Economic Thought by Heinz D. Kurz

Author:Heinz D. Kurz
Language: eng
Format: epub
Tags: BUS023000, Business & Economics/Economic History, BUS069030, Business & Economics/Economics/Theory
Publisher: Columbia University Press
Published: 2016-05-17T00:00:00+00:00

THE MARKET PROCESS AS A DISCOVERY PROCEDURE Mises’s position was supported by his fellow Austrian Friedrich August von Hayek in several writings, including The Road to Serfdom (1944) and essays about the role of knowledge in society. Hayek highlighted two crucial aspects of the market process: first, the incentives for microeconomic action that come from the market, and second, the information that markets generate. Prices, as the outcome of spontaneous actions by individuals, are carriers of information. Fragmented and dispersed knowledge that is only privately available is bundled into prices and thus made generally available. No central planning office and no bureaucratic process, Hayek insisted, can collect, process, and pass on information nearly as effectively as the market can. The market therefore entails a “discovery procedure.” Hayek also echoed Mises in contending that economic and political freedom are intimately linked.

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