Austrian Methodology

Abstract

This chapter offers a synthetic account of the key methodological ideas espoused by prominent Austrian economists. It focuses on the contributions of Carl Menger, Ludwig von Mises, Friedrich Hayek, Ludwig Lachmann, and Donald Lavoie, arguing that epistemological concerns fail to encapsulate their overlapping but distinctive and complementary methodological arguments. Their methodological positions are better explained as flowing from a shared and distinctive social ontology that underlies Austrian economic theory. Austrian social ontology is distinct because of its commitment to three key concepts: radical subjectivism, sheer ignorance, and spontaneous order. The chapter then presents a stylized schema of social processes that embodies these key concepts and shows that the schema both accommodates distinctively Austrian theories and allows for a synthesis of the key methodological contributions of all the Austrian economists discussed earlier.