The Economics of Ignorance and Coordination

Transcription

1 The Economics of Ignorance and Coordination Subjectivism and the Austrian School of Economics Thierry Aimar Assistant Professor of Economics, Sciences Po Paris, University of Nancy 2 and Paris 1 Pantheon-Sorbonne, France and ESSEC Business School, France NEW THINKING IN POLITICAL ECONOMY Edward Elgar Cheltenham, UK Northampton, MA, USA

2 Contents General Introduction xi PART 1: FOUNDATIONS Introduction 1. Mises and the Austrian Tradition Positivism and Historicism: Specificity of the Social Field The Vienna Circle and the Positivist Theories: A Critical View The Refusal of Epistemological Relativism: Opposition to Historicism Analysis of the Social Field: Theory and History Apriorism, the Foundation of Theory History, Field of Understanding Practical Complementarity, Epistemological Subordination Mises and His Predecessors: Contentions and Continuities Fidelity to a Methodological Approach An Epistemological Rift Praxeology, Axiomatic System of Economics The Praxeological Model's Structure Characters Conditions Implications Praxeological Subjectivism The Reign of Wertfreiheit The Rationality of Human Action Praxeology and Psychology Preference and Indifference Action, Creator of Preference The Tendency Towards Equilibrium: A Praxeological Definition

3 vi The Economics of Ignorance and Coordination 3. Action and Interpersonal Exchange: The Limits of the A Priori Approach 41 1 Varying Forms of Interpersonal Exchange: From Barter to Money Barter, a Product of Theory and History Indirect Exchange, the Money Price Generator 43 2 Epistemological Problems with Market Exchange The Question of Subsidiary Hypotheses: The Constraints of Ignorance What Theoretical Bases for Market Economics? 49 PART 2: CATALLAXY, A RESPONSE TO IGNORANCE Introduction Market Formation 59 1 The Sensory Order: Hayek's Contribution The Mind as Classifying Structure Psychological Foundations of Subjectivity 61 2 Market and Society The Map and the Model: The Role of Pre-Sensory Experience Cultural Representations 64 3 Prolegomena and Prolongations Ideal Types: Hayek, Schiitz and the Austrian Tradition Abstract Rules and Spontaneous Order A World of Discovery 73 1 Markets, Equilibrium and Disequilibrium Information Is Not the Same as Knowledge Disequilibrium Prices Ignorance, Errors and Processes 76 2 The Entrepreneur-Promoter From the Praxeological Entrepreneur to the Market Promoter Alertness as Ability of Perception The Nature of Learning From Ignorance to Knowledge: The Role of Profit 84 3 The Institutional Dimension of Entrepreneurship Competition as a Discovery Process Free Entry Competition The'Increment of Freedom' The Myth of Social Justice 94

4 Contents vii 6. Tendency towards Equilibrium Analytical Framework Statics and Dynamics 'Exogenous Changes'and Entrepreneurship 'Equilibration'and Periods Forming Expectations Speculation and Understanding The Contribution of Cognitive Psychology The Subjectivism of Expectations Succeeding In Expectations The Entrepreneur as Creator of the Future Austrian Economics of the Firm The Hayekian View: Spontaneous Orders as Pattern Predictions Plans and Prices 133 PART 3: APPLICATIONS AND DEBATES Introduction The Debate on Collectivism The'Irrationality'of Collectivism Monetary Calculation The'Chaos'of Collectivism A Procedural Conception of Economic Systems Neo-Austrian Theory versus General Economic Equilibrium The Quantity of Information The Change in Information Computing And Mathematics: Linear Programming The Nature of Knowledge Tacit Knowledge Incentives Institutions An Alternative Reading: The Rothbard Argument Knowledge and Calculation The Systemic Impossibility of Centralized Economic Calculation 178

5 viii The Economics of Ignorance and Coordination 8. Austrian Theory of the Business Cycle First Steps of the Approach ^ Capital as Structure, Roundabout ProductibrTProcesses The Two Interest Rates The Monetary Logic of the Cycle A Monetary Mirage: The Boom The Constraint of Subjectivism: The Crisis Monetary Stability: A Default Solution Monetary Neutrality and its Limits From Gold Standard to Private Currencies The Great Debates Savings, Investment and Money: The Hayek Keynes Collision 'Equilibrium'and'Equilibriums': Hicks'Critique Real Economies versus Monetary Economies: The Hayek-Sraffa Debate Welfare Economics: Workable Definitions The Market and Satisfaction: A Procedural Approach to Welfare Exchange Producing ' Social Utility' The Kirzner Alternative: Coordination as Process Private Property as a Condition of Forming Plans: 'Catallactic Efficiency' Neo-Austrian Welfare Economics and Normativity The Argument of 'Demonstrated Preference' From Wertfreiheit to Free Market Normativity The Pre-eminence of Value Judgements 3 An Open Question: The Argument of Survival Survival and Coordination A Praxeological View of the Survival-Normativity Relation Unprescribed Normativity 241

6 Contents ix Appendix: Schumpeter and the Austrian Tradition 247 General Conclusion 255 Bibliography 257 Analytical Index 291 Index of Names 299