Ludwig Lachmann offers a compelling account of social coordination through the mutual orientation of individual plans to a shared institutional order. His approach explains how separate actions can be coordinated under conditions of uncertainty by stabilizing expectations through institutions. I argue, however, that this account can be extended by incorporating Hubert Dreyfus’s phenomenological notion of skillful coping. While planning remains essential, especially for novices and in situations of breakdown, much everyday coordination depends on embodied practical skills that enable individuals to respond appropriately without constant deliberation. Institutions coordinate not only by orienting plans but also by becoming internalized as practical skills and materially embedded in equipment. Building on this, I argue that capital complementarity depends both on the compatibility of production plans and on the compatibility of the practical skills through which capital goods are employed. This expanded account of Lachmann’s institutional order arguably explains how social coordination occurs in often-taken-for-granted ways through embodied skills, equipment, and practices.
Historically, issues surrounding capital and interest have been tied to conflicts over exploitation, domination and the choice between capitalism and socialism. By contrast, modern growth and financial theory define capital as a homogeneous factor in a production function or as a portfolio of financial claims, thereby bracketing both the system question and the long‑standing critique of capital income. The paper argues that a serious theory of capital must not be detached from the theory of economic systems and, by implication, from the configuration of liberties and unfreedoms that different institutional arrangements entail. Drawing on the practice‑based capital concepts of Menger and Mises, the paper sets out a notion of capital as a money‑denominated aggregate of business assets and liabilities used in monetary calculation, and shows how this concept is inseparable from an institutional framework characterized by private property, entrepreneurship, money and markets for loans and producer goods. In doing so, it proposes a way of reconnecting capital theory to the analysis of economic systems and liberty.
The economics of religion is a growing subfield, yet no paper has connected its findings to Austrian economics. Three Austrian insights are complementary with the current literature and provide a unified theoretical framework for understanding the relationship between religion and religious regulation. By “religious regulation,” we mean attempts at hierarchical religious control by the state. First, government interventions and regulation of religious communities entail the same knowledge problems that beleaguer regulation of markets. Second, Austrian market process theory explains how religious club goods adapt to government interventions. Third, Austrian dynamics of interventionism explain why religious regulations rarely achieve planners’ intended outcomes, and how those outcomes are used to justify harsher religious regulations. We conclude with future avenues of research that pair Austrian insights with the current economics of religion literature.
This paper argues that, even under hyperadvanced artificial intelligence, human beings remain irreducible co-creators of economic value in any economy that continues to serve human ends. Drawing on the Austrian conception of the productive process, we identify three functions whose scarcity originates not in any deficit of computational capacity but in the preferences, constraints, and fallibility of human agents: intertemporal waiting, the absorption of genuine uncertainty, and entrepreneurial judgment. Because their supply remains scarce relative to the economic need for them, these functions sustain three persistent forms of income—pure interest, uncertainty premium, and entrepreneurial profit—however powerful the available AI may be. Far from rendering them dispensable, AI may intensify the demand for them: by expanding the range of achievable productive processes, it endogenously generates new human wants; by widening the activities open to human agency, it multiplies opportunities for self-realization through creation. AI commoditizes intelligence, not the agency of those who wait, bear uncertainty, and ultimately judge. We conclude that a society of owners—one where ownership of productive capital, including AI-augmented capital, is sufficiently widespread—preserves human productive agency more effectively than a universal basic income or centralized planning.
Erwin Dekker’s causal-genetic account of the Austrian self offers an important corrective to radical subjectivist accounts of creativity, agency, and choice. This commentary argues that the account is powerful but incomplete. First, it risks oscillating too quickly between mind, self, subjectivity, individuality, individualism, and consciousness, thereby obscuring the fact that some dimensions of mentality are more culturally constructed than others. Second, it would benefit from a more explicit dual-inheritance framework that integrates cultural cognition with biologically evolved human nature. Drawing on Hume, Smith, contemporary evolutionary anthropology, and research on animal and infant consciousness, I argue for a naturalised Austrian theory of the self in which cultural institutions and processes modify, amplify, and diversify our partly innate mental capacities. This biocultural perspective preserves Dekker’s insight that selves are socially mediated while better avoiding both radical subjectivism and cultural determinism.
