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Monitoring, metering and Menger: A conciliatory basis for a genuine institutional economics

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  • Peter J. Boettke

    (George Mason University)

  • Rosolino A. Candela

    (Mercatus Center at George Mason University)

Abstract

Carl Menger’s objective in his seminal book, Principles of Economics, was to elucidate a unified account of price formation. This raises a question, which motivates our paper: to what extent, if any, can Menger account for production not directly organized by the price mechanism, and therefore a theory of economic organization and its formation through time? We argue that implicit to Menger’s account of price formation is an account not only of institutional formation, but particularly economic organization. Thus, there exists a symbiotic relationship that can be found in Menger between a theory of price formation and a theory of organizational formation, both of which are by-products of an increasing division of knowledge brought about by an increasing scope of market exchange. Moreover, our point illustrates that Menger’s work is an analytical point of departure for a shared understanding of parallel developments in Austrian economics and organizational economics that have followed.

Suggested Citation

  • Peter J. Boettke & Rosolino A. Candela, 2023. "Monitoring, metering and Menger: A conciliatory basis for a genuine institutional economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 36(2), pages 183-203, June.
    • Handle: RePEc:kap:revaec:v:36:y:2023:i:2:d:10.1007_s11138-022-00593-w
    DOI: 10.1007/s11138-022-00593-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Carl Menger; Economic organization;

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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