Contributions in modern theoretical physics and chemistry on the behavior of nonlinear systems, exemplified by Ilya Prigogine's work on the thermodynamics of open systems, attract growing attention in economics. Our purpose here is to relate the new orientation in the natural sciences to a particular nonorthodox strand of thought within economics. All that is needed for this purpose is some appreciation of the general thrust of the enterprise, which involves a shift of perspective from the determinism of conventional physics to (...) the nonteleological open-endedness, creative, and nondetermined nature of evolutionary processes. (shrink)

F.M. Scherer has not effectively rebutted my subjectivist criticism of the standard microeconomic welfare model; Scherer's historical reference to what Congress (allegedly) believed is irrelevant to the theoretical concerns raised by subjectivism. Nor does my “principal” criticism of antitrust policy rests on “philosophical foundations”; my principal criticism rests on conventional economic analysis and a detailed economic history of the classic antitrust cases. My conclusion that the electrical equipment conspiracy of the late 1950s had no significant effect on market prices is (...) supported by Ralph Sultan's findings; indeed, it is Scherer who brutally ignores the context and misrepresents the general thrust of Sultan's research. Scherer's comments on OPEC confuse the distinction that I made between private and governmental cartels.Finally, the economic welfare model that Scherer embraces so enthusiastically at the start of his review cannot be so suddenly discarded when I show something inconvenient: namely, that the “dominant firms” in the classic antitrust cases did not reduce market output and did not raise market prices. Scherer has not come to grips with my central thesis that antitrust regulation has generally been employed to restrain the competitive market process. (shrink)

SUBJECTIVISM, INTELLIGIBILITY AND ECONOMIC UNDERSTANDING: ESSAYS IN HONOR OF LUDWIG M. LACHMANN ON HIS EIGHTIETH BIRTHDAY Edited by Israel M. Kirzner New York: New York University Press, 1986. 319 pp., $35.00.

THE ECONOMICS OF TIME AND IGNORANCE by Gerald P. O'Driscoll, Jr. and Mario J. Rizzo New York: Basil Blackwell, 1985. 261pp., $34.95 O'Driscoll and Rizzo, two leading exponents of the Austrian subjectivist school of economics, claim to provide an original and powerful challenge to mainstream neoclassical economics. They also argue that there is much common ground between the Austrian approach and the recent development of Post Keynesian analysis. In this essay, the validity of such claims is analyzed, and the shortcomings (...) of the Austrian school's approach vis?à?vis Post Keynesian and neoclassical analysis is developed. (shrink)

SECRETS OF THE TEMPLE : HOW THE FEDERAL RESERVE RUNS THE COUNTRY by William Greider New York: Simon and Schuster, 1987. 798 pp., $24.95 Greider pursues the theme that the Federal Reserve System promotes the interests of Wall Street?banks and bondholders?over those of Main Street?the rest of society. The wealth of fascinating observations he makes are, unfortunately, organized by a 1950s?style Keynesianism and a faith in unlimited, majoritarian democracy. Neither of these beliefs are at all adequate for remedying the deficiencies (...) of political control of the money supply, which is the real problem Greider has uncovered. (shrink)

Dominick T. Armentano 's book, Antitrust and Monopoly: Anatomy of a Policy Failure, 2nd ed., has serious limitations as a scholarly work. Monopolistic price?raising is even more objectionable under plausible interpretations of Armentano 's subjectivist criterion than in the standard case, which assumes equal subjective value for all consumers? dollar expenditures. Armentano 's historical review of leading antitrust cases is also faulty. His evidence on the alleged failure of price?fixing schemes is defective, and his approach to judging whether monopoly power (...) existed proceeds from an inappropriately static theory. (shrink)