines the insights of public choice theory and a dynamic understanding of competition. We argue that efforts to improve policy should be focused at the root of the problem – the uncompetitive governance industry and the technological environment out of which it emerges – and suggest that the most promising way to robustly improve policy is to develop the technology to settle the ocean.

Reasonable Homunculi Can Disagree: The Impossibility of Welfare Economics

by Brad Taylor

This paper draws on the “preference reversal” literature in psychology and behavioural economics to argue for the... more This paper draws on the “preference reversal” literature in psychology and behavioural economics to argue for the impossibility of welfare economics. The effect of normatively-irrelevant contextual factors shows that humans do not have a coherent preference function which pre-exists and informs choice. Every choice is a constructive act which forces us to choose among incommensurable values: choice creates preference. This rules out the possibility of a value-free welfare economics and forces social scientists wishing to make normative conclusions to engage in indeterminate moral reasoning.

Part 2: Filling in the Gaps: an interview with Dr. Joan Pope

by Rachael Hains-Wesson

Written by Rachael Hain-Wesson and edited by Jane Gronow for Lowdown magazine

Hayek's speculative psychology, the neuroscience of value estimation, and the basis of normative individualism

by Don Ross

Forthcoming in L. Marsh, ed., HAYEK IN MIND

Purpose: to review the significance of Hayek’s argument, in The sensory order, from a connectionist theory of mental... more Purpose: to review the significance of Hayek’s argument, in The sensory order, from a connectionist theory of mental architecture to descriptive and normative individualism.

Methodology / approach: the chapter reconstructs Hayek’s argument, then replaces Hayek’s premises about mental architecture with premises derived from the recent neuroscience of reward and consumption, then explains why the argument no longer goes through.

Findings: Hayek’s abstract mental architecture was closer to adequacy than most subsequent competing alternatives produced by philosophers. His argument from this architecture to individualism is valid. However, we must now supplement the abstract architecture with complexities drawn from recent neuroscience. These show the argument to be unsound. However, if commitment to descriptive individualism is abandoned, then a new argument from psychological premises to normative individualism is available.

Social implications: there is a good argument from psychological premises to normative individualism; but normative individualists should not try to defend their position by resting it on the supposed truth of descriptive individualism.