a few remarks

Michael Perelman michael at SPAMecst.csuchico.edu
Sat Sep 4 17:51:29 MDT 1999

Chris twists my words a bit, perhaps reading something into them that I did not
intend.  I realize that the Austrians differ, and strongly so from the
neo-classical model.  I still hold that they postulate an ideally functioning
economy in which dissagregated information comes as close to perfection as

Chris Matthew Sciabarra wrote:

> Michael states:  The Austrian idea is to postulate a perfectly
> functioning market and then to insist that a top down centrally planned
> economy cannot match that level of efficiency.
> Chris:  Just a clarification:  the Austrians do NOT postulate perfect
> competition, perfect knowledge, or perfect, equilibrated markets.  Their
> vision of a free market is simply one in which there is free entry.  They
> postulate disequilibrium, dynamics, competitive rivalry, and imperfect
> knowledge.  On these points, they differ radically from the neoclassicists.

You cannot prove the superiority of planning or markets by indicating that one
fails in some technical way.  All of the arguments that Austrians use against Marx
can be turned right back on them.

In any case, I suspect that all concerned would agree that the heart of the matter
is not technical efficiency but the type of people (and life) created in the market
or marxist environment.

I will point out one problem with the Austrian model in that its vision of
entrepreneurial knowledge is predicated on individual entrepreneurs rather than
giant corporations.  In that sense, it is fittingly known as Austrian since it
seems more appropriate to a quaint 19th C. Viennese milieu.
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu

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