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In “An Austrian Theory of Spatial Land,” Fred E. Foldvary addresses the disregard of spatial issues in basic Austrian economic theory as formulated by Carl Menger (1871) and elaborated upon by Ludwig von Mises (1940). Foldvary shows that Johann Heinrich von Thünen (1826) and Henry George (1879/1884), in particular, serve to fill these gaps in the classical Austrian theory of the market process. Moreover, a theory that incorporates spatial land leads to the conclusion that Austrian business cycle theory is incomplete: The “malspeculation” that accompanies urbanization whenever capital and labor rather than land are the main sources of tax revenue will have to be added to the malinvestment that is caused by expansionary monetary policies.

The market is not the only spontaneous order. Hayek himself drew attention to language and English common law as other examples, noting that they had first been identified as such by Scottish Enlightenment philosophers such as Adam Smith and Adam Ferguson. Hence, such orders “are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the results of human action, but not the execution of any human design” (Ferguson, 1782, sec. II). In the 20th century, Michael Polanyi used the term spontaneous order for the polycentric feedback system that explains the growth of scientific knowledge (Polanyi, 1962).

The neoclassical theory of investments, as formulated by Dale Jorgenson (1963, 1967), can be expressed in a fairly straightforward way.¹ Neoclassical formulations such as Jorgenson's were preceded by contributions by many influential economists. Both John Maynard Keynes and Irving Fisher, for example, argued that investments are made until the present value of expected future revenues, at the margin, equals the opportunity cost of capital. This means that investments are made until the net present value is equal to zero.

The first Austrian school was preoccupied with the nature of capital, its time dimension, and the necessity of interest. The second school also focused on economic dynamics, but with an orientation toward issues related to entrepreneurial activity as well as the use of information and knowledge in economic evolution. The third Austrian school, which was organized around Karl Menger's mathematical colloquium in Vienna, clarified the necessary and sufficient conditions for static and dynamic economic equilibriums. In addition, it created the foundations of economic game and negotiation theories.

An NBM is a market form in that it is made of institutions and business models. It arises in a particular context where abundant novelty issuing from the producer side meets substantial search costs and evaluation difficulties on the consumer side. In a NBM consumers don’t necessarily know what they are searching for. These difficulties on the demand side are specifically caused by the fact that novel goods, which are experience goods, often require new “rules for choice” as new suites of evaluative criteria.