The Market Process

Essays in Contemporary Austrian Economics

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Published by the Mercatus Center at George Mason University in the Advanced Studies in Political Economy series.

The Market Process presents a series of important and innovative articles written by economists of the Austrian school. Covering the gamut of economic issues, including equilibrium theory, free banking, public choice, and the problems of contemporary social reform, the book is an ideal introduction to the diversity of contemporary Austrian economics and its innovative trajectory of research in the late 20th century.

Drawing upon essays published in the journal Market Process during the 1980s, this book reflects an extended dialogue over the value and limitations of Austrian economics. It makes available to a wider audience contributions by some of the leading figures in the field. At the cutting edge of interdisciplinary research, it incorporates the latest developments in areas overlooked by neoclassical economists, including process analysis, methodological subjectivism, and phenomenological hermeneutics.

This book should be of interest to all those who seek an alternative to formal, neoclassical economics, as well as other researchers in the social sciences who study exchange processes. In addition, it will be of general interest to Austrian and public choice economists as well as historians of economic thought.

“The scholarly publication [the journal] Market Process played the central role in the transformation of the market process school from a hesitant subset of traditional Austrian economics into a bold new research program. . . . The articles included here are among the best of contributions the Austrian school has ever made and deserve to be given a wider readership.”
Don Lavoie



Introduction: The present status of Austrian economics: some (perhaps biased) institutional history behind the market process theory
Peter J. Boettke & David L. Prychitko

Part One: Equilibrium, Evolution and Market Process

Chapter 1: The market process: an Austrian view
Jack High

Chapter 2: The market process: an evolutionary view
Richard N. Langlois

Chapter 3: On The economics of time and ignorance
Israel M. Kirzner

Chapter 4: On The economics of time and ignorance
Ludwig M. Lachmann

Chapter 5: Schumpeter and Kirzner on competition and equilibrium
Don Boudreaux

Chapter 6: Beyond equilibrium economics: reflections on the uniqueness of the Austrian tradition
Peter J. Boettke, Steven Horwitz, & David L. Prychitko


Part Two: Cost and Choice

Chapter 7: Expectations and expectations formation in Mises's theory of the market process
Richard M. Ebeling

Chapter 8: Mind, historical time and the value of money: a tale of two methods
Matthew B. Kibbe

Chapter 9: A note on the cost controversy
Jack High

Chapter 10: The cost controversy: a reply to Professor High
Leland B. Yeager

Chapter 11: Economics, subjectivism, and public choice
Jack Wiseman

Chapter 12: Shackle and a lecture in Pittsburgh
James M. Buchanan

Chapter 13: Insight and the creative potential of the mind
G.L.S. Shackle


Part Three: Money and Banking

Chapter 14: The yield on money held revisited: lessons for today
George A. Selgin

Chapter 15: Prices, the price level, and macroeconomic coordination: Hutt on Keynesian economics
Steven Horwitz

Chapter 16: Misreading the "Myth": Rothbard on the theory and history of free banking
Steven Horwitz


Part Four: Current Methodological Questions

Chapter 17: Storytelling and the human sciences
Peter J. Boettke

Chapter 18: Splenatic rationalism: Hoppe's review of chapter 1 of The Rhetoric of Economics
Deirdre N. McCloskey

Chapter 19: Hermeneutical integrity: a guide for the perplexed
G.B. Madison


Part Five: Modern Political Economy and the Austrian School

Chapter 20: Recent developments in social choice theory
Tyler Cowen

Chapter 21: J.M. Buchanan and F.A. Hayek: the thought of two Nobel laureates
Viktor Vanberg

Chapter 22: Can democratic society reform itself? The limits of constructive change
Karen I. Vaughn

Chapter 23: Virginia political economy: a view from Vienna
Peter J. Boettke

Chapter 24: Socialism as Cartesian legacy: the radical element within F.A. Hayek's The Fatal Conceit
David L. Prychitko

Chapter 25: A political philosophy for the market process
Don Lavoie

Conclusion: The future of Austrian economics
Peter J. Boettke & David L. Prychitko