Austrian Ideas Research Articles

Examining social processes with agent-based models

It is plain that the Austrian revival that began in the 1970s has yet to succeed in convincing the mainstream of the academy to jettison their physics-based mathematical models in favor of the sort of models and forms of argumentation that contemporary Austrians advocate. Agent-based computational modeling is still in its relative infancy but is beginning to gain recognition among economists disenchanted with the neoclassical paradigm. The purpose of this paper is to assuage concerns that readers might have regarding methodological consistency between agent-based modeling and Austrian economics and to advocate its adoption as a means to convey Austrian ideas to a wider audience. I examine models developed and published by other researchers and ultimately provide an outline of how one might develop a research agenda that leverages this technique. I argue that agent-based modeling can be used to enhance Austrian theorizing and offers a viable alternative to the neoclassical paradigm.

Pluralism and heterodoxy in economic methodology

Economists work within models that are simplified depictions of reality. An argument for a pluralistic understanding of economics is that different approaches lend insight by looking at different phenomena from different viewpoints. While all economists can benefit from taking a pluralistic approach to understanding economics, Austrian school economists must be more pluralistic in their understanding and presentation of ideas than mainstream economists if they want their ideas to have an impact on mainstream economics. Despite the argument for a pluralistic understanding of economics, in research, as in other activities, specialization increases productivity. While Austrian school economists can benefit from taking a pluralistic approach to understanding economics, they are likely to be most productive in their research by specializing in the development of Austrian school methods and ideas.

Examining Social Processes with Agent-Based Models

It is plain that the Austrian revival that began in the 1970s has yet to succeed in convincing the mainstream of the academy to jettison their physics-based mathematical models in favor of the sort of models and forms of argumentation that contemporary Austrians advocate. Agent-based computational modeling is still in its relative infancy but is beginning to gain recognition among economists disenchanted with the neoclassical paradigm. The purpose of this paper is to assuage concerns that readers might have regarding methodological consistency between agent-based modeling and Austrian economics and to advocate its adoption as a means to convey Austrian ideas to a wider audience. I examine models developed and published by other researchers and ultimately provide an outline of how one might develop a research agenda that leverages this technique. I argue that agent-based modeling can be used to enhance Austrian theorizing and offers a viable alternative to the neoclassical paradigm.

TESTING TIMES FOR CENTRAL BANKS – IS THERE ROOM FOR AUSTRIAN IDEAS AT THE TOP TABLE?

Central banks are facing an unprecedented test in the wake of the credit crisis. We briefly outline prevailing theoretical frameworks and argue that central bankers effectively have a choice between three separate frameworks: Vienna, Cambridge and Chicago. Despite Austrian economics being the least acknowledged we survey increasing exposure in mainstream media, suggesting a role for a more explicit use. We provide implications for policy‐makers and claim that Austrian ideas have a place at the top table of policy debate.

The networked mind

The paper discusses the role of networks in cognition on two levels: on the level of the organization of ideas, and on the level of interpersonal communication. Any interesting system of ideas forms a network: ideas presented in a linear order (the order forced upon us by verbal expression) will necessarily convey a distorted picture of the underlying patterns of thought. Networks of ideas typically consist of a great number of nodes with just a few links, and a small number of hubs with very many links; that is, they are, to employ Albert-Laszlo Barabasi’s term, “scale-free.” Barabasi fits into a specific tradition: Hungarians had an early influence on the philosophy of networks, and on the philosophy of communication as developed at Marshall McLuhan’s Toronto Circle. In fact, this was the circle in which certain Hungarian and Austrian ideas on mediated collective thinking first came together—a telling testimony to the conditions of disturbed communication and idiosyncratic networking typical of East-Central Europe, past and present. The nodes-and-hubs pattern is characteristic, too, of social networks, in particular of scholarly and scientific networks. The paper analyses the role of “invisible colleges”—informal groups of scientific elites through whom the communication of information both within a field and across fields is channelled. By way of conclusion the notion of a new type of personality, the “network individual,” is discussed: the network individual is the person reintegrated, after centuries of relative isolation induced by the printing press, into the collective thinking of society—the individual whose mind is manifestly mediated, once again, by the minds of those forming his/her smaller or larger community.

Social embeddedness, social capital and the market process: An introduction to the special issue on Austrian economics, economic sociology and social capital

Two of the most influential concepts in social science over the past two decades have been 'social embeddedness' and 'social capital'. This essay introduces a special issue of the Review of Austrian Economics in which those concepts are examined from the perspective provided by Austrian economics. In particular, the contributors consider the compatibility of notions of 'embeddedness' and 'social capital' with the Austrian theory of the market process and explore whether reformulating those concepts in the light of Austrian ideas can contribute fresh insights.