This paper proposes a Hayekian flatcoin, i.e. a blockchain-based currency whose value is defined by a continuously adjusted basket of commodities and maintained through competitive private issuance. It begins from the observation that contemporary stablecoins reproduce the inflationary bias of state-issued money by pegging to fiat currencies. Much of the cryptocurrency literature draws on F. A. Hayek’s 1970s writings, notably Choice in Currency and Denationalisation of Money, to justify this practice, yet it neglects his 1943 essay A Commodity Reserve Currency, which offers a concrete mechanism for a money of stable purchasing power. Revisiting that earlier proposal and drawing on later Austrian monetary theory and historical evidence of commodity standards, the paper shows how modern blockchain technology can implement Hayek’s rule-bound design. The result is a proposed monetary standard that would use blockchain infrastructure to implement Hayek’s commodity-reserve logic. A Hayekian flatcoin could offer an inflation-resistant alternative to fiat-backed stablecoins and illustrate how entrepreneurial innovation can extend the market order in the digital age.
This paper develops a human-centered conceptual framework for understanding organizations in the age of artificial intelligence by reassessing organizational capabilities, human agency, and firm-level entrepreneurship. While artificial intelligence is commonly framed as a force of automation and optimization, we argue that its deeper organizational significance lies in the interface it establishes with human intelligence and the restructuring of firm’s human capabilities it generates in the process. Traditional capabilities and strategic human resource frameworks - particularly the static understandings of the resource-based approaches to the firm - prove insufficient for capturing this transformation, as they struggle to account for discovery, the generation of heterogeneity, and processes of change under uncertainty. The paper advances three main theses. First, the diffusion of artificial intelligence underscores and amplifies rather than diminishes the strategic relevance of human judgment, tacit knowledge, and entrepreneurial action within the firm. Second, strategic human resource management emerges as a crucial nexus for analyzing this shift, once the static interpretation of the resource-based view of the firm is transcended. Third, market process theory, rooted in Austrian economics, provides one of the possible dynamic foundations and a solution by integrating entrepreneurship into a theory of the firm and emphasizing knowledge coordination, discovery, and action under uncertainty. The argument unfolds in four steps. We first examine how artificial intelligence compels firms to rethink resources, capabilities, and strategy. We then trace the evolution and limits of strategic human resource management under the resource-based view. Next, we introduce market process theory as a corrective framework. Finally, we articulate a research agenda that integrates strategic human resource management and market process theory to address key organizational challenges at the human–artificial intelligence interface. Together, these elements conceptualize organizations as hybrid systems in which human and artificial intelligence co-evolve within institutionally shaped knowledge processes.
This article examines a polycentric polity's ability to deal with external and decision costs in a context of radical uncertainty and deep pluralism. I extend Buchanan and Tullock's constitutional political economy framework to account for how disagreement about externalities assessments shapes constitutional choices. While polycentricity effectively aggregates dispersed knowledge about external costs, it generates its own cross-jurisdictional externalities, particularly through mobility rights between jurisdictions. Depending on context, free exit and entry are either a public good or a public bad for the broader polity. I argue that anarchistic interpretations of polycentricity tend to underestimate these second-order externalities. A polycentric polity needs both a state legitimate enough to mitigate cross-jurisdictional externalities and jurisdictional autonomy sufficient to leverage local knowledge and diverse perspectives.
Economists have long described the historical production of crude oil (and natural gas) under the rule of capture as a market failure. Assigning first-title to the physical above-ground possession incited too many wells and surplus production between competing surface owners, resulting in the physical and economic waste of a valuable nonrenewable, depleting asset. Government intervention based on sound reservoir principles was judged necessary to achieve economic efficiency and avoid waste in the face of this time-preference and commons problem. This consensus on the problem and solution has gone virtually unchallenged. Yet a classical-liberal, free-market perspective yields a different conclusion. The commons problem could have been all but removed under a homestead theory that assigned initial property rights to the first developers of oil and gas reservoirs. The unbounded nature of resource creation in place of fixed supply questions the alleged market defect of present-oriented production. And importantly, the incentive to minimize cost and maximize revenue was not absent to drillers in the U.S. experience, just hampered and misguided by the cumulative effect of government intervention. A more rational development of the upstream industry from its nineteenth-century inception was frustrated by judicially imposed lease obligations, state and federal antitrust law, nonneutral taxation, public-land policies, pipeline regulation, import restrictions, and conservation law itself. The economic waste that has long been attributed to profit-maximizing entrepreneurship was also due to unsettled knowledge about reservoir mechanics. These government and analytic failures, not market failure, were the historical obstacles to wellhead oil and natural gas conservation.
