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The Context of Context: The Evolution of Hayek's Epistemic Turn in Economics and Politics

WHAT IS SO AUSTRIAN ABOUT AUSTRIAN ECONOMICS?, Advances in Austrian Economics, Volume 14, Roger Koppl, Steven Horwitz, Pierre Desrochers, eds., Emerald Group Publishing Limited, pp. 69-86, 2010

GMU Working Paper in Economics No. 12-11

20 Pages Posted: 30 Jan 2012  

Peter J. Boettke

George Mason University - Department of Economics

Emily C. Schaeffer

affiliation not provided to SSRN

Nicholas A. Snow

Wabash College - Economics

Date Written: 2010

Abstract

F. A. Hayek's contribution to economic science is broadly remembered as relating to the “use of knowledge in society” but his contribution to economics of knowledge are often summarized differently. We emphasize the contextual nature of the knowledge. Hayek says the market economy is capable of eliciting and utilizing in the process of coordinating economic activities. There is, however, a double meaning of context that we explore. Hayek developed his argument about the use of knowledge in the context of the socialist calculation debate, and the aspect of knowledge he came to focus on was the contextual nature of knowledge in human action in markets, politics, law, and society. This paper traces out the development of Hayek's focus on the epistemic foundations of the complex coordination in an advanced market economy and shows that his critique of classical and market socialism led to a refined, subtle approach to understanding spontaneous order. Furthermore, it is precisely Hayek's focus on the role of institutions in creating the conditions for the utilization and transference of knowledge through the price system that continues to shape the progressive research programs in economic science and public policy analysis that is his legacy

Keywords: Hayek, Context, Austrian Economics, Institutions

JEL Classification: B25, B52, B53

Suggested Citation

Boettke, Peter J. and Schaeffer, Emily C. and Snow, Nicholas A., The Context of Context: The Evolution of Hayek's Epistemic Turn in Economics and Politics (2010). WHAT IS SO AUSTRIAN ABOUT AUSTRIAN ECONOMICS?, Advances in Austrian Economics, Volume 14, Roger Koppl, Steven Horwitz, Pierre Desrochers, eds., Emerald Group Publishing Limited, pp. 69-86, 2010; GMU Working Paper in Economics No. 12-11. Available at SSRN: https://ssrn.com/abstract=1995148

Peter J. Boettke (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Emily C. Schaeffer

affiliation not provided to SSRN ( email )

Nicholas A. Snow

Wabash College - Economics ( email )

P.O. Box 352
Crawfordsville, IN 47933-0352
United States

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