Austrian economics and value judgements: a critical comparison with neoclassical economics
The article points out the limits of Austrian economics in so far as the passage from positive to normative economics is concerned. We propose a comparison with neoclassical economics and discuss the different theoretical solutions adopted by these two schools of thought in their legitimization of the normative discourse. The bridge from positive to normative economics is analyzed as resting upon two interdependent pillars, one of a technical nature, the other of an ethical one. In the case of neoclassical theory, these two pillars are, respectively, the “Pareto principle” and the so-called “minimal benevolence principle”. In the case of Austrian economics, they are the “coordination principle” and the set of “quasi-universal” value judgements. A first problem for Austrian economics is that the coordination principle turns out to be incompatible with process analysis, the latter being a central theoretical tenet of the Austrian school. A second problem, which overwhelms both the schools of thought, has to do with distribution. Our thesis is that whereas the neoclassical solution of the distributive problem is formally consistent (although deeply unrealistic), the Austrian solution is theoretically untenable and based on strong, although implicit, value judgements.
|Date of creation:||Mar 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Corso Unione Sovietica, 218bis - 10134 Torino - Italy|
Phone: +39 011 6706060
Fax: +39 011 6706062
Web page: http://www.esomas.unito.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vaughn,Karen I., 1994. "Austrian Economics in America," Cambridge Books, Cambridge University Press, number 9780521445528, June.
- Cowen, Tyler & Fink, Richard, 1985. "Inconsistent Equilibrium Constructs: The Evenly Rotating Economy of Mises and Rothbard," American Economic Review, American Economic Association, vol. 75(4), pages 866-69, September.
- T. de Scitovszky, 1941. "A Note on Welfare Propositions in Economics," Review of Economic Studies, Oxford University Press, vol. 9(1), pages 77-88.
When requesting a correction, please mention this item's handle: RePEc:icr:wpicer:08-2003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simone Pellegrino)
If references are entirely missing, you can add them using this form.