Abstract
This paper re-evaluates the orthodox understanding of the role which the 1974 award of the Nobel Prize in Economics to F.A. Hayek had on the revival of Austrian Economics in the later part of the 20th century. The orthodox view, which focuses exclusively on the sociological role of the award on returning Austrian economists to the conversation among academic economists, omits the critical role of purely doctrinal developments. In particular, the work done in the decade 1937–1948 is argued to be central to the Austrian revival. In this decade, both Hayek and Mises independently developed new clarifications of Austrian thought which represented an extension of the subjectivist tradition in economics: Mises’ emphasis on human entrepreneurial action and Hayek’s exploration of the role of knowledge in the market process. The interest of a generation of younger academics to the ideas developed in that critical decade is thus understood to be the true cause of the Austrian revival, with the award of the Nobel Prize serving a catalytic rather than causative role.
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Notes
On this theme, see the important (but neglected) work of Frank M. Machovec, Perfect Competition and the Transformation of Economics, (London and New York: Rutledge, 1995). In this work Machovec explores in great detail how a drastic change gradually took place, during the first half of the twentieth century, in the mainstream understanding of how the market economy works.
See the above-cited work by Frank Machovec
See Buchanan (1979)
On this see the writer’s paper Ludwig von Mises and Friedrich von Hayek (1992)
See Mises (1962)
For a rare mainstream work recognizing this truth (and one which attempted, valiantly but with limited success, to address it with the tools of high-powered mathematics), see Fisher (1983)
For an early mainstream work recognizing that the very notion of a perfectly competitive market in equilibrium is incoherent, see Arrow (1959)
On this see at length Lavoie (1985)
See Kresge and Wenar (1994)
Hayek (1955); and see footnote 24 on pp. 209f
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Kirzner, I.M. Hayek, the Nobel, and the revival of Austrian economics. Rev Austrian Econ 28, 225–236 (2015). https://doi.org/10.1007/s11138-015-0307-y
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DOI: https://doi.org/10.1007/s11138-015-0307-y