Seminar 8: The Austrian School

Closely related to ordoliberalism is the Austrain school. In this seminar I have extracted two papers from well known representatives (Hayek and Kirzner). we can use this to work out the contours of this approach. The paper by Wohlgemuth tries to explore the differences between ordoliberals and Austrians. I have also added Budzinski’s paper which serves as a nice re-cap of various approaches and a suggestion of how to utilise them.

Hayek ‘Competition as a Discovery Procedure‘ (2002) 5(3) Quarterly Journal of Austrian Economics 9

Kirzner ‘Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach’ (1997) 53(1) Journal of Economic Liteerature 60

Wohlgemuth ‘The Freiburg school and the Hayekian challenge’ (2013) 26 Review of Austrian Economics 149

Budzinski ‘Monoculture and Diversity in Competition Economics’ (2008)  32(2) Cambridge Journal of Economics 295

Further Reading

Armentano Antitrust: The Case for Repeal (1986)

12 comments on “Seminar 8: The Austrian School

  1. Alexandre Ruiz says:

    Wohlgemuth’s paper provides a nice account of the dialogue between the Freiburg and Austrian School; and Kirzner makes an interesting contribution to Hayek’s work. From these articles, one can draw some features of the Austrian School such as the following: (i) macro and micro-theories fail in predicting the outcome of the functioning of the market; (ii) pure theory of stationary equilibrium (supply/demand equilibrium) presupposes that the relevant facts of the market have been already discovered, which is not true; (iii) competition then is better conceived as a discovery procedure; (iv) competition therefore is a dynamic procedure, so the static concept of ‘perfect competition’ should be abandoned; (v) much more scepticism on the conscious institutional design; (vi) the market is an spontaneous order of actions (catallaxy); (vii) to consider monopoly acts ‘as if’ competition exists is absurd; (viii) market failures can also be caused by the State when it attempts ‘to steer a purpose-free, self-organizing, and complex order of actions’; and (ix) the paradigm is ‘freedom to compete’.

    This said, I see some difficulties in building a normative framework from the postulates of the Austrian School, particularly on the theory of harm, antitrust enforcement and the outcome of competition.

    With regard to the theory of harm, it is difficult to identify it in the entrepreneurial discovery approach. The question I pose here is when and how could we find the market failure. According to this approach, competition is conceived not as an end, but as a process; and in order to protect the process, competition should protect freedom of competition. Another option is that, maybe, competition should protect the process as itself, because the process is good per se. Thus, the market failures that should be corrected by competition are those that impede the agents to achieve knowledge, because are those that hinder the process by which they acquire the necessary knowledge. But again it is difficult to see how can we find the theory of harm.
    Certainly, Kyzner (p. 74) says that competition should guarantee free entrepreneurial entry into any market. Thus, one may say that from their perspective, entry barriers are the competition concern, and so may be also monopoly. However, I think that this is not enough. For instance, they think that entrepreneurial errors create incentives, and is this dynamism the driving-force of the market. But what is their antitrust response against those attitudes that lead to collusion? In this case, collusion neither creates incentives to the existing entrepreneurs nor for newcomers.

    The second point is about antitrust enforcement. How much enforcement do we need? How strong the State should be? At some point, it seems that the Austrian School wants also a vigorous intervention. What hinders the process of discovery is barriers of entry and monopoly. However, it is also said that ‘[u]nderstanding how government regulation of entrepreneurial activity is likely to frustrate the coordinative tendency toward error-correction, is often believe sufficient to permit the Austrian economist roundly to condemn such intervention’ (p. 82 of Kyzner’s paper). Thus, at the same time, State should be at margin. I think this arises some problems when antitrust intervention is needed ex ante, such as in merger cases, or also for instance in state monopolies. It is not clear what is the proposal of the Austrian approach to these cases.

    The third point is on the expected outcome of competition. For Kyzner, competition is not an end, but a means to an end. As he says, ‘it is therefore certainly a misleading reading of the Austrian theory to construe it as claiming that the entrepreneurial discovery process ensures an unerring trajectory toward the attainment of that complete mutual awareness which is necessary for any notion of social optimization’. Thus, ‘Austrian economics makes no claim that the market outcomes at any date are efficient and socially optimal’ (p. 81). Therefore, this means that the entrepreneurial discovery process is protected because is good per se. However, it does not guarantee an optimal outcome, whatever it is. My feeling here is that the Austrian construction of the process of competition as a discovery is too abstract, and that it leads to an unmanageable circle that cannot be translated into a normative framework.

