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This paper analyzes the work of Ludwig von Mises in search of commonalities with complexity economics. Alternatively to the literature on the links between Austrian economics and complexity economics, this paper shows that many elements of Misesian economics, such as the notion of entrepreneurship or the characterizations of uncertainty and the market process, can be appealing to a complexity approach. Moreover, it discusses two important implications that Misesian economics may have for complexity. On the one hand, the praxeological emphasis on human purposeful action, and how this is reflected in the notion of entrepreneurship, can help remind of the importance of human intentionality and prevent complexity advocates from producing explanations of the human world drawing on mere "blind" mechanisms. On the other hand, Mises's works combining the equilibrium construct and a process-oriented perspective can inspire present complexity economics to answer relevant unresolved questions such as whether and to what extent equilibrium analysis should be employed. [ABSTRACT FROM AUTHOR]

This article explores the limits of central industrial planning through a case study of Singapore. While previous Austrian scholars have argued that successful industrial planning is impossible, and that its successes (if any) are limited to the resolution of technical problems, the positive economic record of Singapore under the auspices of its developmental state capitalism poses a strong challenge to these market-oriented perspectives. In response, I present a modest position. I concede that Singapore's industrial policy has to some extent contributed to genuine economic development but insist that its state-heavy approach has nonetheless hampered the market's entrepreneurial discovery by stifling local entrepreneurial talent and crowding out local small-medium enterprises. The top-down model has also limited the economy's adaptive potential. I draw from productivity, entrepreneurship, and innovation data to make my case and conclude that Singapore's experience with its developmental state model comes with a significant cost, notwithstanding its impressive achievements. [ABSTRACT FROM AUTHOR]

This journal article theoretically examines the thesis of whether a government organization envisaged to, directly and indirectly, regulate the "market process" manages to fulfill its "macro functions" from a "long-run performance" perspective. Also, the proposed exercise is characterized as a public issue and therefore, for its analysis, a hypothetical-deductive exercise and formulation of conjectures is proposed in the sense of Noveck —2022—. That is, in addition to the implementation of ideas from the economic psychology of Richard Thaler —1986— , an analysis matrix is created to explore whether the actions of an entity such as the Superintendence of Industry and Commerce of Colombia (SIC), randomly selected as an example, can contribute to the "market process" by automating the implementation of its strategic plan through the introduction and/or deepening of the use of artificial intelligence (AI) and other advanced analysis tools that add value. [ABSTRACT FROM AUTHOR]

Carl Menger's Grundsätze der Volkswirtschaftslehre was published 150 years ago, in 1871, marking the beginning of the Austrian School. Menger's contribution was not only part of the beginning of the "marginalist" turn in economics, but to the unique "subjectivist," market process-oriented aspects of the "Austrian" tradition, that also includes a focus on unintended institutional evolution. Menger was concerned with developing what he called the "exact laws" of economics that were most general and universal in their quality and presence. But, contrary to some of his Historical School critics, Menger also emphasized the "empirical-realistic," or historical and institutional, contexts within which the laws of economics play themselves out. Menger, as well, highlighted the importance of value-freedom in theoretical and applied economic analysis. But in spite of this, Menger believed that human nature and historical experience suggested a wide variety of economic policy purposes and the means to them. This comes out most clearly in the lectures on political economy that he delivered to Austrian Crown Prince Rudolf in 1876, and in an "anonymous" monograph on the Austrian aristocracy that Menger co-authored with Prince Rudolf in 1878. Menger's lectures show him to be a strong advocate of economic individualism and fairly unregulated free markets, with warnings against the dangers from political "paternalism." But Menger was not an extreme advocate of laissez-faire, and his proposals for fiscal and bureaucratic management of the Austrian state were, surprisingly, rather "un-Austrian." Yet, his contributions still resonate with great significance a century and a half after the appearance of the Grundsätze. [ABSTRACT FROM AUTHOR]

