Front Page Titles (by Subject) EDITOR'S PREFACE - New Directions in Austrian Economics
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EDITOR’S PREFACE - Louis M. Spadaro, New Directions in Austrian Economics 
New Directions in Austrian Economics, ed. Louis M. Spadaro (Kansas City: Sheed Andrews and McMeel, 1978).
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Because the approach of the bicentennial of both the American Revolution and the publication of Adam Smith’s famous Wealth of Nations tended to overshadow another milestone—the passing of a hundred years since the occurrence of the “marginalist” revolution in economic theory—the observance of the latter has been left mostly to economists.
Even among this relatively small company, whatever celebration there was tended to be further subdivided owing to the fact that the economic revolution of the 1870s arose independently in three different places and took implicitly different forms. Two of them—the English and the French variants—soon merged either with pre-existing analysis or with subsequent formulations and so have lost some of their specificity and identity.
The third—the Austrian—branch not only represented, from the outset, a more daring departure from received doctrine, but remained, in the intervening century, more independent and distinctive in its essential insights, its analytical method, and its implications for economic and social policy.
Thus it was that early in September of 1976, a small group of Austrian economists (most of them returning from a sentimental journey to Smith’s birthplace) met for a few days in historic Windsor Castle to celebrate their own special anniversary. A number of papers prepared for the occasion were presented there and are here offered to a wider audience. The participants at the Symposium also engaged in a great deal of formal and informal discussion of the papers, which it was not possible to include in the present volume.
The arrangement of the articles here follows the order and purpose of their presentation at the symposium. The first and last are, respectively, a retrospective and a prospective for Austrian economic theory; the rest deal in their various ways with a number of significant points at the leading edge of Austrian analysis, where it interfaces or takes issue with contemporary economic thinking.
Thus, Professor Lachmann’s paper is a thoughtful assessment of the present state of Austrian theory and a lucid statement of its essential distinguishing features. This provides the basis for a provocative critical examination of some of the implications of that theory and for a number of imaginative suggestions for its future extension.
Professor Egger attempts to locate and explain some of the critical points on which Austrian theory differs significantly from currently received doctrines. His discussion of these “differentia” offers a valuable bridging service to a potentially wide audience who would otherwise find it difficult to perceive and evaluate important Austrian insights on substance and method.
The methodological divergence between currently prevailing economic analysis and Austrianism is explored in depth in the paper by Mario Rizzo. By juxtaposing econometric and praxeological approaches, Dr. Rizzo provides a useful framework for critical examination of the claims and validity of the positivism that implicitly pervades so much contemporary theorizing.
The contribution by Kirzner complements and extends the distinctively Austrian insight into the role of information in the economic process to which Hayek called attention in a well-known article some forty years ago. In the present article, Professor Kirzner analyzes the function of error in economic decision-making as well as its relationship to information and to the nature of entrepreneurship.
Professor Littlechild addresses himself to the problem of social cost—a concept that not only pervades much of modern welfare economics, but also constitutes a major point of contention between Austrians and conventional theorists. Littlechild examines the validity of the concept itself as well as some attempts to deal with social cost from a subjectivist perspective.
Still another focus of disagreement between Austrians and the prevailing orthodoxy is monopoly theory and the concept of competition on which it rests, whether explicitly or not. Professor Armentano’s paper is a critical examination of the conventional approach as well as of several variants of the Austrian view.
The essay by Professor O’Driscoll takes up a question that has divided economists for a very long time: whether there exists in a market economy an order not externally imposed upon it. In the course of his analysis, O’Driscoll argues that a number of problems in economic analysis that appear to be separate from this question as well as from one another are ultimately reducible to it.
Professor Rothbard examines the conventional definitions of the money supply and argues that the consistent application of an Austrian approach requires expansion of the meaning of the supply of money to include a number of important components currently excluded. Rothbard points out, moreover, that different components of the money-supply may have very different business cycle effects—a source of error that is systematically overlooked by the usual aggregative treatments of the subject.
Professor Moss calls into question the claim made by some Austrian economists that the subjective concept of time preference as developed by Mises implies that a positive rate of pure interest would necessarily appear even in a pure exchange economy (i.e., one with no production). Moss attempts a pure exchange model in which the emergence of such interest would necessarily depend on the presence of certain objective conditions.
Professor Garrison undertakes the considerable task of depicting macro-economic relationships diagrammatically and in a manner consistent with the Austrian insistence that valid explanations of economic relationships must ultimately refer to individual choices rather than rest on the facile assumption that aggregates interact directly. His graphics are applied to production, exchange, and other relationships in an attempt to establish a better and wider appreciation of Austrian analysis.
The last paper, by this writer, attempts to discern, in the light of the successes and failures of the past and present, some general guidelines for the future development of Austrian economics. It tentatively concludes that such development will most probably need to involve a much wider range of methods, disciplines, and professions.
Finally, it is the editor’s pleasant duty to express a few acknowledgements on behalf of all the participants. We are grateful to Professor Arthur Shenfield for agreeing to act as chairman for the conference meetings and for his patience and wit in the discharge of a sometimes difficult task. The presence of Professor Friedrich von Hayek at the meetings was inspiring to the scholars participating, and his contributions to the discussions added insight and wisdom. Sincere thanks are also due Admiral D. H. Mason and the staff of St. George’s House, Windsor Castle, for all their hospitality and help. Lastly, a very special word of thanks is extended to the University College at Buckingham and to the Institute for Humane Studies for sponsoring the Symposium—and to Koch Industries, Inc. without whose moral and material support neither the conference nor this book would have been possible.