    Last, concerning Budzinski’s paper, I like the brief exposition of the several schools of thought on antitrust. However, I find his proposal at the end of the paper a bit weak. His point is that as there is no competition economics monoculture, then a pluralistic, extended economic approach should be taken. In order to combine the diversity on competition economics, he suggests that (i) economics can show welfare gains or losses, but society is able to choose different goals following a different reasoning because it pursues different values than welfare standards (but why, when and how can society choose different values?); (ii), competition theory, as science, is permeable to new theories (but what if these theories overrule each other? Who decides which prevail?); and (iii) antitrust decisions should be made in favour of securing future competition, thus long run effects matter (but Chicago School focuses on short-term interests, so this postulate will narrow the extended economic approach somehow, won’t it?)

    • giorgiomonti says:

      Agree with both your main points: (i) how to operationalise the Austrain approach: as you suggest it seems to argue for non intervention, but without necessarily any standards. (ii) there is clearly a problem with the last point in Budsinski’s list because then it requres one to embrace a particular vision of how markets work.

  2. Magdalen Reeder says:

    The Budzinski article really makes clear how many competition theories there are: Chicago School, Harvard School, Hayek/Austrians, Ordoliberal/German, Schumpeter, etc. And from 10,000 feet—they really aren’t all that different, just different ideas about the best way to encourage competition or maximize welfare. My initial reaction was a lot like those he cites on pp. 19-20 who think that perhaps the number of prominent theories means no one has yet come across a truly winning idea. From a purely competitive viewpoint, to the extent that each has been adopted at some time or place or another, can’t we control for other factors and measure which has done the best job at promoting competition? These aren’t Hayek’s artificial experiments, they are actual ideas that influence policy. In fact, it seems like that is what the International Competition Network has been doing, but Budzinski argues that there is no incentive for anyone to form a consensus. I don’t think he totally correct that because neither lawyers nor economists have an incentive to form consensus, no one does. Consensus is valuable to politicians, and the Elizabeth Warren speech showed us on that it is on at least her political radar (never mind that she was a lawyer with an economic focus first).
    The extent to which I agree with him about whether or not consensus could be reached depends on the extent to which antitrust economics is a science versus a form of regulatory politics. If it is a science, consensus might be reached, and in fact, consensus has been reached on some aspects. Just because a science can’t be proven true doesn’t mean that there isn’t broad mainstream agreement that certain scientific explanations are the best we have currently available. But, clearly consensus is hard to reach in politics as well and economics may be too closely related to politics rather than science for a clear answer to emerge. Further, as Hayek says, competition is dynamic just because an economic theory works well once or in one situation doesn’t mean that it will work well in other circumstances.
    I also don’t think consensus is really necessary or desirable (though I also don’t agree with Budzinski that it would quash dissent and other ideas—look at climate change). It’s just frustrating to think that one system might be “better”—depending on the goals, which vary—than the others but used less.

    • giorgiomonti says:

      Interesting – clearly in certain settings (eg competition agencies or courts) expertise will be explored and the ‘better view’ will emerge through the procedures set out (eg Daubert rules on admissibility of evidence by experts). as you note it is more difficult to get an agreement on the right direction of competition policy at a higher level, although as you note with reference to Warren, at a political level one can present the choice of which vision of the market one should prefer.
      One difficulty with the natural experiments you hint at at the beginning of your comment is that it may be hard to determine what competition law intervention has actually done to a market, so finding out whicih worked better may be difficult.

  3. Katrine Lillerud says:

    Imperfect but useful scientific method – Competition as a discovery procedure (Hayek)
    Hayek sees that competition cannot be empirically verified in those cases in which it is of interest. (p.10) Micro-economic theory that is the analysis of the fine details of the economy’s structure which alone can teach us to understand the role of competition. However, it has lost so much of its reputation, because one cannot on excessively simplified criterion, what they are prepared to recognize as scientific, describe the reality of the market. Although not complete such scientific methods do, however, yield better results as their alternatives. Hayek does not reject the idea that indeed economics is useful in competition law. In his view the aim of competition regulations seems to be to maximize the use of scares goods, by first identifying what such goods are – this appears to be in his view when ‘competition equilibrium’ is reached – and that this can only be achieved by a flexible system where the participant can reap benefits proportionate and incentivized by his/her own input to society.