Towards a Dynamic Resource-based View: Insights from Austrian Capital and Entrepreneurship Theory

Over the last two decades, the resource-based view (RBV) has become dominant in the strategic management field. It has often been observed that the RBV is lacking in the dynamic dimension. For example, processes of building competitive advantages by means of combining existing complementary resources in novel ways are not inquired into. We argue that the RBV may profitably draw on insights in entrepreneurship and capital theory, drawn from Austrian economists as well as Frank Knight, in order to strengthen its dynamic dimension. We link the RBV and Austrian ideas in the context of the theory of complex systems pioneered by Herbert Simon. We draw a number of implications for strategic management from this synthesis, notably into resource value and sustainability of competitive advantage.

Uncertainty, human action and scenarios

The “scenario method,” “scenario building,” or “multiple futures analysis” emerged during the last decades as a premier instrument for strategic planning and decision making in conditions of uncertainty. This article demonstrates that there is an intrinsic link between the scenario method and Austrian theory not only at the level of basic epistemological principles but also at the methodological and applied levels. The article also argues that the scenario method could easily be embraced as a part of the Austrian family of ideas and more precisely as one of the key policy applications or decision support tools informed by that school of thought. Blending explicitly and systematically the scenario method with the Austrian ideas and forcefully making the case for the scenario approach as a policy and business administration tool, is thus one of the most effective ways of reasserting the importance of Austrian insights in areas such as business studies, public policy, and organizational theory, areas that currently have a limited exposure to Austrian ideas.

Heterogeneity and Time

Abstract. Although heterogeneity and time are central aspects of economic activity, it was predominantly the Austrian School of economics that emphasized these two aspects. In this paper we argue that the explicit consideration of heterogeneity and time is of increasing importance due to the increasing environmental and resource problems faced by humankind today. It is shown that neo‐Austrian capital theory, which revived Austrian ideas employing a formal approach in the 1970s, is not only well suited to address issues of structural change and of accompanying unemployment induced by technical progress but also can be employed for an encompassing ecological‐economic analysis demanded by ecological economics. However, complexity, uncertainty, and real ignorance limit the applicability of formal economic analysis. Therefore, we conclude that economic analysis has to be supplemented by considerations of political philosophy.

Towards a Dynamic Resource-Based View: Insights from Austrian Capital and Entrepreneurship Theory

The dominant view in the strategic management field is the resource-based view (RBV). It has often been observed that the RBV is lacking in the dynamic dimension. For example, processes of building competitive advantages by means of combining existing complementary resources in novel ways are not inquired into. We argue that the RBV may profitably draw on Austrian (Misesian) and Knightian insights in entrepreneurship and capital theory, particularly in its Lachmannian manifestation, in order to strengthen its dynamic components. We link the RBV and Austrian ideas in the context of the theory of complex systems pioneered by Herbert Simon. We draw a number of implications for strategic management from this synthesis, notably into resource value and sustainability of competitive advantage.

CHRISTIANITY, THE MARKET ECONOMY AND THE LIMITS TO HUMAN KNOWLEDGE

At one time, the prevailing view amongst Christian clergy in Britain would have been sympathetic towards the spontaneous order of the market economy and not sympathetic towards socialism. The spontaneous order, would, of course, have included the rich tapestry of philanthropic organisations and mutual societies that used to provide welfare for the poor. The clergy today are not generally sympathetic towards the market order. An understanding of Austrian ideas takes us to the view that, at the very least, socialist rationalism is the common enemy of Christians and those who support a free market order.

The Rebirth of Austrian Economics: 1974–99

Twenty five years ago, Austrian economics appeared to be a ‘closed chapter in the history of economics.’ Today Austrian ideas are flourishing as never before. That is partly due to the compelling nature of Austrian ideas. But there is a good case for arguing that the ‘official rebirth’ of Austrian economics dates back to a meeting in South Royalton, Vermont in June 1974.

Seedtime for fascism: the disintegration of Austrian political culture, 1867-1918

A Framework of Reference Nation and State in Danubia - Centrifugal and Centripetal Forces in Austria-Hungary, 1867-1914 Kaiser as Political Icon The Austrian Idea Socialism, Nationalism and National Socialism - Social Democracy's Struggle with National Identity in Austria-Hungary The Final Transformation - the Impact of Bourgeois Kunst and Kapital on the Austrian Idea Into the Abyss - the First World War Socialism - Between the Shoals of Nationalism and Internationalism Interment. (Part contents).

National Memory and the "Austrian Idea" from Metternich to Waldheim

National Memory and the "Austrian Idea" from Metternich to Waldheim

The Austrian idea: An idea of nationhood in the kingdom and realms of the emperor Franz Joseph I

(1984). The Austrian idea: An idea of nationhood in the kingdom and realms of the emperor Franz Joseph I. History of European Ideas: Vol. 5, No. 3, pp. 293-305.