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We argue that the future of Austrian political economy rests on the study of how institutional entrepreneurs discover and implement alternative institutional arrangements conducive to economic growth. This requires a dual level of analysis in spontaneous order studies. How such institutional arrangements manifest themselves is ultimately an empirical question. As a progressive research program, Austrian political economy will entail cross-fertilization with other empirical branches of political economy that illustrate its own central theoretical contributions to political economy, namely economic calculation, entrepreneurship, and spontaneous order. Accordingly, we argue that such cross-fertilization with the work of Ronald Coase and Elinor Ostrom will further expound the institutional counterpart of “rivalry” in the market process, namely polycentricism and its empirical manifestation. Understanding the distinct relationship between rivalry and polycentricism will provide the central theoretical underpinning of institutional evolution.

Over the past decade or two, the Hayek Studies industry has been in a period of significant growth. A whole variety of books about Hayek, both his life and his thought, have appeared, with each trying to differentiate its product sufficiently to make a mark on both scholarship and sales. Into this fairly crowded marketplace comes a volume edited by two political scientists, neither of whom is known for contributions to the Hayek literature. The volume grew out of a lecture series at Utah State University, and the group of scholars that they assembled is notable as well for not being a cast of the “usual Hayekian suspects,” nor exclusively economists. In fact, there is only one economist contributing to the volume, with a couple of philosophers and one historian, and the rest being political scientists. In addition, all the essays address the concept of “spontaneous order,” which is central to Hayek's intellectual framework. More specifically, each essay approaches that topic in light of its relationship to “liberalism” and “conservatism.” The result is a largely excellent set of papers that offer critical and constructive explorations of the idea of spontaneous order and its place in Hayek's thought and in understanding the social world.

Traditional public choice analysis implicitly views political outcomes as the intention of a single-minded person. This view is seriously misguided. Rather than viewing politics as being done by one person or a group of persons acting in concert, this chapter presents an Austrian economist’s thoughts on what an Austrian theory of public choice would look like. Particular attention is paid to the emergent, rather than additive, quality that political outcomes exhibit.

Purpose – To present the connection between modern network theory and Hayek's ideas on the brain and spontaneous orders.

Methodology/approach – To show that Hayek's ideas on the brain, spontaneous order, and why socialism cannot work are confirmed by network and self-organization theory, and to use network and self-organization theory to bridge Hayek's theory of the mind to his work on spontaneous orders.

Findings – Spontaneous orders are scale-free networks, but humans evolved a preference for hierarchical networks, which are typical of tribes and firms – and socialism. However, hierarchies only work for teleological organizations, not for ateleological spontaneous orders like economies. Part of the human preference for human-organized networks comes from our “intentional stance,” which automatically sees patterns as evidence of an organizer.

Research limitations/implications – This work acts as an introduction to possible directions in spontaneous order research. New work in bridging evolutionary and cognitive psychology (which includes Hayek's work) with self-organization and network theory acts as a promising development for neuro-Hayekians.

Social implications – Understanding there is an evolutionary bias for certain kinds of networks, even though those are not appropriate for certain kinds of social orders, and understanding the nature of these networks should help us understand the true relationships among individuals, organizations, and spontaneous orders.

Originality/value of chapter – This work brings Hayek “up to date,” with network theory and self-organization, showing to what extent Hayek was talking about these concepts. Seeing the similarities and differences between hierarchical and scale-free networks helps one understand how they come about, and in what contexts.

Certain elements of Hayek’s work are prominent precursors to the modern field of complex adaptive systems, including his ideas on spontaneous order, his focus on market processes, his contrast between designing and gardening, and his own framing of complex systems. Conceptually, he was well ahead of his time, prescient in his formulation of novel ways to think about economies and societies. Technically, the fact that he did not mathematically formalize most of the notions he developed makes his insights hard to incorporate unambiguously into models. However, because so much of his work is divorced from the simplistic models proffered by early mathematical economics, it stands as fertile ground for complex systems researchers today. I suggest that Austrian economists can create a progressive research program by building models of these Hayekian ideas, and thereby gain traction within the economics profession. Instead of mathematical models the suite of techniques and tools known as agent-based computing seems particularly well-suited to addressing traditional Austrian topics like money, business cycles, coordination, market processes, and so on, while staying faithful to the methodological individualism and bottom-up perspective that underpin the entire school of thought.

