Pat Gunning's Praxeological Economics Home Page
This page gives students of praxeological economics, or subjectivist economics, access to a set of papers on the meaning of the subject, to my working papers, to other unpublished works, and to quotations from neglected economists. It also summarizes and tells how to obtain published papers and books. Finally, it contains a set of links to other subjectivist-type writings, including web-published works of the early Austrian economists. Much of my work relates in some way to the concept of entrepreneurship, particularly as understood by "new subjectivist revolutionaries," Ludwig von Mises, Frank Knight, and Herbert Davenport. Students of economic methodology and history of economic thought should also be interested in this work. Naturally, I would appreciate comments, criticism, or dialogue on any of the writings.
Table of Contents
What is Praxeological Economics? (Several Essays)
Recent Publications: Personal Copies Available Through EMail
Working Papers in Subdirectory
Selected Quotations and Interpretations of Neglected Subjectivists
Links to Subjectivist-Type Writings
Knowledge and Entrepreneurship: A Textbook Project in Microeconomics
Recent Publications: Personal Copies Available Through EMail
"Ronald Coase’s Method of Building More Realistic Models of Choice." Review of Political Economy. 14: 2, 2002 (with Bingyuang Hsiung )
"New Subjectivist Economic Theory and Public Finance." Public Finance and Management. 1:3, 2001.
"The Property System in Austrian Economics: Ronald Coase's Contribution," Review of Austrian Economics (2000)
"Roy Cordato's "Austrian" Critique of Coase on Social Cost," Review of Austrian Economics (2000)
"H. J. Davenport's Loan Fund Theory of Capital," Journal of the History of Economic Thought. September, 1998.
"Herbert Davenport on the Single Tax," American Journal of Economics and Sociology, volume 56, #4, 1997.
"Herbert J. Davenport's Transformation of the Austrian Theory of Value and Cost," Perspectives on the History of Economic Thought, Volume Fourteen, London: Routledge 1997.
"Ludwig von Mises's Transformation of the Austrian Theory of Value and Cost," History of Economics Review, No. 26 Winter-Summer, 1997.
"The Theory of Entrepreneurship in Austrian Economics," in Keizer, W., Tieben B. and R. Van Zijp (eds.), Austrians in Debate, London, Routledge, 1997.
"Entrepreneurists and Firmists: Knight vs. the Modern Theory of the Firm," Journal of the History of Economic Thought, March, 1993.
"The New Subjectivist Elucidation of Entrepreneurship," Entrepreneurship, Innovation, and Economic Change, Vol. 1, No. 3, September, 1992.
"The Meaning of Entrepreneurship in Economic Theory: Historical Perspective," Entrepreneurship, Innovation, and Economic Change, Vol. 1, No. 2, June, 1992.
Working Papers ( abstracts below )
Papers on Entrepreneurship and the Development of the Austrian Theory of Value and
Cost
Papers on Equilibrium
Papers on Austrian Welfare Economics
Papers on Capital and Interest
Papers on Coase
Papers on the Trade Cycle, Credit, Money, and Banking
Miscellaneous Papers
Papers on Entrepreneurship and the Development of the Austrian Theory of Value and Cost
The Praxeological Concept of International Entrepreneurship
Profit, Entrepreneurship, Material Capital and Equality
The Praxeological Entrepreneur
Herbert J. Davenport's Transformation of the Austrian Theory of Value and Cost
The Idea of the Entrepreneur Role as Distinctly Human Action: A History of Progress
Israel Kirzner's Entrepreneurship
Equilibrium in Ronald Coase's Method
The Logical Concept of Equilibrium
Papers on Austrian Welfare Economics
Roy Cordato's "Austrian" Critique of Coase on Social Cost
The Property System in Austrian Economics: Ronald Coase's Contribution
Austrian Welfare Economics?: A Misesian Response
How to Be a Value Free Advocate of Laissez Faire: Ludwig von Mises's Solution
Praxeology, Economics and Ethical Philosophy
Papers on Capital and Interest
Time Preference and Entrepreneurship: Ludwig von Mises on the Components of Market Interest
Austrian Non-Material Capital Theory and Loan Markets
Entrepreneur's Net Worth: Mises's Praxeological Concept of Capital
H. J. Davenport's Loan Fund Theory of Capital
Roy Cordato's "Austrian" Critique of Coase on Social Cost
Equilibrium in Ronald Coase's Method
Ronald Coase's Method of Constructing More Realistic Models of Choice(With Bingyuang Hsiung)
The Property System in Austrian Economics: Ronald Coase's Contribution