    What is in reality the Austrian approach … finding a model for perfect equilibrium ? (Kirzner)
    Kirzner presents the Austrian competition economics view, as skeptic towards regulations whích is not based on sound knowledge of the outcome- so it is often conceived wrongly as a ‘laisee faire’ approach. (p. 24) A badly planned regulation is likely to frustrate entrepreneurial activity rather than to encourage it, which seems curtail to maintain competition. Thus, Kirzner says a common misconception of the Austrian model is that it is often believed sufficient to permit the Austrian economist to condemn such government regulatory intervention. This conviction is rooted (a) in criticisms of the lack of relevance in models which seek to explain market phenomena as if they were, at each and every instant, strictly equilibrium phenomena, and (b) in the belief that it is a methodologically legitimate demand to be made of a theory of the market, that it not merely begin with the instrumentalist assumption of already-attained equilibrium, but also realistically offer a plausible explanation of how, from any given initial set of non equilibrium conditions, equilibrating tendencies might be expected to be set into motion in the first place.

    The Freiburg school – the constant lack or abuse of knowledge problem (Wohlgemuth)
    Wohlgemuth summarizes that Hayek’s economics and classical-liberal social philosophy revolve around the problem of lack of knowledge by private parties. The Freiburg School’s economics and its ordo-liberal social philosophy, on the other hand, has a different focal point, as it center is that of the concentrated power of private parties. (p. 1) It appears that economists believed that it would be possible to calculate the prices at which general (competitive) equilibrium would be reached and that it was only a question of time to await the invention of powerful computers. (p. 5) This off course never happened.

    Wohlgemuth’s main argument seems mounted in the idea that decision-making bodies should not avoid engaging in a deliberate choice of collectively binding rules, since a rationally selected rules offers a chance to in a controlled manner realise collective gains from joint commitment, making everyone better off compared to a given status quo according to the socialist thinking of welfare. (p. 18)

    There is no such thing as one correct economic approach – Monoculture and Diversity in Competition Economics (Budinski)
    Budinski is a strong opponent against the believe that competition law will ever be able to rely on single common economic model, the monoculture, since different competition theories define different dividing-lines between ‘economic’ and ‘non- economic. In fact his perception is that this should not even be a goal to be achieved. Since when facts are mixed with normative assessments on cannot claim to provide non-ambiguous, ultimate, non-challengeable (quantitative) criteria for the delimitation of competitive and anticompetitive practices and arrangements on a case-by-case basis (p.23). In such a scenario the economics is cannot be an ‘objective and unerring discipline’.

    However, that is not to say that economics is not an essential part of competition law assessment, as ‘antitrust law is designed to protect and facilitate the competitive process itself, and the only way to do that effectively is to understand what one is trying to protect or facilitate. (p.1)

    The knowledge needed to foresee competition will always be too incomplete to compute and predict fully. Although economics hopefully can give a better prediction of market behavior it will never be a model that perfectly describes the reality of a market. For that the interplay between actors and factors are to many and complex to compute as it is an ever evolving, non-static world.

  4. Agnieszka Jabłonowska says:

    There is no doubt that both Hayek’s and Kirzner’s analyses display great conceptual and argumentative sophistication. I am, however, still struggling to identify their positive proposals. What I am also lacking is a more reasoned discussion about concrete implications of embracing the market understanding presented – not without valid reasons – by both authors. Hayek’s understanding of competition as a process for discovering facts certainly deserves credit for bringing its dynamic nature back to the fore (one could say – to its Smithian roots). The notion of the spontaneous market order (catallaxy), the argument that one can never predict the results of the discovery procedure because of the knowledge deficit (sounds somewhat familiar to the discussion about behavioural economics, yet – as we have seen – behavioural economics could also well be used as an argument in favour of more interventionism) and the observation that macroeconomics can only predict certain patters are also no less accurate. So is the criticism of the perfect competition model and its equilibrium. However, even if there are surely differences in the modes of reasoning applied by the Austrian School, as represented by Hayek and Kirzner, and the advocates of the laissez-faire approach, one can wonder whether there are in fact any differences in their anticipated outcomes. Perhaps the Austrian School was not preoccupied, at least not predominantly, with the assessment of particular market practices and respective antitrust policies, but was rather a more general proposition about the relations between state, market and society (essentially an argumentation supporting the limitation of any sort of government intervention – be it in the field of antitrust, social policy, etc., which of course has to be seen in the historical context). In any case, propositions addressed directly at the antitrust policy are scarce and not very conclusive (e.g. when Kirzner notes that it is important to guarantee free entry and based on this argues against merger control). Wohlgemuth, in turn, compares the Austrian School (for which the author seems to have a particular respect) with the ordoliberal thinking. However, one can also argue, as Behrens did in the readings from last week, that the understanding of the ordoliberal thought adopted for purposes of this comparison is very narrow and mainly refers to its early phase (e.g. to the assumption that the antitrust policy should urge monopolist to act “as if” competition existed). On the other hand, Brudzinski’s paper shows that the Austrian School was also subject to an evolution of its own so, similarly, it would be unfair to associate it only with Hayek and Kirzner. Against this complext background, Brudzinski’s account of different competition theories developed over time is particularly helpful as it allows not only to organise different strands of knowledge acquired to date, but also to see the value of Hayek’s thought for the future development of some more nuanced market process competition theories.

