Evolutionary Themes in the Austrian Tradition: Menger, von Wieser and Schumpeter on Institutions and Rationality

Aréna, Richard; Gloria-Palermo, Sandye

doi:10.4337/9781847207036.00022

Cited by 8 publications

(7 citation statements)

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“…But this interpretation requires that his most popular early work, Natural Value (Wieser [1889] 1971) should not be considered in isolation from his other contributions, which too often happens. Richard Arena and Gloria-Palermo (2001) and Streissler (1988) make similar claims. This does not preclude a reformulation of the Austrian School along 'institutionalist' lines (see in particular Peter Joseph Boettke, 1989).…”

Section: The Difficult Exegesis Of Wieser's Overall Approach To Economentioning

confidence: 72%

Wieser as a Theorist of Institutional Change

Festré

Garrouste²

2016

J Hist Econ Thought

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In this contribution, we provide an interpretation of Friedrich von Wieser’s contribution to economics that pays tribute to the originality of his work and particularly to his view of how institutions interfere with individual behavior. This interaction takes place within a disequilibrium framework where social influences such as power or social class, and psychological factors such as force of habit or herd behavior, are the product of human action but also constitute constraints on further action. Section II stresses the institutionalist background of Wieser’s economics. We concentrate on Wieser’s general method—which we assimilate to an example of Joseph Agassi’s (1975) institutional individualism—and his analysis of the emergence and evolution of institutions via the dynamics of leaders and masses. In section III, we reinforce and illustrate the institutionalist stamp of Wieser’s economics by focusing on his work on monetary economics (Wieser 1904, 1909a, 1909b, 1927b) and his analysis of the emergence of money, based on our reading of Wieser’s Social Economics ([1927a] 1967) and The Law of Power ([1926] 1983).

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Section: The Difficult Exegesis Of Wieser's Overall Approach To Economentioning

confidence: 72%

Wieser as a Theorist of Institutional Change

Festré

Garrouste²

2016

J Hist Econ Thought

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“…The distinction between 'promoters' or 'creators' and 'ordinary men' is important. First, it is a feature of the Austrian economic tradition inherited from Menger and Wieser (Arena and Gloria-Palermo 2001). Secondly, it allows us, according to von Mises, to explain the sharing, or rather the diffusion, of new individual beliefs via a social process of imitation.…”

Section: The Processes Of Division Of Individual Beliefsmentioning

confidence: 99%

“…However, this hesitation does not stand up to scrutiny. Schumpeter was strongly infl uenced by the fi rst generation of the School in particular, by von Wieser (Arena and Gloria-Palermo 2001). Moreover, he dedicated a great number of contributions to the study of rationality and individual beliefs (see above all Schumpeter [1940] 1991), a point that is often neglected in the literature.…”

Section: Joseph Schumpeter: the Social Foundations Of Individual Beliefsmentioning

confidence: 99%

Knowledge and Beliefs in Economics: The Case of the Austrian Tradition

Aréna¹,

Festré²

2006

Knowledge, Beliefs and Economics

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The Austrians contributed to the analysis of the impact of individual knowledge and beliefs on economic activity more than any other School in the history of economic thought. This statement should not surprise the reader. The founding fathers of this school are strongly associated with a subjectivist conception of economics, in which cognitive capacities and the level of information of individual agents play an essential role in the explanation of their decision-making processes. They also spent a signifi cant amount of time researching topics that are of the utmost importance to anyone interested in the role played by knowledge and beliefs in economics: Menger dedicated a lot of attention to the problem of the emergence of institutions and behavioural rules and placed great emphasis on the role played by the process of diffusion of beliefs within this context; Böhm-Bawerk dealt with the frontiers of pure economic theory and was interested in the impact of power and social relations on economic activity (Böhm-Bawerk 1914). As for Wieser, he built a real economic sociology approach and underlined the infl uence of organizational and social interactions in this context. In this chapter, we shall concentrate on the second generation of Austrian economists, in particular on the contributions of von Mises, Hayek and Schumpeter who, despite developing very different approaches, shared many features of the intellectual vein of the founding fathers of the School. At fi rst sight, the subjectivist stance of most Austrian authors suggests that they attached importance to the role of individual beliefs in economic activity. It also suggests that these economists were reluctant to deal with social norms or collective beliefs. We will, however, show that their approaches are more complex than might appear at fi rst sight. On the one hand, von Mises, Hayek and Schumpeter had divergent views of individual decision-making processes. On the other hand, and insofar

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“…On the one hand, following Wieser's conception of economic sociology, Schumpeter argues that, whatever the social environment, men are always divided into two categories: leaders and followers (see Arena and Gloria-Palermo 2001, Arena and Dangel-Hagnauer 2002, Arena and Romani 2002, Arena and Festré 2002, Arena 2004. It should, however, be noted that Schumpeter does not regard leaders as superior or 'great men' (Schumpeter [1927: 216).…”

Section: B Economic Rationality Circular Flow and Economic Developmmentioning

confidence: 99%