Table Of ContentMarket Process
and Market Order
ECONOMY, POLITY, AND SOCIETY
Series Editors
Virgil Storr and Jayme Lemke, Mercatus Center
The foundations of political economy—from Adam Smith to the Austrian
school of economics, to contemporary research in public choice and institu-
tional analysis—are sturdy and well established, but far from calcified. On
the contrary, the boundaries of the research built on this foundation are ever
expanding. One approach to political economy that has gained considerable
traction in recent years combines the insights and methods of three distinct
but related subfields within economics and political science: the Austrian,
Virginia, and Bloomington schools of political economy. The vision of this
book series is to capitalize on the intellectual gains from the interactions
between these approaches in order to both feed the growing interest in this
approach and advance social scientists’ understanding of economy, polity,
and society.
This series seeks to publish works that combine the Austrian school’s
insights on knowledge, the Virginia school’s insights into incentives in non-
market contexts, and the Bloomington school’s multiple methods, real-world
approach to institutional design as a powerful tool for understanding social
behavior in a diversity of contexts.
Titles in the series
Institutions and Incentives in Public Policy: An Analytical Assessment of Non-Market De-
cision-Making, edited by Rosolino A. Candela, Rosemarie Fike, and Roberta Herzberg
Economics and the Public Good: The End of Desire in Aristotle’s Politics and Ethics, by
John Antonio Pascarella
Culture, Sociality, and Morality: New Applications of Mainline Political Economy, edited
by Paul Dragos Aligica, Ginny Seung Choi, and Virgil Henry Storr
Nudging Public Policy: Examining the Benefits and Limitations of Paternalistic Public
Policies, edited by Rosemarie Fike, Stefanie Haeffele, and Arielle John
Informing Public Policy: Analyzing Contemporary US and International Policy Issues
through the Lens of Market Process Economics, edited by Stefanie Haeffele, Abigail R.
Hall, and Adam Millsap
Exploring the Political Economy and Social Philosophy of Vincent and Elinor Ostrom,
edited by Peter J. Boettke, Bobbi Herzberg, and Brian Kogelmann
Market Process and Market Order: From Human Action, But Not of Human Design, edited
by Rosolino A. Candela, Kristen R. Collins, and Christopher J. Coyne
Market Process
and Market Order
From Human Action,
But Not of Human Design
Edited by Rosolino A. Candela,
Kristen R. Collins, and Christopher J. Coyne
LEXINGTON BOOKS
Lanham • Boulder • New York • London
Contents
Figures vii
Tables ix
Formulae xi
Introduction: From Human Action, But Not of Human Design:
The Market Process and the Market Order 1
Rosolino A. Candela, Kristen R. Collins, and Christopher J. Coyne
PART I: MARKET PROCESS THEORY IN CONTEXT
1 Federalism-Preserving Markets 17
Andrey Yushkov
2 Keeping the Money Stream Stable: Hayek’s Response to
Wicksell and Its Implications for Monetary Policy Today 41
Casey Pender
PART II: CULTURAL AND SOCIAL EMBEDDEDNESS
OF A MARKET ORDER
3 Austrian Economics on Mushrooms: A Mycelial Approach
to Understanding Market Processes in Disaster Recovery
Planning in Vancouver, Canada 75
Jonathan Eaton
4 Sociocultural Markets: Matrifocal Families and Social
Capital in the Caribbean Region and Diaspora 103
Kayleigh Thompson
v
vi C ontents
PART III: ENTREPRENEURSHIP, KNOWLEDGE, AND
THE MARKET PROCESS
5 Foreign (Aid) in a Domestic Sense: Public Health in
an Unincorporated Territory 129
Brian Marein
6 Informal Institution Entrepreneurs and the Knowledge Problem 155
Shadwa Zaher
7 From Raid to Trade in Medieval Dublin: Entrepreneurship
and the Emergence of a Trade Diaspora 179
Craig Lyons
PART IV: SOCIAL CHANGE AND THE MARKET ORDER
8 Hayekian Utopianism 209
Jeffrey Carroll
9 How It Can Pay to Be Moral: Markets and the Demand
for Morality 229
Alexander Motchoulski
10 Critical Studies of International Development Education
and Austrian Political Economy: Diverging Approaches
and Converging Concerns 251
Mariam Sedighi
Index 275
About the Editors 285
About the Contributors 287
Figures
Figure 5.1 D epartment of Health Resources, 1928–1929 to
1942–1943 (Thousands of Dollars) 137
Figure 5.2 P ublic Health Nurse Making Home Visits in
a Rural District 140
Figure 5.3 P ublic Health Nurse Making Home Visits in
an Urban District 141
Figure 6.1 Guanxi Networks 168
vii
Tables
Table 1.1 Different Types of Federalism, Their Market-
Preserving Properties, and the Nature of
Their Incentives 26
Table 1.2 Federalism and Subnational Capital Markets
in the USA, Germany, and Russia 31
Table 2.1 Realized versus Targeted Inflation Rates in Monetary
Unions with Explicit Inflation-Targeting Regimes 42
Table 5.1 Expenditures on PHUs by the Insular Department
of Health, 1931–1932 to 1938–1939 138
Table 8.1 Methodological Approaches Matrix 212
ix
Formulae
Formula 2.1 MV = PY 50
Formula 2.2 ∆m + ∆v = π + ∆y 50
Formula 2.3 i = r* + θ (π) 53
Formula 2.4 i = r* + θ (π − π*) 54
Formula 2.5 i = r* + π + θ (π − π*) + θ (y − y*) 58
π y
Formula 2.6 i = r* + θ (π + Δy) 59
PY
Formula 2.7 i = r* + π + θ (π + Δy − x*) 59
PY
xi
Introduction
From Human Action,
But Not of Human Design
The Market Process and the Market Order
Rosolino A. Candela, Kristen R. Collins,
and Christopher J. Coyne
The collection of chapters in this edited volume explores and develops,
from an interdisciplinary perspective, the relationship between the Austrian
account of the market process and the broader market order within which
the market process is embedded. The purpose of this introductory chapter
is twofold. First, we provide an overview of the intellectual context within
which Austrian political economy is situated. In doing so, our goal is to em-
phasize the analytical points of departure that distinguish political economy
from an Austrian perspective, as well as how the contributory chapters ex-
plore and develop the overall theme of this edited volume. Austrian political
economy, we argue, neither assumes that the market process operates within
an institutional vacuum, nor that market prices are sufficient for social order.
Rather, it explains how social institutions emerge as a result of human action,
though not of human design, including law, money, and property rights, each
of which provide distinct institutional prerequisites for market pricing. Fur-
thermore, given that Austrian political economists stress the context-specific
nature of knowledge, the totality of which cannot be summarized in market
prices, a broader market order must analyze the communication of extra-
economic knowledge through shared expectations about the meanings at-
tached to purposive action, embodied in the customs, informal norms, or
culture of a particular society. Moreover, we discuss several implications that
follow from these highlighted aspects of Austrian political economy.
Secondly, we provide an overview of each of the subsequent chapters. Each
chapter of this volume, which contains original research, emphasizes the con-
tinuing relevance of the contributions of Austrian political economy to our
understanding of the market process and market order. The diversity in topics
and approaches will make the volume of interest to readers in a variety of
fields, including economics, entrepreneurship, history, philosophy, political
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