    • giorgiomonti says:

      Excellent reaction – indeed it is hard to discern where the Austrians precisely want to go with antitrust policy and you did well to note how the Wohlgemuth paper seems to base its reading on the 1st generation of ordoliberalism and thus gives us little to grasp the contemporary difference between Austrians and Germans. Likewise I found it peculiar in this paper that he seems to take the view that the Germans post 1945 became neo-classicists.

  5. Maria de la Cuesta says:

    This session’s readings are especially interesting to understand the differences between the Austrian and the ordoliberal schools. In this sense, I think Wohlgemuth’s paper makes a nice overview of the differences and similarities between both schools, as well as hinting at a plausible explanation for them.
    As he says, and when it comes to competition, both schools start from the emphasis on individual freedom, and perhaps, this is linked to what Tuori referred to as the triumph of the microeconomic constitution. However, this emphasis on freedom led the Austrian and the ordoliberals down different paths. Individual freedom, for the former, translated into freedom to compete, and this, in turn, into a vision of competition as a goal-free procedure of discovery. For ordoliberals, competition does have a goal: the protection of economic freedom and therefore of the structure that ensures it.
    But how important this difference is? In fact, I think it is not only a question of terminology or nuance, but also a question of practical relevance, and as Wohlgemuth points out, I agree with him that the differences were very much dependant on the enemy each school was fighting. Because ordoliberalism was a reaction to the excesses of private power, they want to avoid at all costs the kind of market structure that makes that power possible, while for the Austrian it would make no sense to protect a kind of structure or equilibrium that is not but a transitory state in the discovery process of entrepreneurs. It is the public power that the Austrian fear the most, and its intervening in a process the particular results of which can only be discovered through that very same process. And institutionally, the theoretical difference between the two schools is also important. In particular, I think this difference would attribute a different role for self-regulation or private regulation in the industry. While the Austrian could regard it as spontaneous order, the Freiburg scholars would be more sceptical of attributing such powers to private actors.
    Finally, one of the aspects that have caught my attention from the readings refers to a particular consequence of the nuanced difference between ‘freedom to compete’ and the economic freedom of market actors. More concretely, at one point we read how the Austrian school would refer to the need to declare void any contractual restraint of trade (such as an exclusive supply clause, I imagine), as a limit (privately established) to the freedom to compete of an ‘entrepreneur’. I have been trying to make sense of this, and imagine the difference from a more ordoliberal approach. I am not very sure of this, but for me, ordoliberalism would not put so much attention on the contractual restraint happening in a vertical relation between supplier and distributor, but on the horizontal dimension, this is, the foreclosure of other distributors. Instead, such an Austrian approach is looking at the vertical relationship between supplier and distributor, and for me, to a contractual imbalance, so that it would make sense for them to ask for generalizable (and procedural) rules of just conduct to ensure the freedom to compete of all contractual parties.