Papers on the Trade Cycle, Credit , Money, and Banking
Identifying the Austrian Trade Cycle in the Historical Data
Competition and Predatory Pricing
Ludwig Von Mises on Economics, Ideology, World View and the Aim of Economics
What it Means to Be an Historian of Economic Ideas
The New Subjectivist Economic Theory and Public Finance
The Praxeological Concept of International Entrepreneurship
This paper applies the concept of praxeological entrepreneurship to international economics. Praxeological entrepreneurship is the personification of the distinctly human features of the interaction of human beings under the conditions specified in the definition of the hypothetical pure market economy. The paper begins by attributing the technological progress and the growth of potential wealth to (a) distinctly human action and (b) the institutions associated with the market economy. It proceeds to describe the praxeological concept of the entrepreneur and to show how it is used in ordinary economics. Then it applies this procedure to the study of several issues in international economics. First it presents an addendum to the principle of comparative advantage. Next it describes a procedure for analyzing a nation's trade barriers. Then it shows how to use the concept of praxeological entrepreneurship to compare a two-nation global pure market economy with a two-nation global market economy in which the two nations have different policies toward liability for pollution.
Ronald Coase's Method of Constructing More Realistic Models of Choice (With Bingyuang Hsiung)
The goal of this paper is to present and defend the thesis that Ronald Coase's major contributions to economic theory are best understood by recognizing the distinct method he used to construct more realistic models of choice. We call his method thebenchmark-comparison method. It consists of constructing models of choice and then using the models as benchmarks in the further investigation of economic interaction. The further investigation entails either (1) comparing the benchmark models with observed interaction or (2) constructing additional models of choice which may themselves function as benchmarks.
The paper first describes the method. Then it demonstrates how Coase used the method in
his two most famous papers. It goes on to show how an understanding of the method helps
to confirm Coase's own hypothesis about the continuity in his thought. Finally the paper
discusses the literature. It assesses Coase's critique of Milton Friedman's positivist
methodology and it discusses a recent paper on Coase's methodology.
Roy Cordato's "Austrian" Critique of Coase on Social Cost
In his book on Austrian welfare economics, Roy Cordato uses what he describes as Austrian welfare economics as the basis for a scathing criticism of the Coasean approach to making judgments in tort cases. His criticism claims that the Coasean approach is both unrealistic and normative. Moreover, it would introduce uncertainty, thereby reducing individuals' freedom in pursuing their goals through the exchange process. To avoid all of these problems or at least to better deal with them, the economist who is interested in giving advice to judges ought to advocate a rule of strict liability regarding invasions of real (i.e., material) property. He claims that this rule is derived from Austrian economics.
This paper, which takes a "different" Austrian perspective, makes several arguments
against Cordato. First, it argues that his recommended rule would not achieve the goal that
he sets for it. It would increase the freedom of some people while reducing the freedom of
others in pursuing their goals. Second, it argues that his criticism of Coase is misplaced.
Contrary to Cordato's claim, Coase has not advocated day-to-day interventions in the
market system based on cost-benefit calculations that assume general competitive
equilibrium. On the contrary, like the Austrians, he has emphasized the difficult knowledge
and calculation problems associated with this. Also, he has pointed out the preponderance
of empirical evidence against such interventions. Moreover, Coase's recommendations do
not concern day-to-day interventions at all. Rather, he has been concerned with the
institutional structure, most especially with the initial delimitation of rights. This concern,
which implicitly takes account of uncertainty, immunizes Coase's analysis from Cordato's
uncertainty critique.
