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Carl Menger and Friedrich von Wieser on the Role of Knowledge and Beliefs in the Emergence and Evolution of Institutions

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  • Agnès Festré,

Abstract

In this article we start from the well-known contribution of the Austrian school with respect to the problem of knowledge and its role in inter- individual coordination. Focusing on two authors of this school - his founding father Carl Menger and Friedrich von Wieser, we show that the y both appreciate the role of knowledge in the emergence of economic and social institutions. However, their divergences regarding methodological individualism and subjectivism lead them to provide two different perspectives concerning the emergence and dynamics of institutions. This is exemplified by Menger and Wieser’s way of dealing with the emergence of money: on one hand, Menger takes for granted the involuntary formation of shared knowledge about the validity of social institutions such as money; on the other hand, Wieser favours an explanation whereby collective beliefs are more than shared knowledge since they do have some autonomy vis-à-vis individuals.

Suggested Citation

  • Agnès Festré,, 2007. "Carl Menger and Friedrich von Wieser on the Role of Knowledge and Beliefs in the Emergence and Evolution of Institutions," ICER Working Papers 39-2007, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:39-2007
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    References listed on IDEAS

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    1. Agnes Festre & Pierre Garrouste, 2008. "Rationality, behavior, institutional, and economic change in Schumpeter," Journal of Economic Methodology, Taylor & Francis Journals, vol. 15(4), pages 365-390.
    2. Pierre Garrouste, 1999. "Is the Hayekian evolutionnism coherent?," Post-Print halshs-00274293, HAL.
    3. Richard Arena & Sandye Gloria-Palermo, 2007. "Evolutionary Themes in the Austrian Tradition: Menger, von Wieser and Schumpeter on Institutions and Rationality," Chapters, in: Geoffrey M. Hodgson (ed.), The Evolution of Economic Institutions, chapter 11, Edward Elgar Publishing.
    4. Richard Arena & Agnès Festré, 2006. "Knowledge and Beliefs in Economics: The Case of the Austrian Tradition," Chapters, in: Richard Arena & Agnès Festré (ed.), Knowledge, Beliefs and Economics, chapter 3, Edward Elgar Publishing.
    5. Richard Arena & Agnès Festré & Nathalie Lazaric, 2012. "Handbook of Knowledge and Economics," Post-Print halshs-00721485, HAL.
    6. repec:ucp:bkecon:9780226320625 is not listed on IDEAS
    7. Dulbecco, Philippe & Garrouste, Pierre, 1999. "Towards an Austrian Theory of the Firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 12(1), pages 43-64.
    8. Richard Arena & Agnès Festré, 2006. "Knowledge, Beliefs and Economics," Post-Print halshs-00271316, HAL.
    9. Birner, J., 1995. "The surprising place of cognitive psychology in the work of F.A. Hayek," Research Memorandum 019, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    10. Richard Arena & Agnès Festré (ed.), 2006. "Knowledge, Beliefs and Economics," Books, Edward Elgar Publishing, number 3100, June.
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