An Introduction to Spontaneous Orders
Author: David Emanuel Andersson
Date: February 2021
There are two principal ways of approaching the analysis of markets. The dominant one that students encounter in popular textbooks is to think of a market as an equilibrium price-quantity combination that may represent a temporary snapshot of existing conditions or a timeless “end state.” But there is an alternative approach that views the market as a process of repeated interactions among buyers and sellers. The latter approach harks back to Adam Smith’s insights about “the invisible hand” and the division of labor. In the twentieth century, Austrian economists such as Friedrich Hayek and Israel Kirzner developed the classical approach further by viewing the interconnected web of markets as a “spontaneous order” that generates incentives for bottom-up discoveries of higher-valued uses of human and material resources. Markets become more complex over time as a result of entrepreneurial innovations and greater division of knowledge.
An Introduction to Value, Cost, and Price
Author: Matthew McCaffrey
Date: October 2020
There are few topics in economics that are as daunting or as poorly understood as price theory. The reason is not hard to guess: prices sound dull, and theorizing about prices sounds even duller. Of course, most people know that prices have something to do with “supply and demand,” but it’s not always obvious what these terms mean, or how they relate to our everyday lives. Yet it turns out that price theory is not only interesting and relevant, it’s absolutely vital for studying social life: whether it’s a daily purchase at the local shop or a choice between different national economic systems like free markets or socialism, prices are a central problem to consider, and they profoundly shape the social world.
Can governments intervene in the market in a rational way?
The problems of knowledge and economic calculation
Author: Emile Phaneuf
Date: September 2020
This paper aims to explore and discuss the reasons why government intervention in the economy is unlikely to produce the effects desired by policymakers. In particular, I wish to show how the contradictions of government economic planning and action are not simply to be found in the inefficiencies we often face when we deal with ‘public’ enterprises; more radically, and following the arguments developed in particular by Ludwig von Mises and Friedrich A. von Hayek, I will show how government economic planning is ontologically unsustainable.
In order to do so, this paper explores the subject matter of knowledge, the challenges that individuals face in making decisions as well as the institutions and incentive structures that affect the ability for both individuals and governments to achieve desired objectives.
What is a City?
Author: Sanford Ikeda
Date: July 2020
One of the common mistakes urban planners make is to assume that you can impose a deliberately constructed pattern onto a cityscape and expect people to adjust their behavior to it in just the way you want them to. It doesn’t work that way, especially with big plans involving large numbers of people, no matter how beautiful or efficient the design may be. To quote Jane Jacobs: “A city cannot be a work of art”.
So how do we avoid turning the results of urban design into taxidermy and killing off a city by planning? I think the short answer is that we avoid it by recognizing that there’s a tradeoff between the scale of a design and the degree of spontaneity, complexity, and intricacy in the resulting social order that the design allows.
The Entrepreneur: "One, No One and One Hundred Thousand"
Author: Carmelo Ferlito
Date: April 2020
Who – or what – is an entrepreneur? Behind which mask – or masks – does he hide his true face? Although we can easily understand how entrepreneurs represent the vital element in economic life, it is pretty difficult to find an adequate treatment of entrepreneurship in contemporary economics textbooks. In modern microeconomics, we find a sophisticated theory of the firm, in which an enterprise is often presented as profit maximizer or cost minimizer; similarly, different forms of market organization are discussed depending on the number of firms acting there. However, these discussions fail to appreciate the fact that at the very heart of the firms, we find the entrepreneurs, or – at the very least – entrepreneurship. It is almost as if the contemporary theory would introduce us to many entrepreneurial masks without attempting to discover the actual entrepreneur’s face.
Economics: Human Action and Its Meaning
Author: Carmelo Ferlito
Date: January 2020
What is Economics? According to Dr Carmelo Ferlito, the economists’ community is no more wondering about the scope and the meaning of the discipline. This paper suggests to reflect again on what economics is; in fact, an increased self-awareness can help in better developing expectations about what economists can do and what they cannot do.
To do so, the author, placing human action as purposeful behaviour at the core of economic analysis, has expanded the traditional scope of economics (economizing and equilibrium) to include not only decisions within a given means/ends framework, but the definition of such a framework itself. In doing so, the role of active minds in interacting with the surrounding reality in the realm of real time was emphasized. This framework brings as a consequence a non-deterministic approach, based on the recognition of the dispersed and everchanging nature of the knowledge possessed by individuals. The future, therefore, should be understood as radically open-ended.