Storr and Choi (2019) present ample evidence that the market process results in outcomes that can be considered "moral", however they do not address the potential moral implications of policy interventions that place restrictions on the market process. This essay poses, and begins to answer, a related question: is it immoral to stand in the way of the market process? Insights from market process theory are used to explore this question and to identify four ways in which impediments to markets, and not markets themselves, have the potential to corrupt our moral character: 1. They prevent people from accessing the benefits markets have been shown to provide. 2. They create incentives that encourage people to practice behaviors that are considered immoral. 3. They prevent people from actively participating in the development of their own moral character. 4. They prevent us from discovering new social rules that are morally superior to the ones that currently exist. [ABSTRACT FROM AUTHOR]

Using economic reasoning, Julian Simon offered crucial insights into a range of pressing issues including the environment, immigration, and economic development. The main lesson from Simon's scholarship is that the ultimate resource does not reside in the ground (natural resources), or even in the accumulated wisdom and knowledge in books and scientific journals (human capital), but in the imagination of people. Through their purposeful actions, people turn their thoughts and aspiration into a new reality that enables immense improvements in the human condition. In making this argument, Simon articulated the core ideas of Ludwig von Mises, F.A. Hayek, and Israel Kirzner regarding the discovery and use of knowledge in society, and the role of entrepreneurship as the prime mover of progress. This paper makes this intellectual connection clear. [ABSTRACT FROM AUTHOR]

Heterodox economic approaches such as Austrian economics and market process analysis rely upon a less formalistic approach to rationality than neoclassical frameworks. We argue such looser formalism provides a unique opportunity for interdisciplinary engagement to investigating and understanding social institutions, outcomes and complex phenomenon. This introduction briefly summarizes the contents of this invited issue as effective examples of such interdisciplinarity. [ABSTRACT FROM AUTHOR]

Carl Menger established in his pathbreaking 1871 work Grundsätze der Volkswirtschaftslehre (Principles of Economics) the theoretical foundations from which all future developments in the tradition of the Austrian School of economics can arguably be traced. However, some followers working in that same intellectual tradition have found Menger's treatment of entrepreneurship lacking with respect to its systematic integration with Menger's overriding aim to connect the subjective valuations of market participants with the prices that emerge in markets. Furthermore, an apparent dichotomy has been identified in past entrepreneurship literature between the theoretical work of Joseph Schumpeter and Israel Kirzner concerning the role of the entrepreneur in driving the market from or towards equilibrium, respectively. In this paper, we demonstrate how the entrepreneurial role as identified by Menger in his Principles is in fact systematically integrated with his conception of the market process as a whole. Furthermore, the more systematic understanding of the Mengerian entrepreneur also serves to clarify and overcome at least part of the apparent dichotomy between Schumpeterian and Kirznerian entrepreneurship. In doing so, we position the Mengerian entrepreneur as a potentially unifying conception from which those working within the two divergent strands may find common roots. [ABSTRACT FROM AUTHOR]

In The Great Reversal, Philippon makes the case that competition in America has weakened during the past two decades. His book contributes to the rapidly developing literature on the macroeconomic consequences of market power. I argue that Philippon fails to convincingly support his hypothesis because (1) he does not consider competition as a process operating on several margins, with the price being only of them, and (2) the available empirical data does not unambiguously show a rise in market power. Philippon's work suffers from similar flaws as the "structure-conduct-performance" paradigm. I also incorporate recent attempts to estimate aggregate market power and explain why the methods used for such estimations are calculated by making assumptions over which margins entrepreneurs compete and suffers from serious knowledge problems. Finally, I offer an alternative view of competition, which focuses on how and at what speed rents are being dissipated instead of the markup of price over marginal cost. [ABSTRACT FROM AUTHOR]

This paper combines the market process approach developed by the Austrian School of Economics with the theory of capital as worked out by the Historical School in order to provide a suitable framework for discussing the two competing approaches to financial accounting. Within this framework, it becomes clear that the revenue-expense approach with its emphasis on actually realized, historical transactions plays an important role in creating a tendency towards market equilibrium. Net income determined according to this approach provides information to the market on where there are gaps in the price structure. The balance-sheet approach, on the other hand, and particularly fair value measurement take market equilibrium for granted. Based on fair value accounting, an equilibrium could never be accomplished in the first place. Ironically, in order to be applicable, the balance-sheet approach presupposes the perfect working of the market process, including financial reporting based on the revenue-expense approach. [ABSTRACT FROM AUTHOR]