The Property System in Austrian Economics: Ronald Coase's Contribution
This paper argues that contrary to Roy Cordato's claim, Ronald Coase's work on the
"problem of social cost" is an important contribution to Austrian economics. Coase
identified a criterion that can be used to establish initial legal rights to control actions that
have external effects. In other words, he discovered a criterion that, in some cases, can be
directly applied to help establish a property system when there is none. The criterion also
helps a government adapt, or maintain, a property system in light of continuing changes
that are characteristic of the entrepreneur economy. Cordato's anti-state ethical economics,
which he used to criticize Coase, is a deviation from the century-old tradition of Austrian
economics. Menger, Mises and Hayek saw economics as a body of logical knowledge that is
value free. In addition they recognized a role for government in defining legal rights and in
maintaining the property system in light of changing conditions. Accordingly, it is wrong to
invoke "Austrian economics," properly understood, to criticize this aspect of Coase's work.
In this paper, I argue that Cordato has followed a deviant and troubling path by trying to
construct an Austrian economics based on ethics, that he has failed to understand that a
changeable property system is a prerequisite for the market economy, and that he has
correspondingly failed to recognize Coase's contribution to the problem of how to maintain
the property system in light of continuing change.
Equilibrium in Ronald Coase's Method
The aim of this paper is to describe the critical role that the concept of equilibrium played
in Ronald Coase's two revolutionary papers on the firm and on social cost. He introduced
his paper on the firm with a concept of equilibrium in which individuals were assumed to
adjust instantaneously to changes via the price mechanism. He attributed this concept to A.
Salter but Salter's concept can be traced further to J. B. Clark, who provided a
methodological foundation for understanding its role in economic analysis. Later in
history, the equilibrium was employed in rational expectations theory. Coase's paper
expanded the Salter model to include adjustments to changes by means of firms. His paper
on social cost expanded it further to include direct government regulations, rights to
control actions that have external effects, and legislation.
Time Preference and Entrepreneurship: Ludwig von Mises on the Components of Market Interest
This paper shows how Ludwig von Mises distinguished the components of the market rate of interest and why such a distinction is important. His image of the evenly rotating economy (ERE) played an indispensable role. On the one hand, it enabled him to isolate entrepreneurship by means of a contrast with the robots of the ERE. On the other hand, it enabled him to identify a semblance of praxeological time preference by constructing an image of the ERE interest rate, which he called "originary interest."
The ERE and originary interest were essential elements in his procedure of bridging the gap between praxeological time preference and the loan interest rates in the market economy. Ultimately, he was able to distinguish three components of market interest rates: the social time preference component (originary interest), the entrepreneurial component, and the price premium (or inflationary-deflationary) component.
These components were integral parts of Mises's revised presentation of the trade cycle
theory in Human Action. In other words, without an understanding of the method Mises
used to derive the components -- i.e., without an understanding of the role of the ERE in
Mises's method -- one is unprepared to comprehend the latest version of the Austrian trade
cycle theory. The paper demonstrates this with citations from Human Action. It also
discusses a recent critique of Mises's effort by Peter Lewin.
Praxeological Time Preference and Interest: Ludwig von Mises's Contribution to the Theory of Interest
Mises's concept of praxeological time preference has been confused by neo-Austrians with
the idea of positive time preference. Praxeological time preference refers to the idea that
individuals acting in the consumer role distinguish between actions on the basis of whether
they expect the effects to be felt sooner or later. Positive time preference goes beyond this to
claim that some set of goods, money, or utility would always be preferred in the present to
the same set in the future. Neo-Austrian economists have written as though the assumption
of positive time preference is needed to explain a "positive rate of interest" in the market
economy. This paper has three aims. The first is to show that Mises did not subscribe to the
positive time preference view. The second is to discuss the claims to the contrary in order to
show how this mistaken interpretation of Mises has evolved. The third is to present the
basic assumptions that are necessary to deduce a positive rate of interest under the
conditions of the pure market economy.
Austrian Welfare Economics?: A Misesian Response
Several neo-Austrian economists have proposed various standards for a special welfare economics to rival the welfare economics of the economics profession. This paper shows that two of these (Tyler Cowen and Israel Kirzner) contain implicit and vague definitions of social welfare that violate methodological individualistic principles. In addition, it argues that neo-Austrians misconceive the new welfare economics largely because they misconceive the role of equilibrium. Next, it shows that these neo-Austrian efforts are fundamentally different from the recommendations of Ludwig von Mises. Mises advised that economists should evaluate the logic of the arguments presented by others and should determine whether the arguments are relevant to the goal that the others want to achieve. They should evaluate arguments, not policies. Finally, it shows that Murray Rothbard's reconstruction of welfare economics is not based on Mises or subjectivism and that to follow it would render the fundamental task of economics, as Mises conceived it, impossible to carry out.
