Viktor Vanberg

The Market as a Creative Process

Contributions in modern theoretical physics and chemistry on the behavior of nonlinear systems, exemplified by Ilya Prigogines work on the thermodynamics of open systems (Prigogine and Stengers, 1984), attract growing attention in economics (Anderson, Arrow, and Pines, 1988; Arthur, 1990; Baumol and Benhabib, 1989; Mirowski, 1990; Radzicki, 1990). Our purpose here is to relate the new orientation in the natural sciences to a particular nonorthodox strand of thought within economics. All that is needed for this purpose is some appreciation of the general thrust of the enterprise, which involves a shift of perspective from the determinism of conventional physics (which presumably inspired the neoclassical research program in economics) to the nonteleological open-endedness, creative, and nondetermined nature of evolutionary processes.

Spontaneous Market Order and Social Rules

Discoverers of “market failures†as well as advocates of the general efficiency of a “true, unhampered market†sometimes seem to disregard the fundamental fact that there is no such thing as a “market as such.†What we call a market is always a system of social interaction characterized by a specific institutional framework, that is, by a set of rules defining certain restrictions on the behavior of the market participants, whether these rules are informal, enforced by private sanctions, or formal, enforced by a particular agency, the “protective state,†in J. M. Buchanans (1975) terminology.

Rationality, Morality, and Exit

The morality and rationality issue is explored from an Axelrod-type perspective; that is, it is discussed in terms of recurrent-prisoners-dilemma-type games and behavioral strategies or programs for playing them. We argue that intuitive notions of rationality and morality can be shown to be mutually compatible if two assumptions are made: (1) that morality is specified as a general behavioral disposition or program whose rationality is to be determined in comparison to alternative behavioral programs and (2) that the recurrent game is specified as a prisoners dilemma game with an exit option. The results of a simulation experiment are presented, showing that a “moral program†(specified as one that never defects, but exits in response to an opponents defection) is successful in competition with a variety of alternative programs, including Tit for Tat.

Interests and Theories in Constitutional Choice

The paper contrasts two interpretations of the role of agreement in politics, a social contract notion and a dialogue notion. It is argued that the two notions can be viewed as complementing each other if one explicitly separates two components in human choice that in rational choice theory are often inseparably blended in the concept of preferences - an interest-component and a theory component. It is suggested that the contractarian agreement notion primarily focusses on the interest-component; the dialogue notion on the theory-component in constitutional choice.

Institutional Competition among Jurisdictions: An Evolutionary Approach

The purpose of this paper is to outline an evolutionary approach to the process of competition among institutions. We shall focus, in particular, on two issues: first, the role of the competitive process as a knowledge-creating process; and, second, the issue of what inferences, if any, can be drawn from the nature of this process regarding the desirability of its outcomes. In discussing both issues we will draw a parallel between ordinary market competition and competition in the realm of institutions. Some clarifying comments in order to narrow down what we mean by “evolutionary approach” and “institutional competition” precede the analysis.

The rationality postulate in economics: its ambiguity, its deficiency and its evolutionary alternative

Though the rationality postulate is generally considered the paradigmatic core of economics, there is little agreement about its specific content and methodological status. This paper seeks to clarify some of the ambiguity surrounding the postulate by drawing a distinction between the non‐refutable, purely heuristic rationality principle and refutable rationality hypotheses. An alternative, evolutionary outlook at purposeful human behavior is outlined that captures much of what makes the rationality postulate attractive to economists but avoids the ambiguities that have made it the subject of enduring controversy.

Organizations as constitutional systems

Four theoretical approaches to the study of organizations that can be identified in the relevant literature are compared: Thegoal paradigm, theexchange paradigm, thenexus of contracts paradigm, and theconstitutional paradigm. It is argued that the latter provides the more fruitful theoretical perspective in that it reconciles an individualist methodology with an account of organisations as corporate actors, as units of collective action.

Rational choice and moral order

Abstract The article discusses some of the fundamental conceptual and theoretical aspects of rational choice and moral order. A distinction is drawn between constitutional interests and compliance interests, and it is argued that a viable moral order requires that the two interests somehow be brought into congruence. It is shown that with regard to the prospects for a spontaneous emergence of such congruence, a distinction between two kinds of moral rules which we call trust-rules and solidarity-rules is of crucial importance.

The Constitution of Markets : Essays in Political Economy

1: Constitutionally constrained and safeguarded competition in markets and politics 2: Markets and regulation: The contrast between free-market liberalism and constitutional liberalism 3: The Freiburg school of law and economics: Predecessor of constitutional economics 4: Hayeks legacy and the future of liberal thought: Rational liberalism vs. evolutionary agnosticism 5: Hayeks theory of rules and the modern state 6: John R. Commons: Institutional evolution through purposeful selection 7: The market as a creative process (with James R. Buchanan) 8: A constitutional economics perspective on international trade

The Status Quo in Contractarian-Constitutionalist Perspective

That it favors the status quo is one of the most common and persistent objections raised against the contractarian-constitutionalist approach and, specifically, against its emphasis on voluntary agreement as the fundamental legitimizing principle for social reform. This paper seeks to clarify certain ambiguities that have surrounded the arguments of critics as well as contractarian responses to them. Its main emphasis will be on separating two issues the differences between which have not always been sufficiently recognized in the debate, namely, on the one hand, the role of the status quo as the inevitable starting point of any change and, on the other hand, the issue of the normative evaluation of the status quo.