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Chapter 15: Complexity and Austrian Economics
* Roger Koppl 15.1 Introduction Austrian economics is a school of thought within the broader complexity movement in economics. The characteristic feature of Austrian economics is often thought to be its supposed rejection of mathematics. Complexity theory, by contrast, is often equated with the mathematical tools used by complexity researchers. Thus, the intersection of Austrian economics and complexity theory might seem to be empty. There are, however, rather deep connections between complexity theory and Austrian economics. Some of the basic features of Austrian economics are also defining characteristics of complexity theory. These common features make Austrian economics a particular school of thought within the broader complexity movement in economics. I will briefly indicate what I mean by “Austrian economics,” before reviewing some of the historical connections between complexity theory and Austrian economics. I will then discuss the substantive connections and the contributions of Austrian economics to complexity economics. 15.2 What is Austrian economics? “Austrian economics” is the school of economic thought that began with Carl Menger’s 1871 classic, Gründsätze der Volkwirtschaftsleher, or Principles of Economics ( 1981). Menger was an Austrian national who taught at the University of Vienna. Thus, the school of thought he founded was called the “Austrian school” of economics. Menger’s book made him one of the three traditionally cited co-creators of marginal utility theory and neoclassical economics. William Stanley Jevons and Marie Esprit Léon Walras were the others. Unlike the other two founders of neoclassical economics, however, Menger did not use equations or mathematical...
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