How to Be a Value Free Advocate of Laissez Faire: Ludwig von Mises's Solution
Ludwig von Mises is often regarded as a "champion" of laissez faire. This characterization seems to contradict Mises's clear statements that economics is value-free. The aim of this paper is to resolve this apparent contradiction. We accomplish this by distinguishing, as Mises did, between the advocacy of specific laissez faire policies and the advocacy of a laissez faire ideology vis Á vis the alternative ideologies of socialism and interventionism. Mises argued that the logic of a value-free economics could be used to show that socialist and interventionist policies would not achieve a goal that the socialists and interventionists implicitly or explicitly aim to achieve, that of progress in terms of material wealth for the members of the society. Thus, Mises resolved the contradiction by shifting the debate from the welfare analysis of particular policies to a logical analysis of the ends of a particular ideology and the means available to achieve those ends.
In a seminal paper in neo-Austrian economics, Murray Rothbard criticized Mises. This
paper analyzes Rothbard's argument partly as a means of elucidating Mises's views. It
argues that Rothbard misinterpreted Mises and quoted him out of context. Rothbard failed
to adequately support his claim that Mises held the beliefs that Rothbard attributed to him.
Moreover, Rothbard’s paper undermined the value-freedom that Mises regarded as a
crucial characteristic of economics.
Austrian Non-Material Capital Theory and Loan Markets
This paper explores the non-material definitions of capital that were used by Carl Menger
and especially Ludwig von Mises. Menger introduced the idea that capital is a
businessperson's net worth devoted to earning income. Mises appears to have copied this
definition, with added emphasis on the role of the entrepreneur. Mises also integrated this
definition with a theory of loan interest. In the latter, he stressed time preference and the
time structure of interest rates; entrepreneurship and economic calculation; how injections
of money affect decision making; and the problem of aggregating the separate, private net
worth of different individuals. It is argued that this notion of capital is superior to that of
the material definitions used by other Austrian writers. It is superior because (1) it directs
one's attention to higher order goods and time, (2) it avoids all possibility of confusing
Austrian capital theory with the classical notion that interest is the price of capital goods,
(3) it neutralizes any concept of "social capital," and (4) it places the focus on
entrepreneurship, the entrepreneur point of view, and the entrepreneur process.
Entrepreneur's Net Worth: Mises's Praxeological Concept of Capital
In Human Action, Ludwig von Mises employed two radically different notions of capital. The first was equivalent to what accountants call net worth. In calculating her profit and loss, the individual conceives of her income in terms of a change in net worth. If we shift the focus to the income stream, net worth (capital) can be said to refer to the capitalized value of that stream. Thus, the concept of capital as net worth implies capital accounting. This notion was truly subjectivist and fully consistent with the subjective theory of value and cost that was initiated by the early Austrian economists. The second notion was produced material factors of production.
Mises recognized that the basis for distinguishing produced material factors from other non-produced and non-material factors was not consistent with the Austrian theory of value and cost. With some caution, he nevertheless employed the second notion, especially in his discussion of the relationship between economic action and time. One possible explanation for this was his desire to deal with the capital controversies of the period.
This paper carefully analyzes the passages in Human Action in which the capital goods
notion is used. It concludes Mises unwisely restricted what could have been a broader
discussion that would account for all factors of production (i.e., roughly higher-order
goods, in Carl Menger's terminology). The significance of this lies in the fact that modern
neo-Austrian economists have apparently neglected Mises's first notion and accepted his
second notion of capital goods. Or they have ignored Mises altogether and employed the
capital goods notion in their work. By doing so, they risk neglecting the subjective theory of
value and cost in their discussions of the relationship between time and economic action.
The paper also shows that some of Mises's capital goods' discussions are trivial and out of
place.
