Austrian school economists have long been interested in monetary and financial operations that characterize modern capitalism. With a few exceptions, this interest was confined, at least until the late twentieth century, primarily to the aggregate effects of these operations on the workings of the economy at large, focusing on the overall outcomes of human action rather than specifics of how the decision to engage in those actions comes about. In other words, Austrian theorists emphasized the role of business enterprise but not the conduct of business. The last thirty years of development in the Austrian school have seen a profound change in this regard, with notable contributions emerging in all areas of business education. This chapter demonstrates the development of Austrian theory with respect to finance and makes the case that this development is sufficient in scope to qualify as a distinctive Austrian theory of finance.
Jonathan B. Wight
Potential market failures in economic research are addressed in part through enlightened self-interest (reputation building) and strengthened through nonconsequentialist ethical traditions that emphasize duty and virtue. To illustrate, this chapter follows a hypothetical student researcher making ethically laden professional choices; it draws attention to the moral hazards in truth seeking and the ways in which socially enforced norms can reduce cheating. The often-unstated yet critical role of an academic mentor is to indoctrinate students in the ideology of science and the virtues of integrity—in opposition to utility maximization. Critical thinking can be enhanced when these considerations are elaborated using the theory and evidence of Adam Smith and Vernon Smith, respectively. The chapter also explores the role of the economics profession in promoting ethical conduct among its members.
Robert F. Garnett Jr.
To address the epistemic asymmetry and insufficiency that characterize the role of the undergraduate economics educator, the author advocates (pace DeMartino 2011) an ethical turn in the scholarship of economics education. The ideals of liberal education and academic freedom are widely admired among economics educators. To expand professional understanding of how and why undergraduate economics courses should foster liberal education outcomes, such as the expansion of students’ capacity for reflective judgment, mainstream and heterodox economists should acknowledge and explore the ethical dimensions of their dual role as disciplinary experts and academic citizens.
The system-wide implications of entrepreneurship are usually linked to the effects of innovation on economic growth or to the consequences of alternative institutional settings on various forms of entrepreneurial activity. Yet the motivations and consequences of system-wide entrepreneurship go well beyond those related to innovation and institutions. The goal of this chapter is to show that the market process is entrepreneurial in all its aspects, including its most quotidian operations and adjustments. Specifically, this chapter argues that adopting a Kirznerian alertness perspective allows us to appreciate how entrepreneurship is essential to, and at the center of, the whole dynamic market process, including not only innovation and institutions but also growth, allocation of resources, equilibration, and business cycles, all of which are, ultimately, products of entrepreneurial action.