Using Psychology to Reinforce the Austrian Argument for Freedom: The Case of Loan Decisions

Author: Vihanto M.

Source: Constitutional Political Economy, Volume 9, Number 4, December 1998 , pp. 303-321(19)

Publisher: Springer

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Abstract:

The emphatic statements of F. A. Hayek, and other members of the Austrian school of economics, in advocacy of a free society have produced much misgivings among the economics profession. The paper aims to make the Austrian views more intelligible by tracing them back to a theory of the mind that Hayek develops in The Sensory Order. More generally, the paper argues that Austrian economics would greatly benefit from extending itself from a pure logic of choice toward psychological analysis. The argument is illustrated throughout the paper by examples taken from the loan decision process of a banker.

Language: English

Document Type: Regular paper

Affiliations: 1: Department of Economics, Turku School of Economics and Business Administration, Turku, Finland

Publication date: 1998-12-01