Neoclassic economic theory regards equilibrium, whether general or partial, as a crucially important foundation of the dismal science[1]. In the view of mainstream economists, the general equilibrium framework not only an investigation of the economy in terms of its perfect qualities, but also is suitable as an end or goal of action. The Austrian school, in contrast, sees equilibrium (or the evenly rotating economy - ERE) merely as a tendency for economic activities to move us in that direction, but it is never attained. Praxeological economics has thus concentrated not on equilibrium, but on the process by which the market moves toward it. Since the process of shifting resources to meet these ends cannot be achieved spontaneously, entrepreneurship plays a key role. In Mises and Rothbard’s view, entrepreneurship involves uncertainty bearing which beyond the alertness emphasized by Hayek and Kirzner; on the other hand, unlike Lachmann looks the economy as a kaleidoscope and rejects the ERE, Mises and Rothbard regard the ERE as an indispensable way to understand the economy. [1] As Frank H. Hahn said “Whatever economics is used or thought about, equilibrium is a central organizing concept.” (Hahn 1984: 43). Many economists and philosophers of science consider mathematical neoclassical general equilibrium theory as one of the peak achievements of economics (Rosenberg, 1992). Tieben (2012) stated that policy-makers and theorists of all schools of economics all use some form of equilibrium theory to develop their ideas and support their main theoretical and political claims. Lawson (2005) indicated that the equilibrium concept is a major cause of controversy between different schools of economic thought. A.W. Bob Coats even deems it the case that “economics has been dominated throughout its history by a single paradigm – the theory of economic equilibrium via the market mechanism.” (Coats 1969: 292).

Competition is building block of any successful economy, while a cartelized economy is against the common good of society. Nowadays, developing artificial intelligence (AI) and its plausibility to foster cartels persuade governments to revitalize their interference in the market and implement new regulations to tackle AI implications. In this sense, as pooling of technologies might enable cartels to impose high prices and violate consumers' rights, it should be restricted. By contrast, in the libertarian approach, cartels' impacts are defined by government interference in the market. Accordingly, it is irrational to rely on a monopolized power called government to equilibrate a cartelized market. This article discusses that AI is a part of the market process that should be respected, and a restrictive or protective approach such as the U.S. government Executive Order 13859 is not in line with libertarian thought and can be a ladder to escalate the cartelistic behaviors. [ABSTRACT FROM AUTHOR]

The chapter aims to enhance the understanding of the development of Kirzner’s theory of entrepreneurship. To do so, elements in Kirzner’s works published up until 1973 that enclose the central points of this theory are studied. The chapter has four sections, in addition to the introduction and conclusion, that highlight the arguments that relate to Kirzner’s theory of entrepreneurship: (i) before the publication of his 1967 paper that presents the entrepreneurial function in the market process (1960–1967); between the 1967 paper and the publication of his most important book, Competition and Entrepreneurship, in 1973 (1967–1973); (iii) in Kirzner’s latest version of entrepreneurship theory as presented in his 1973 book; and (iv) the evolution of Kirzner’s thinking. The evolution of the author’s thinking regarding equilibrium and the entrepreneur is highlighted by presenting the different stages of his theory of entrepreneurship between 1960 and 1973. [ABSTRACT FROM AUTHOR]

The assumption that the telecommunications industry has natural monopoly characteristics dominated industrial policy during the twentieth century, supporting the monopolistic structure of telecommunications markets all across the world, and still prevails in many views on the economy of this field. The high level of concentration of telecommunications markets is often considered as a natural way of its development and some claim that this is a necessary condition for innovations in the industry. Meanwhile, the evolution of telecommunications in Russia after the collapse of the Soviet Union has shown quite the opposite. The industry in the country was able to demonstrate a relatively low level of market concentration, at least in some of the areas, to provide a high quality and a large variety of telecommunications services at significantly lower prices, in comparison with western countries, and shows one of the best indicators of network development in the world. While the Russian case poses quandaries for mainstream theories, the phenomenon fits the view of the Austrian school at the market process and exposes the benefits that the competitive order can bring to society. [ABSTRACT FROM AUTHOR]

