He makes the crucial distinctions between Market Economic system and Market Society! Closer reflection reveals after all that what is meant here by data as a datum” is merely technical data about the usage of sources, while tastes and sources as such are identified to every participant available in the market. The market appears to it as a continuous process, in the midst of which the data possessed by some members turn into diffused to many, while new data is acquired by some, and some earlier data becomes obsolete.
It goes without saying that it is attainable to change the rigor of the belief in regards to the universal market data, and this has been accomplished just lately. In their defense of the market economic system the sick-skilled” economists could have a powerful or a weak case. It cannot be refuted by reference to a fictitious optimum irrelevant to it. Evidently the market processes of reality require closer examine than they have up to now obtained. In a market economic system, at all times, as Professor Kirzner says, an infinite amount of ignorance stands in the way in which of the whole coordination of the actions and choices of the numerous market members.
The formalistic mind, we could observe, incapable of conceiving of a market otherwise than as a set of determinate relationships, is helpless when confronted with a set of forces the interaction of which yields no determinate consequence. Innumerable opportunities for mutually helpful change.. are prone to exist unperceived.” Market processes, to make sure, will cut back such ignorance. While the competitive market process leads to the erosion of profit margins, it also conjures up some producers to seek safety in product differentiation. The image of economic action that emerges from our reflections is thus that of the market as a continuous process without beginning or end. I shall now investigate in detail the characteristics peculiar to Austrian pondering.
Before substantiating my thesis by contrasting the essential characteristics of Austrian thought with those of the classical and the Lausanne college, I have to meet two obvious objections. The quantities and prices of goods offered available in the market rely upon these individual needs and talents. My next activity is to differentiate the particular characteristics of the Viennese college from those of the Lausanne college. So the differences existed, and so they still do. It is for us to determine those characteristics of the Austrian fashion of thought to which formalistic analysis can not do justice. Now, there may be actually a basic nexus of all market phenomena, and the Austrians certainly not denied this truth.
We thus see why economic plans occupy a central place in Austrian principle, while the final nexus of market phenomena is neglected. This is the truemeaning of the famous sentence: L’individu peut disparaitre, pourvu qu’ilnous laisse cette photographie de ses goῦts.” 21 Here plainly man as economic agent does not stand at the heart of economic life. It must be admitted that hitherto the scope of economic principle has been unduly restricted to the formal characteristics of the economic downside and its implications. A market will exhibit inelastic expectations only if it believes that value is in the end governed by long-run forces, and if it has a fairly definite conception of what these forces are.