Evolution and Design of Social Institutions in Austrian Theory

Abstract

It is demonstrated that the Austrian school in economics had very different ideas about the creation and change of social institutions and especially about the relation of state and market, which is still one of the fundamental problems of economic theory. Menger′s fundamental distinction of pragmatic and organic institutions and Wieser′s contrary model are discussed, followed by the “impossibility theorem” of Mises and the contrary position of Schumpeter. Hayek′s liberation model of society is presented and criticised, and finally Menger′s position is interpreted as one of moderate liberal interventionism.

Citation

Prisching, M. (1989), "Evolution and Design of Social Institutions in Austrian Theory", Journal of Economic Studies, Vol. 16 No. 2. https://doi.org/10.1108/01443588910143964