In this paper, we reconsider the various states of rest within Austrian market process theory. While this theory certainly embodies a superior representation of market processes to the neoclassical general equilibrium theory, it falls short of producing a holistic theory of human action. The analysis left out those human actions that produce changes to the so-called ‘final state of rest,’ which have so far been taken as exogenous to the market process. These exogenous shocks include knowledge generation and preference shifting. However, I argue that these can and ought to be understood as market phenomena, and so belong within the scope of praxeological analysis. To capture these types of human action, I propose that a new and truly ‘final’ state of rest be introduced, which we term the ‘nirvana state of rest.’ This new state represents a ‘true’ final state, in which human action ceases because all needs, and thus all motivation to act, are completely and perpetually assuaged. Introducing this state into the analysis, we can break free from myopic analyses of mere present states of knowledge and values to observe and explain general tendencies in market processes, prices, and entrepreneurship. I also show how quarrels within Austrian circles might be resolved through this expanded, macroscopic lens.

Innovation is at the core of any market economy and it is necessary for any organization to survive in competitive environments. This article aims to discuss the current approach to innovation seen in most of the management and economics literature and it will suggest that this understanding, loosely based on Schumpeter’s ideas on creative destruction, is not capable of representing the actual dynamism seen in the markets. In order to better understand that dynamism, the market process approach of the Austrian School is presented as a substitute. The comparison indicates that adopting the market process approach, in which entrepreneurship and innovation are endogenous and not-necessarily related to breaks or shocks, leads to a much better understanding of the innovation phenomena and, consequently, and opens new paths in the understanding of the entrepreneurial role. The work concludes presenting limitations and suggestions for future research in management, and economics, and finally, some pedagogical suggestions are also given.

Lionel Robbins is mainly known for An Essay on the Nature and Significance of Economic Science, where he allegedly illustrated the neoclassical epistemology of economics, based on mechanistic maximizing behaviours of atomistic individuals whose aggregation results in the social order. Despite Robbins’s attempts to make it clear that this was not his concept of how the society works, this misrepresentation of his thought perpetuated in the methodological debates of the 1960s and is still dominant today. The aim of the paper is to challenge this caricature and illustrate the complex idea of social order held by Robbins, based on individual and collective processes of choices and a multilayer system of public institutions. [ABSTRACT FROM AUTHOR]

The notion of present value is an integral part of economics. So far, however, its rationale rests upon the well-known neoclassical assumptions of complete information and perfect rationality. The present value derives as the result of a calculation that requires the knowledge of the discount rate and the future returns of the evaluated assets. This paper presents a laboratory experiment that demonstrates that the present value of assets can also be discovered by participants of a production process endowed with incomplete information. The knowledge concerning future returns is not given to any one, but dispersed among the participants who, in addition, have no idea of their position in the production chain. In accordance with Hayek’s theory of the market process as a discovery procedure, the present value is found without any one subject being able to determine it individually. [ABSTRACT FROM AUTHOR]

Market Monetarists and free bankers tend to agree on the theoretical desirability of having a monetary system that stabilizes the flow of nominal spending in an economy. However, their ideas diverge on two related issues: (1) how should we conceive of the process in which total spending is generated, and (2) what are the best means for stabilizing the flow of total spending, however defined. In this paper, I argue that the free banking approach is superior on both accounts. Free banking theory brings to the forefront of its analysis the all-important role that individuals acting within naturally evolved monetary institutions play in facilitating microeconomic coordination. This coordination, in turn, has the unintended yet desirable consequence of producing a stable flow of spending. In this sense, free banking theory is more consistent with an "emergent-dynamic" approach to understanding macro-phenomena, as discussed in Wagner (2010, 2012). Although I argue that free banking is superior means of stabilizing the total flow of spending, I conclude that combining free banking reforms with a strict monetary rule that adjusted the supply of base money to stabilize the flow of spending in the economy as Market Monetarist propose would serve as an effective remedy for the potential problems in a free banking system stemming from changes in the demand for base money. [ABSTRACT FROM AUTHOR]