  6. Elena says:

    The backbone of the Austrian school is the conception of competition as a dynamic phenomenon. This drastically contrasts with the neoclassical view of competition, which is based upon a static concept of competitive equilibrium. For the neoclassical view, equilibrium is seen as a point of departure. This is such because neoclassical schools presume that relevant statistical variables are quantifiable, and thus it is possible to calculate a perfect equilibrium point that will guide the (backward) economic analysis. But at the same time, equilibrium is assumed to be the targeted goal, the perfect competition paradigm guiding the economic policy or the lex ferenda competition policy. Hayek maintains that the notion of equilibrium is in contradiction to competition itself. This is so because competition is for Hayek a process of discovery, and the notion of equilibrium presupposes that facts have been already discovered and they are static (Hayek,p. 15). Moreover, the catallaxy (the natural market order) is destroyed if our target goal is equilibrium, as the idiosyncrasy of catallaxy determines that it is impossible to be grasped (and regulated) beforehand. Catallaxy can only be comprehend through actual interaction with other market competitors, fact that renders the market order impossible to anticipate.

    The normative conclusion drawn from these premises is noteworthy: the only way of allowing the catallaxy to occur and develop seems to be the not intervention in the economy (e.g ‘if the market is used for redistributive objectives, it is then put at the service of social justice, the catallaxy is destroyed’, page 17). Any attempt to regulate has the necessary consequence of destroying the dynamic features of catallaxy, because the only way of regulating is taking a static picture of the market, and thus immobilizing it. Kirzner seems also to advocate for such a passive approach when affirming that ‘to limit the size of firms (…) is, in the entrepreneurial discovery approach, to block entrepreneurial entry, and is thus anticompetitive’. For the above mentioned reasons, the proposal is to limit the intervention of the watchdog in order to allow the development of the economic, the discovery process and the entrepreneurial role. At the end of the day, this conclusion is in line with the policy recommendations of neoclassical economics, which is quite surprising as it is the very refusal of neoclassical axioms what gives rise to Austrian’s theories.

    I have the impression that, Kirzner and Hayek conclusions, and their advocation for a dynamic competition through the rule ‘less intervention is best competition’, is in contradiction with the factual conditions of the market economy. They take for granted the absence of barriers to entry to the market, as far as the concept of dynamic competition (and the entrepreneurial role and the role of discovery) is only workable where there is free access to market and no entry barriers. Otherwise the barriers to entry will have the direct result of slowing down the dynamics of competition.

  7. galyna says:

    Hayek introduced an idea about competition as a discovery procedure. While in principle I agree with a statement that no one can know everything about the competition process, I do not see an answer to the question: “So, how it should be regulated or not regulated?” His theory suggests that no one can design good rules simply because no one knows which rules are good.
    I have an impression that his approach aims at criticizing other schools, but fails to provide valid answers.
    As he supported his arguments by referencing to Adam Smith’s idea of an “invisible hand”, would it suggest that it is better not to regulate competition, and thus, not to intervene? If yes, would it be the best way to achieve the market process which, by the definition given by Kirzner, is possible when entrepreneurs have a freedom to enter markets in which they see opportunities for profit? And what would the Austrian school propose if there are high barriers to enter the given market? To put it into practical perspective, how to evaluate when the market is foreclosed? And what would be a standard for its assessment? How they would assess whether a merger would create more concentration in the market, if it requires ex ante control meaning that “a discovery procedure” cannot be followed?
    Furthermore, I was puzzled by Kirzner’s arguments about a “laissez faire” approach. He argues that because the “laissez-faire” approach is based on the “claim that spontaneously achieved outcomes are efficient” and states that Austrian economics cannot conclude that “market outcomes are efficient”. Taking that into account, he concludes Austrian economics does not give grounds for that approach. Moreover, he argued that “there is no tendency for entrepreneurial errors to be made” and that Austrian economist can condemn governmental intervention. Here I do not see enough supportive arguments to prove why their approach is not a “laissez faire” and moreover, these arguments seems to me slightly contradictory.
    After having read their papers I could not see clearly: what Austrian school offers us? What would be a state of competition on the market that would be satisfactory?

  8. stavros says:

    In this influential paper Hayek presents his conception of competition as a discovery procedure; a procedure for discovering facts, which if the procedure did not exist, would remain unknown or at least would not be used. This account, Hayek argues, provides the most coherent justification of competition. If that were not the case, competition would be nothing but a highly wasteful method of achieving our goals. This is the reason why it is absurd to give the label “perfect competition” to a state in which all players know all the facts, for in such a situation the opportunity of competition no longer exists. This argument has some merit since we safeguard a process only because of its indeterminacy. Yet, Hayek overemphasizes the lack of knowledge component. This tendency is also related to his denial of any top-down method to judge the performance of the market. However, by arguing in favor of competition on those terms Hayek actually insulates it from any empirical scrutiny. Competition cannot be proven inappropriate due to some negative consequences. It should always be safeguarded as the essential element of a spontaneous order. In this sense Hayek’s dogma become impossible to falsify in Popperian terms or to put it differently it undertakes religious aspirations.