The Praxeological Entrepreneur
The praxeological entrepreneur refers to action with regard to the economic data.
Although Ludwig von Mises (1966) provided hints concerning how praxeological
entrepreneurship could be defined and elucidated, he did not himself show do this. The
paper expands on these hints by developing a more complete concept of the praxeological
entrepreneur, based on his discussion of the nature and method of praxeology and
economics. It distinguishes the praxeological concept from the market process
entrepreneur that has been commonly used in the neo-Austrian literature. It explains why
the latter is less fundamental and shows how to use the former to explain economic
progress under the conditions of the pure market economy.
H. J. Davenport's Loan Fund Theory of Capital
American Herbert Davenport's (1861-1931) theory about how market interest rates are determined in an environment of free banking has three characteristics: (1) the praxeological idea of the entrepreneur point of view, (2) the reservation demand approach to the supply of loanable funds, and (3) the assumption that the bulk of money under a free market banking regime would consist of monetized debt.
Every actor begins his participation in the market economy with preferences, including time preference, knowledge of past prices, beliefs about the marketability of his current wealth, and beliefs about how he can gain by saving his wealth in different ways. We combine these characteristics by conceiving of a collection of reservation demands for funds, which we call private capital. Private capital is the source of funds that are ultimately used in business. Before they reach that stage, money must be lent, rights must be sold for loanable funds, and non-monetary wealth, and especially debt, must be monetized through banks. By providing guarantee and endorsement, individuals enable banks to monetize the debt and, by this process, to add to the loanable funds that are made directly available by savers. The resulting supply of loanable funds is partly borrowed by consumers and partly available for business. The loan fund is the amount that business borrows. Market interest rates are determined in the loanable funds market as a whole. Free market banks perform the combined functions of guaranteeing promises and creating credit money. The latter function can lead to a trade cycle by changing individuals' time preference.
Davenport was tagged with an undeserved reputation by Frank Fetter, in an apparently
self-serving review of Davenport's major work. Fetter was a well known capital and
interest rate theorist of the era. The paper provides an extended refutation of the Fetter
criticism. It also criticizes references to Davenport in the neo-Austrian literature.
Herbert J. Davenport and the American Transformation of the Austrian Theory of Value and Cost
American Herbert Davenport (1861-1931) transformed the subjectivist theory of Carl
Menger. The subjectivist theory sought to trace the cost of supply, or the separate prices of
the factors of production, back to the preferences of the individuals acting in the role of
final consumers of goods. Davenport transformed the theory by arguing that the tracing
procedure must always pass through the minds of individuals acting in the role of the
entrepreneur who takes account not only of preferences but also the means of satisfying
those preferences. Davenport criticized the early Austrians for their marginalism and
anticipated the later thought of Friedrich Hayek and especially Ludwig von Mises. In spite
of his important contribution to subjectivist thought, his work is similar and has not yet
been incorporated into subjectivist economics.
The Logical Concept of Equilibrium
The logical equilibrium is an image of robots behaving in a uniform way again and again
yet in a timeless state. It is a descendant of John B. Clark's static equilibrium and its
antithesis is the Walrasian general equilibrium, which is taken to be a simulation of a real
market economy. Properly understood, it is part of what Ludwig von Mises called the
method of imaginary constructions, a procedure that entails constructing counterfactuals
to comprehend action. It helps one isolate appraisement and uncertainty bearing as
fundamental properties of the entrepreneur role, the mandatory of the consumer role. One
aim of this paper is to demonstrate this characteristic of the evenly rotating economy. A
second aim is to show that Mises's own application of the evenly rotating economy as an
endpoint, or "final state of rest," was unimaginative and misleading. It criticizes Mises for
using the evenly rotating economy in conjunction with the promoting entrepreneur to refer
to an equilibrium toward which the market process is tending. It also discusses Mises's idea
that the evenly rotating economy is useful in the study of change and his use of equilibrium
in market process analysis to contrast logical economists with mathematical economists.
The New Subjectivist Economic Theory and Public Finance
From the viewpoint of the new subjectivism, public finance is the study of how various
forms of government action effect entrepreneurship. After briefly describing the
development of the new subjectivism, this paper analyzes four branches of public finance:
the theory of revenue exaction, the theory of externalities, the theory of public goods, and
the theory of collective decision-making.
