Free Capitalist Network - Community Archive
Mises Community Archive
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

What branch of economics is this?

rated by 0 users
Not Answered This post has 0 verified answers | 3 Replies | 1 Follower

Top 150 Contributor
752 Posts
Points 16,735
Sage posted on Mon, May 25 2009 6:01 PM

In Chapter 7 of Freedom, Society, and State, David Osterfeld talks about the problem of social coordination. Specifically, there are three problems of coordination that must be solved in any socio-economic system:

  1. Priorities: what goods should be produced.
  2. Efficiency: what form of production will allocate resources to their most highly valued ends.
  3. Distribution: how to compensate each participant in the productive process.

Of course, the market economy is the optimal solution to these problems.

My question is: what branch/field/subject of economics does this fall under? Welfare economics? Price theory?

AnalyticalAnarchism.net - The Positive Political Economy of Anarchism

  • | Post Points: 20

All Replies

Top 10 Contributor
Male
4,985 Posts
Points 90,430

It's a difficult question, and to me it just seems to show how true Mises' insight is. Namely, you can't divide economics up neatly into seperate compartments, there is one unified body of economic science (for the praxeologist that would be the study of human action).

 

"You don't need a weatherman to know which way the wind blows"

Bob Dylan

  • | Post Points: 20
Top 150 Contributor
752 Posts
Points 16,735
Sage replied on Mon, May 25 2009 6:50 PM

Well, you're right that you cannot divide economics into hermetically sealed compartments. As Mises puts it:

"There is no specialization, as all problems are linked with one another. In dealing with any part of the body of knowledge one deals actually with the whole.  . . . The economist must never be a specialist. In dealing with any problem he must always fix his gaze upon the whole system. . . . Economics does not allow of any breaking up into special branches. It invariably deals with the interconnectedness of all the phenomena of action." (quoted here)

But on the other hand, Mises didn't write HA in one chapter. He split the topics into different sections, while showing how they are interconnected and unified.

So I think we can find an answer to my question.

Wikipedia defines "welfare economics" as "a branch of economics that uses microeconomic techniques to simultaneously determine allocative efficiency within an economy and the income distribution associated with it." So it would seem that the problem of social coordination is part of welfare economics.

But in this chapter Osterfeld is drawing from Kirzner's Market Theory and the Price System, which is a book on price theory. A weird thing: there's no wikipedia page for "price theory."

AnalyticalAnarchism.net - The Positive Political Economy of Anarchism

  • | Post Points: 20
Top 10 Contributor
Male
5,255 Posts
Points 80,815
ForumsAdministrator
Moderator
SystemAdministrator

It'd fit into what is commonly referred to as welfare economics. Even Rothbard terms his own treatment of these kind of questions that. As for price theory, it's a rather common term, so I'm not sure why you can't find an entry on it. But it's rooted in microeconomics, and modern economics is more focussed on macro.

Freedom of markets is positively correlated with the degree of evolution in any society...

  • | Post Points: 5
Page 1 of 1 (4 items) | RSS