    In the Hayekean universe the market is conceptualized as a spontaneous order and could not by definition be justified on the grounds of certain objectives, values or outcomes. Nonetheless, taking into account that the only empirical proof Hayek offers in favor of the markets “is that societies who make use of it are more advanced than those who don’t” there is a need for certain normative standards according to which the market could be legitimized (legitimacy problem).

    Secondly, Hayek’s “spontaneous order of the market” is entirely different from the concept of economy, the latter being an arrangement in which some agency uses means in the service of a uniform hierarchy of ends. On the contrary, the spontaneous order of the market or “catallaxy” does not guarantee the satisfaction of what people might regard as the important needs and does not serve a particular ranking of priorities. The advantage of this structure is that it increases the prospects of unspecified persons (i.e. everybody) to achieve their goals, without favoring particular people, objectives or values. To reach this ideal Hayek uses methodological individualism (which also favors microeconomic analysis over macroeconomics).

    It seems to me, though, that Rawls is also taking seriously the separateness of people but he succeeds in building a normative ideal that lies on the opposite of the Hayekean account. Roughly, equal and rational agents that are in an original position and operate under a veil of ignorance are likely to choose a basic structure that functions under the two principles of justice namely the principle that each person has an equal right to the most extensive liberties compatible with similar liberties for all and the principle that inequalities are to be allowed to the extent they provide the greatest benefit to the least advantaged person. Such a conception of justice respects individual freedom and seems more likely to be normatively justified than a conception of justice based on the idea of catallaxy. In this sense Rawls made intelligible what is unintelligible in the Hayekean system: a commitment to freedom can and should be compatible with and take into consideration egalitarian concerns and concerns of distributive justice. A civitas could rely on the priority of the right over the good and simultaneously build an overlapping consensus towards a uniform hierarchy of objectives.

    Thirdly, it should be asked what could be the implications of the catallaxy idea for competition policy? If every legal standard of evaluation of the market should be abandoned (i.e. total welfare, consumer welfare, fairness) except from consumer choice (potential a consumer protection legislation problem) one should ask what could be the reason for having antitrust laws.

    For Hayek the negative feedback mechanism of market, which tells people that what they have done so far no longer fits the circumstances, is the only way for us to maintain and/or improve a certain level of welfare in a constantly changing world. This adaptation process happens without taking into account merit. In other words, questions of fairness remain outside the scope of the market as a spontaneous order, the latter being a form of impersonal coercion. However, it should be asked how the concept of market failure fits into the system. In addition, how can Hayek explain the Silicon Valley who even though is the actual representation of innovation and entrepreneurship yet it begun and hugely relied on public funds. Apart from this how come humans’ conscious knowledge or institutional knowledge not being also evolutionary? ‘Ever tried. Ever failed. No matter. Try again. Fail again. Fail better’ says Beckett.

  9. Rodrigo Vallejo says:

    The Austrian School approach seems refreshing in many ways, although Im mildly perplexed by the libertarian implications that Kirzner (and to some extent Wohlgemuth) draws upon them. A competition law/policy sensitive to entrepreneurship capacities certainly seems desirable, but their prescriptions seems to simply rely of the unexamined premise that these capacities genuinely exist. Especially in developing economies I see a larger role for state economic/social policies in actively generating/stimulating those entrepreneurship capabilities within society, in an approach that has been termed as a “developmental state” (e.g. David Trubek et. al.). Hence, concerning competition policies in these contexts the (more flexible and reflexive) idea of an ‘extended more economic approach’ that Budzinski sketches seems thus also preferable. Potentially this would allow enforcement agencies to embrace a certain experimental ‘poliytheism’ in their competition policies that would make them more sensitive to context.

    Two final questions for discussion. First, how could/should the insights of the Austrian School impact conventional foundations for the recognition of patents (i.e. property rights over inventions) in our market economies? Second, to what extent an Austrian School believer would/should endorse ‘financial stability’ policies concerning the regulation of banking services in post-crises context? From an Austrian School perspective wouldn’t be better to just let banks go into bankrupty thus promoting market opportunities for entrepreneural innovation in banking services?

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