Formalism in Austrian‐school welfare economics: Another pretense of knowledge?

1 September 1993

journal article
research article
Published by Taylor & Francis in Critical Review

Vol. 7 (4) , 567-592
https://doi.org/10.1080/08913819308443319

Abstract

Contemporary Austrian‐school economists reject neoclassical welfare theory for being founded on the benchmark of a perfectly competitive general equilibrium, and instead favor a formal theory deemed consistent with the notions of radical subjectivism and disequilibrium analysis. Roy Cordato advances a bold free‐market benchmark by which to formally assess social welfare, economic efficiency, and externalities issues. Like all formalist, a priori theory, however, Cordato's reformulation cannot meet its own standards, being theoretically and empirically flawed, and perhaps ideologically suspect.

Keywords

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