The Idea of the Entrepreneur Role as Distinctly Human Action: A History of Progress
This paper concerns the concept of the economic entrepreneur as the personification of the distinctly human, as opposed to robotic or exclusively behavioral, features of the interaction under the conditions specified in the definition of the hypothetical pure market economy. It presents a history of the gradual development of this concept. Beginning with the mid 18th century, it traces the concept through the early Austrian economists, Clark, Hawley, Davenport, Schumpeter and Knight. It culminates with Ludwig von Mises's treatise on Human Action (1966).
Since Mises was the first to actually define entrepreneurship in this way and to provide hints about
how to elucidate it, the paper includes a more detailed description of his contribution. Of
particular significance is his "method of imaginary constructions," in which a contrast is made
between an imaginary robot economy and an economy comprised of human actors, the
characteristics of whom the economist knows on the basis of intuition and experience.
Predatory Pricing as an Outcome of Competition
This is a brief subjectivist analysis of a story about predatory pricing written by Professor
Randall Holcombe. Predatory pricing means pricing aimed at driving a competitor out of
business in order to be able to charge a higher price than otherwise.
What it Means to Be an Historian of Economic Ideas
My view of this subject. It discusses the meaning of cause and effect, distinguishes between
history and (natural) science, defines an idea about distinctly human interaction, and
selects a meaning for economics. Based partly on an interpretation of Jean Piaget's theory
of human development.
Ludwig Von Mises on Economics, Ideology, World View and the Aim of Economics
Brief description of the meaning of these ideas in Mises's Human Action (1966).
Israel Kirzner's Entrepreneurship
Israel Kirzner defines the entrepreneurial element in human decision making as the behavior of following a spontaneous, subconscious hunch. The result is a greater satisfaction of wants, as viewed from the standpoint of superior insight. The entrepreneurial element also corresponds to what Kirzner calls alertness to hitherto unrecognized opportunities.
In a market economy this entrepreneurial element becomes manifest in arbitrage.
Arbitrage is the subconscious discovery of price differentials as viewed from the standpoint
of a general equilibrium. Entrepreneurial actions, or arbitrage, are said to lead to a general
equilibrium. Thus, the study of entrepreneurship is the study of how subconscious
arbitrage in a disequilibrium situation lead to equilibrium. This essay is basically a
description of Kirzner's image of entrepreneurship without comment. It is not an
assessment
Ludwig von Mises used the term "praxeology" to mean "theory of human action." A
theory of human action consists of the logical conclusions that can be drawn on the basis of
assumptions that "everybody knows to be true from their own actions." In describing this
branch, Mises assumed that everyone understands a priori the use of means to achieve
ends. "Action" refers to precisely to the thinking and choosing that people associate with
this use of means to achieve ends.
Praxeology, Economics and Ethical Philosophy
In his book Human Action (1949), Mises argued that praxeology is value free since it is a set of logical deductions from universal ideas. He also argued that economics, correctly understood, is a branch of praxeology. Therefore, it is also value free. In other words, it contains no ethical premises or implications aside from those that one might base on the knowledge obtained by working through the logic.
This paper describes Mises's argument and extends it. It constructs a diagrammatic scheme
for classifying a number of branches of praxeology. It shows the relationship
betweentheory (logical deductions from assumptions) and history (the interpretation of
historical events by referring to the means and ends of historical individuals). Finally, it
identifies a new branch of praxeology called "the theory of interaction among consensual
ethical philosopher." The purpose of identifying this new branch is to evaluate an
argument by Hans Herman Hoppe that praxeology can be the basis for an ethical
philosophy. The paper also criticizes Hoppe's claim that the seeds of this argument are
contained in Mises's work.