The idea of spontaneous orders dating back to Mandeville and elaborated at length by the Austrian School of Economics (Menger, Hayek) is no doubt a major contribution to the understanding of society (Hamowy, 1987). It offers great insights into how human beings solve coordination problems by unintentionally creating mechanisms for social interaction such as the market, money, language, science and law (Hamowy, 1987; Petsoulas, 2000). Such a successful concept must have its limits somewhere, as a concept which explains everything covers nothing. I wish to explore this question by relating the evolution of European integration after the Second World War to the Hayek theory of a spontaneous order. Perhaps Hayek contributed most to the elaboration of Adam Smith's vision of a self-correcting social order that needs little direction and control (Boettke, 1998). Hayek underlined time and again the importance of spontaneous processes with the entailed claim that government must adopt an attitude of humility towards conventions that are not the result of intelligent design, the justification of which in the particular instant may not be recognizable, and that may appear unintelligible and irrational (Hayek, 1960, 1982).

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.

Purpose – To show that Hayek's cognitive theory sheds light on Hayek's institutional theory.

Methodology/Approach – Although F. A. Hayek contributed richly to many fields of economics – from capital theory to monetary theory, and from institutions to spontaneous order – one theme is omnipresent in his work: the knowledge problem. This paper examines Hayek's work in psychology, The Sensory Order, and argues that there exist strong parallels between Hayek's cognitive and institutional theories.

Findings – Hayek's institutional (or social) theory makes a lot more sense when understood as a necessary consequence of his cognitive theory. Furthermore, Hayek's cognitive theory allows for rational individuals making choices that are socially embedded.

Research limitations/implications – Three Hayekian themes are explored: (1) institutional implications of limited knowledge; (2) learning and knowledge generation; and (3) mental models. The paper then uses a challenge within Hayek – the tension between microlevel methodological individualism and macrolevel institutional evolution – as a starting point toward resolving the lingering individual-culture methodological puzzle in contemporary economics. These are mere starting points for further research.

Originality/value of paper – Horwitz (2000) writes that “Hayek's thought will have come to fruition when the social sciences abandon rationalist and constructivist explanations of social phenomena in favor of ones that recognize the roles of tacit and contextual knowledge, institutional evolution, and spontaneous order. Such an approach would dramatically improve our understanding of the human mind.” This paper offers a step in that direction.

The purpose of this chapter is to examine the influence exerted on the thought of F.A. Hayek by the work of the biologist and founder of system theory, Ludwig von Bertalanffy. The author’s methodology includes textual analysis and archival work. It is argued first of all that Bertalanffy provided Hayek with a conceptual framework in terms of which he could articulate the philosophical significance of his theoretical psychology. In particular, Bertalanffy’s work afforded Hayek a set of concepts that helped him to articulate the relationship between mental and physical events – that is, between mind and body – implied by his theory. The second part of the chapter builds on the first by exploring how Hayek subsequently applied the abstract conceptual framework or ontology set out by Bertalanffy to the economy. In this way, Bertalanffy’s ideas helped Hayek to articulate and shape his emerging view of the economy as a complex adaptive system, which consists of different ‘levels of organisation’, which displays ‘structural’ or ‘emergent properties’, and which evolves over time on the basis of those group-level properties.

The paper ' s aim is to report a research study on the mediator and outcome variable sets in scenario planning.

This is a cannonical correlation analysis (CCA)

Twso sets of variables; one as a predictor set that explained a significant amount of variability in the second, or outcome set of variables were found.

The study did not involve random selection or assignment and used perception-based measures.

The findings support scenario planning as a tool to reinforce certain decision styles and learning organization culture.

A critical contribution to scenario planning research, this study brings some order to the variety of variables espoused to be involved in scenario work. Clear outcomes are a learning culture and intuitive/dependent decision styles. The study makes a real contribution to quantitative scenario studies.