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Hayekian equilibrium and change

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  • Peter Lewin

Abstract

What do we mean when we say action is possible in disequilibrium? If we adopt Hayek's approach to equilibrium, we must mean that we can act in a world where the plans that motivate and define those actions are not mutually compatible. This is hardly controversial. After all, the market process features rivalrous actions, that is, actions that are part of mutually inconsistent plans. Successful plans tend to displace unsuccessful ones. But, can we say, therefore, that, overall, plans tend to become more consistent so that there is a 'tendency' toward equilibrium? Is this important? I answer both in the negative and that the Hayekian definition requires too much. Plans are complex, multi-layered con-structs. Overall 'plan consistency' is, therefore, either impossible or hopelessly imprecise. At some levels plans are and must be highly compatible, while at other levels (as part of the market process for example) they are and, if we are to have economic progress, they must be, incompatible.

Suggested Citation

  • Peter Lewin, 1997. "Hayekian equilibrium and change," Journal of Economic Methodology, Taylor & Francis Journals, vol. 4(2), pages 245-266.
  • Handle: RePEc:taf:jecmet:v:4:y:1997:i:2:p:245-266
    DOI: 10.1080/13501789700000017
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    Citations

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    Cited by:

    1. Nicolai J. Foss & Giampaolo Garzarelli, 2007. "Institutions as knowledge capital: Ludwig M. Lachmann's interpretative institutionalism," Cambridge Journal of Economics, Oxford University Press, vol. 31(5), pages 789-804, September.
    2. Robert L. Formaini, 1999. "Evolution of the Regulatory State : The Mixed Economy Viewed Through a Complexity Lens," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 15(Fall 1999), pages 67-97.
    3. Andreas Hoffmann & Björn Urbansky, 2015. "Policy Shifts and Financial Instability in Emerging Markets," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 455-469, August.
    4. Randall Holcombe, 2008. "Advancing economic analysis beyond the equilibrium framework," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(4), pages 225-249, December.
    5. Harper, David A., 2013. "Property rights, entrepreneurship and coordination," Journal of Economic Behavior & Organization, Elsevier, vol. 88(C), pages 62-77.
    6. G. R. Steele, 2005. "Psychology, social evolution and liberalism: a Hayekian trinity," Review of Political Economy, Taylor & Francis Journals, vol. 17(4), pages 571-586.
    7. Hoffmann, Andreas & Urbansky, Björn, 2012. "Order, displacements and recurring financial crises," Working Papers 108, University of Leipzig, Faculty of Economics and Management Science.
    8. Peter Lewin, 2016. "Plan-coordination: Who needs it?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(3), pages 299-313, September.
    9. Steven Horwitz & Peter Lewin, 2008. "Heterogeneous human capital, uncertainty, and the structure of plans: A market process approach to marriage and divorce," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(1), pages 1-21, March.
    10. Peter Lewin, 2014. "Hayek and Lachmann," Chapters,in: Elgar Companion to Hayekian Economics, chapter 8, pages 165-194 Edward Elgar Publishing.

    More about this item

    Keywords

    equilibrium; plan; coordination; change; Hayek; innovation;

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