Hayek, Free Banking, and the Commodity Money Syndrome: Toward A Praxeological Theory of Credit and Money
F. A. Hayek predicted that free banking would result in the emergence of a medium of exchange based on the right of a holder to exchange a unit of the medium for a fixed set of commodities. In this, he conforms to the norm among writers in Austrian macroeconomics of linking money tightly to commodities. A different approach was followed by some relatively obscure American writers, who claimed that macroeconomic thinking ought to be based on a theory of credit and fiduciary money. These writers developed a theory of the emergence of money that stood in opposition to Carl Menger's theory based on goods with different degrees of marketability. This paper reviews the Austrian theory and the credit theory of free banking. It defends the argument that a realistic Austrian theory of free banking under modern conditions should be based on a theory of credit. In such a theory, entrepreneurship would have free reign to invent contractual arrangements to support a credit money that yields a return to holders and users in one form or another. In addition, there would be innovation in the property system to reflect the demand for changes in contract law that are more amenable to entrepreneur-initiated developments in the credit system.
Identifying the Austrian Trade Cycle in the Historical Data
This essay presents a model of the effects of an increase in the quantity of money
introduced through loan markets under rigid assumptions. It traces those effects through
loan markets and resource markets. Its main contribution is its focus on two different
consumer goods industries: a durable good industry with a long period of production and a
perishable good industry with a short period of production. It is especially concerned with
the theory’s deduction that there will be a shortage of the latter good during the
contractionary phase of the cycle.
The Failure of the New Subjectivist Revolution: A Critical Essay on the Economic Theory of Ludwig von Mises's Economics, Fort Myers, Fl. and Taipei, Taiwan: Nomad Press, 1994.
Abstract
Ludwig von Mises was the last internationally recognized head of the "Austrian" school of economics. This book maintains that he identified the epistemological foundation for economics that should have led to a second subjectivist revolution. But this revolution never occurred. Why? The author seeks the answer in Mises's own writings about the market economy. He argues that after introducing the methodology needed to revolutionize economic theory, Mises sabotaged his own enterprise by using concepts and definitions that were inconsistent with his methodological contribution. In the course of making this argument, the author summarizes the new subjectivism and lays out three principles of subjectivism described by social theorist Alfred Schuetz. He then proceeds to thoroughly analyze Mises's artificial constructs of economies, his definition of the market economy, the entrepreneur, profit, and the market process. He also assesses Mises's assumption about property rights and the tendency toward equilibrium.
Price: US$50
The New Subjectivist Revolution: An Elucidation and Extension of Ludwig von Mises's Contribution to Economic Theory, Totowa, New Jersey: Rowman & Littlefield, 1990. Now at Fort Myers, Fl. and Taipei, Taiwan: Nomad Press, 1990.
Abstract
This book reviews Austrian Economist Ludwig von Mises's seminal contributions to economic methodology and to our understanding of the concepts of equilibrium, the entrepreneurs, profit and loss, saving, interest, and coordination. According to Mises the main goal of economics is to elucidate entrepreneurship, the procedures human actors use to cause the economic functions of production, consumption, saving, and factor-supplying to be performed in a market economy. The book describes Mises's new subjectivism and identifies and clarifies many of the concepts that appear elusive in Mises's Human Action. Following Mises, it shows how the new subjectivism is derived from the old subjectivism, or the subjective theory of value, and how it is a revolution against both positivism and elitism in economics. It goes on to extends Mises's new subjectivism in several ways. It presents a systematic discussion of the characteristics of entrepreneurship, it examines the complex and neglected relationship between saving and uncertainty-bearing; it presents clear and unequivocal definitions and illustrations of the concepts of profit and loss, which play a major role in any effort to elucidate entrepreneurship. And it outlines economic teleology, a method of elucidating entrepreneurship that was only implicit in Human Action.
Price: US$50
How To Order
Send email to boss@nomadpress.com
Knowledge and Entrepreneurship: A Textbook in Microeconomics (some incomplete chapters).
Selected Quotations and Interpretations of Neglected Subjectivists
Davenport, Herbert J., Value and Distribution, Chicago: University of Chicago Press, 1908.
Davenport, Herbert J., Economics of Enterprise, New York: Macmillan, 1914.
Taylor, W. G. Langworthy The Credit System, New York: Macmillan, 1913.
Gunning’s Address
J. Patrick Gunning
Professor of Economics/ College of Business
Feng Chia University
100 Wenhwa Rd, Taichung
Taiwan, R.O.C.
Please send feedback
Email: gunning@fcu.edu.tw