Peter J. Boettke

Entrepreneurship and Development: Cause or Consequence?

This paper discusses the inherent tension in the notion of entrepreneurship as developed by Ludwig von Mises and Israel Kirzner. Given that entrepreneurship is an omnipresent aspect of human action, it cannot also be the “cause” of economic development. Rather, for economic development to take place, certain institutions must be present in order for the entrepreneurial aspect of human action to flourish. After further developing this theoretical insight, an in-depth analysis of the institutions necessary for entrepreneurship is considered.

Where Did Economics Go Wrong? Modern Economics as a Flight from Reality

F.A. Hayeks realistic economic theory has been replaced by the formalistic use of equilibrium models that bear little resemblance to reality. These models are as serviceable to the right as to the left: they allow the economist either to condemn capitalism for failing to measure up to the model of perfect competition, or to praise capitalism as a utopia of perfect knowledge and rational expectations. Hayek, by contrast, used equilibrium to show that while capitalism is not perfect, it contains error-correcting institutions that bring it closer to perfection than i intuitively apparent.

Information and Knowledge: Austrian Economics in Search of its Uniqueness

The Austrian School of Economics since WWII has increasingly claimed a unique position within the scientific community of economists. This paper argues that the most persuasive way to make this claim to uniqueness is to focus on the distinction scholars in the Austrian tradition place between information and knowledge in their work. In other words, it is the epistemic-cognitive turn that the Austrian school took in the wake of the socialist calculation debate that separates the school from other branches of neo-classicism within economic science that constitutes its best case for analytical uniqueness.

The Political Economy of Soviet Socialism: The Formative Years, 1918-1928

1 Introduction.- 2 The Meaning of the First Decade of Soviet Socialism.- 3 The Political Economy of Utopia: Communism in Soviet Russia, 1918-1921.- 4 The Political Economy of NEP: Market Relations and Interventionism in Soviet Russia, 1921-1928.- 5 The Political Economy of Development Strategy: The Soviet Industrialization Debate, 1924-1928.- 6 Conclusion.- References.

Soviet Venality: A Rent-Seeking Model of the Communist State

While the recent Fall of Communism has focused the interest of economists on the admittedly fascinating problems associated with the ongoing economic reform process, the study of the functioning of actual communist economies still seems mired in the conventional model of central planning. This model is predicated on the assumption that communist rulers are unselfish drones who single-mindedly maximize the public interest. Our article proposes an alternative, public choice model. We suggest that the Soviet-style system represents a modern incarnation of the mercantilist economies of sixteenth- and seventeenth-century Europe, and that venality, not ideology, drives these economies in practice.

The collapse of development planning

Conventional wisdom has it that government management of the economy is the means to transform a backward economy into a dynamic, modern one. Yet, after decades of international aid programs, development planning is today largely perceived as a failure paralyzed by its own bureaucracy and inefficiency. Despite billions of dollars of investment, development successes are few and far between and waste and mismanagement abounds. This book showcases a diverse range of development experiences in order to ascertain the reasons for this quagmire. Case studies of development planning in China, India, post-WWII Japan, South Korea, Africa, and Eastern Europe, and of foreign aid programs (including the Marshall Plan) illustrate the insights an Austrian approach provides toward an understanding of the failure of government development planning. While economists working within the Austrian tradition have previously addressed development issues, this volume represents the first full-length treatment of the subject from a modern market process perspective. Exploding the hegemony of the traditional development paradigm, The Collapse of Development Planning addresses one of the most pressing issues of international political economy. Contributing to the volume are: George Ayittey (American University), Wayne T. Brough (Citizens for a Sound Economy, Washington, DC), Young Back Choi (St. Johns University), Steven Hanke (Johns Hopkins University), Steve Horwitz (St. Lawrence University), Shyam J. Kamath (California State University, Hayward), Shigeto Naka (Hiroshima City University), David Osterfeld (St. Josephs College), Manisha Perera (University of Northern Colorado), Jan S. Prybyla (Pennsylvania State University), Ralph Raico (State University College, Buffalo), Parth Shah (University of Michigan, Dearborn), Kurt Schuller (Johns Hopkins University), Kiyokazu Tanaka (Sophia University, Tokyo), and Mark Thorton (Auburn University).

Austrian Economics and Public Choice

In this introduction, we will first discuss the methodological affinities between the market process and public choice approaches to political economy, and then suggest that because of these affinities market process scholars should feel at home using public choice analysis to study politics, and public choice scholars should feel at home using market process analysis to study the economy. In a fundamental sense, public choice theory refers to the application of the economic way of thinking to study the political process. 1 The economic way of thinking deals with individual decision-making, and exchange relationships in a variety of social settings. Mises is arguably the first scholar to champion a unification of the social sciences by way of a common rational choice model. 2 And, Hayek should be recognized as one of the forerunners of the economics of politics with his The Road to Serfdom (1945) and constitutional political economy with his The Constitution of Liberty (1960). 3 Furthermore, Buchanan and Tullocks contribution to modern political economy touch on these themes: rational choice, catallactics or exchange, and constitutional construction. The papers in this special issue of The Review of Austrian Economics by Buchanan and Vanberg, Levy, Foldvary, and Naka point to the strong methodological and theoretical affinities between public choice and market process economists. The papers by Holcombe, Sutter, Benson, and Lopez move from the methodological and theoretical level to the realm of applied theory and empirical work.

Anarchism as a Progressive Research Program in Political Economy

The author discusses recent work in the anarchy literature and suggests avenues for progress in this area.

The Theory of Spontaneous Order and Cultural Evolution in the Social Theory of F.A. Hayek

The author discusses the Spontaneous Order and Cultural Evolution theories of F.A. Hayek.

Rational Choice and Human Agency in Economics and Sociology: Exploring the Weber-Austrian Connection

There has been a growing interest in the past decade or so in the intersection between economics and sociology. Much of the literature on this derives from a perceived disappointment by either economists or sociologists of the methods and approach to social questions of the other. Roughly, economic sociology is motivated mainly by the economist’s perception of the lack of rigor in sociology. Social questions, it is argued, are too important to be left to poor methodological treatment. Thus, economic imperialism and rational choice sociology result.