Towards a Neo-Austrian Theory of Exchange

Abstract

For several years now general equilibrium theory has come under severe attack². One of the reasons for this development has been the attempt to introduce money into the general equilibrium model³. What seemed to be a more or less technical exercise turned out to be of crucial importance for the understanding of the Walrasian concept of an economy. Thus it was a necessary step in the evolution of the theoretical discussion that not only the model as a special representation of an economy was questioned but also the notion of equilibrium itself⁴. As a consequence the search for a disequilibrium theory has become a recurring theme in the economic literature. Without reviewing the relevant contributions in detail here one can conclude that the problems of disequilibrium theory and alternatives to the Walrasian exchange model have not been solved until now [28] [20]. Therefore it seems important to concentrate on the conceptual and methodological difficulties instead of refining a model whose deficiencies have been disclosed by recent research.

I have the impression that some communication theorists regard the human link in communication systems in much the same way they regard random noise. Both are unfortunate disturbances in an otherwise well-behaved system and both should be reduced until they do as little harm as possible. Although these theorists, impressed by the inexorable laws of thermodynamics, have been forced to admit that noise is inevitable and inescapable, they still seem to believe that, if you are willing to take the trouble, the human element can be eliminated completely. This assumption, that man is not here to stay, is overly optimistic. G. A. Miller The Psychology of Communication. Seven Essays. Harmondsworth 1970, p. 51.