The rise of recent AI technologies has led to significant discussion of whether it is possible to use these technologies to improve or bypass market mechanisms. However, it turns out that much of this discussion is beset by confusions. Hayek-inspired critics of AI-driven central planning are right to focus attention on the fact that the issue is not just the computation of large amounts of data, but also the fact that economic allocations depend on private or even non-existent information about individual wants and needs. However, what this response fails to note is the fact that AI may increasingly be able to predict precisely these wants and needs. This is not the end of the debate either, though, as the feasibility of central planning is not all that matters here. It also matters whether central planning is desired. Since the act of choice can express who we are as people, the answer is often no. Importantly, this desirability-focused dimension of the debate is intertwined with the epistemic dimension. Being aware of this connection allows for a more balanced assessment of when and where AI can enhance market-based allocations.
This article reconstructs the economic dimension of Bruno Leoni’s thought, focusing on a part of his work that has often remained in the background when his legacy is approached primarily through legal and political lenses. Drawing on his essays and reviews in Il Politico, together with Freedom and the Law and later collected papers, the study shows that Leoni engaged in a sustained reflection on problems of law, politics, and social coordination that can be read as a contribution to political economy. It argues that this dimension of his work helps clarify the internal coherence of his broader intellectual project and illuminates the analytical foundations of his better-known reflections on law and political representation. By situating Leoni within the selective reception of Austrian ideas in Italy, the article suggests that he should be understood not merely as a transmitter of Hayek, but as a thinker who developed original arguments in close dialogue with Austrian themes. Drawing on archival material and contemporary Italian debates, the analysis also illustrates how legal scholarship could serve as a vehicle for economic reasoning in the mid-twentieth century.
This paper advances a Huttian rebuttal to the narrative of the “specialization trap,” which posits that specialization creates unhedgeable occupational risks by eroding skill generality. Drawing on W. H. Hutt’s theories of consumer sovereignty, idle resources, and the strike-threat system, we contend that the perceived “trap” is a misinterpretation of market coordination and is primarily an artifact of institutional friction rather than an inherent defect of the division of labor. We first argue that specialization is a proactive investment by workers, as entrepreneurs of their own human capital, to satisfy dynamic consumer preferences. Through the wage contract, workers already hedge career downside risks by shifting them to capitalists in exchange for stability. Furthermore, we reframe specialized unemployment not as a structural failure, but as a period of entrepreneurial “prospecting,” providing a service of “availability” to ensure resources are allocated to their highest-valued use; skill updating is analogously reframed as capital maintenance. Finally, we demonstrate that the vulnerability of specialized workers stems from institutional fences—wage rigidities and entry barriers maintained by the strike-threat system—that paralyze market fluidity. We conclude that true security for the specialized laborer lies not in a retreat toward genericism, but in the removal of institutional obstacles to dynamic adjustment.
Ludwig M. Lachmann published the first edition of Capital and its Structure in 1956, coming up to its seventieth publication anniversary. This work was an important milestone in his academic career cementing his pwrticular epistemology to his now iconic theory of Capital. The early reception of Lachmann’s work by Austrian scholars varied widely from admiration to severely critical. But current Austrian scholars are much more approving and appreciative of his work in general and of his capital theory in particular. In this paper we show how Lachmann’s approach to capital theory lends itself to the concept of Macaulay’s Duration (Hicks’s average period) and to “capital as finance.” When one incorporates such financial concepts into the Austrian tradition, we can grasp a better understanding of forward-looking, entrepreneurial attempts to create value.
Institutional risk does not merely reduce the level of investment—it reshapes its composition. This paper shows that when institutional forces reduce the expected cash flows of committed capital, entrepreneurs substitute toward more versatile but less productive configurations and shorter investment horizons. The sensitivity of any project to this distortion is multiplicative in the specificity of its stages and the duration of the project. In a repeated setting, specific capital attracts further institutional risk, and the equilibrium level of specialization falls below what static analysis predicts. The economy operates inside its productivity frontier because the institutional environment makes the most productive investments unattractive.
