Collection of Austrian research papers

Markets, Information and Communication: Austrian Perspectives on the Internet Economy edited by Jack Birner and Pierre Garrouste, published byRoutledge, 2004, in the Foundations of the Market Economy series, edited by Mario J Rizzo and Lawrence H White. Hardback, 320 pp, index.

This is the edited proceedings of the third annual conference of the Association des Historians de la Tradition Economique Autrichienne, held in May 2001 in the Tuscan cities of Pisa and Lucca.The book is dedicated to the late Don Lavoi who wrote the keynote paper but did not live to deliver it.The Austrians have been accused of spending too much effort on philosophy and methodology and not enough on research and applied development ofAustrian theory. This collection looks like a telling rejoinder to that criticism.

This sounds like the conference of dreams. Thanks to Raimundo Cubeddu of the Uni of Pisa the accommodation was the Royal Victoria Hotel, favoured holiday address of many European Royal Families. Locations for the sessions included the spectacular town hall of the ancient fortified city of Lucca. Meals were taken at a series of carefully chosen restaurants. Adverse comparisons with the Popper conference in Vienna spring to mind. This was the first conference of the Association to be held outside France and I am advised that the association is now defunct so there is not likely to be another conference in the near future.

Contents: Part I Digitally connected networks.
1. Don Lavoie. 'Subjectivism, entrepreneurship and the convergence of groupware and hypertext'. 2. Giampaolo Garzarelli. 'Open source software and the economics of organisation'. 3. Mark S Miller and Marc Stiegler. 'The digital path: smart contacts with the Third World'.

Part II Some history.
4. Don Lavoie, Howard Baetjer and William Tulloh 'High-tech Hayekians' with comments by Marc Steigler and Pietro terna.5. Elise Tosi and Eominique Torre. 'The new economy as a co-ordinating device: Some Mengerian foundations'.

Part III The organization of the firm.
6. Nicolai J Foss. '"Austrian" determinants of economic organization in the knowledge economy'. 7. Philippe Dulbecco and Pierre Garrouste. 'The new economy and the Austrian theory of the firm'.

Part IV Networks and communication.
8. Guido Fioretti. 'The small world of business relationships'.

Part V Markets and market failure.
9. Richard Arena and Agnes Festre. 'Some specific Austrian insights into markets and the "new economy"'.10. Mark Steckbeck and Peter Boettke. 'Turning lemons onto lemonade: entreprenneurial solutions to adverse selection problems in e-commerce'.11. Roger Koppl and Ivo Sarjanovic. 'Big players in the 'new economy''.

Part VI The monetary sector in the Internet.
12. Anthony P Mueller. 'Bubble or new era? Monetary aspects of the new economy. 13. Jean-Pierra Centi and Gilbert Bougi. Possible economic consequences of electronic money'.

Part VII The legal framework.
14. Elisabeth Krecke. 'The emergence of private lawmaking on the Internet:implications for the economic analysis of law'.

This is billed as a notice rather than a critical review because the bredth and depth of the proceedings places them well beyond my capacity to fully comprehend, let alone advance useful criticism. The conference was held at a time when the dot.com bubble was beginning to burst, however the editors note that the papers are as relevant as the daythey were delivered and it is apparent that we are only paddling in shallows of what will become the ocean of the Internet economy.

A few comments: I am not convinced that Don Lavoie's "hermeneutic turn"adds value to a more prosaic or traditional analysis of the benefits that flow from advanced means of communication. Stedbeck and Boettke criticise the view that markets are doomed to fail on account of sellers having more information about their product than buyers, the paradigm case being "lemons" - defective used cars. The argument from used cars is rather weak because there are any number of ways of getting additional information, ranging from taking along a friend who knows about those things to hiring an agency to do a test. Besides, prudent people buying a used car will buy cheaper than they initially budgeted and mentally consign the difference to a "maintenance and repairs" fund. Austrians have been criticised for failing to do empirical work and turningtheir backs on mathematics. I have not been able to understand what holds them/us back in these areas apart from shortage of personnel (just providedthat the research and the use of maths make sense). Roger Koppl and IvoSarjanovic have apparently demonstrated how to do empirical work with somewhat sophisticated analysis of the data in a way that does make sense, though one would like to see a critical appraisal by someone who is on top of the issues and the methodology. Assuming that it does stand up to criticism, one hopes that lot more of this kind of work is in the pipeline.

The book is very well and attractively produced as a physical artefact and I trust that the rise of web-based communication does not undermine the ancient and honourable crafts that are involved in book production. Judging from the experience of the Mises Inst in putting whole books on line, this actually stimulates sales, not surprisingly, who wants to accumulate hundreds of pages of unbound A4 to maintain a reference library of important texts?