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Spring 2008

ISSN 0890-913X

Volume 23, Number 2

Categories: Spring 2008 | Liberalism

Monetary Calculation and the Extension of Social Cooperation into Anonymity

Steven Horwitz, St. Lawrence University

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TheJournalofPrivateEnterprise23(2),2008,81-93MonetaryCalculationandtheExtensionofSocialCooperationintoAnonymityStevenHorwitz*St.LawrenceUniversityAbstractBotheconomistsandevolutionarypsychologistshaveaddressedrecentlythequestionofhowhumanscometotrustanonymousothers.However,theideaofmonetarycalculation,asarticulatedbyLudwigvonMisesandotherAustrianschooleconomists,ismissingfromtheiraccounts.Gametheoryandevolutionarypsychologymighttelluswhywetradeatallwithanonymousothers,butmonetarycalculationisneededtoexplainhowwedecidewhichtradestomake.Whenactorscanknowwhichtradesaremorelikelytobemutuallybeneficial,anonymoustradeismorelikelytooccurandisbetterabletoextendsocialcooperation.I.IntroductionThoughwrittenalmosttwohundredyearsapart,AdamSmith'sTheVealthofNations(1976[1776])andLudwigvonMises'HumanAction(1966[1949])arearguablytwoofthemostimportantworksineconomics.Bothaddressverysimilarthemes.Asidefromtheirrolesintheforwardingofclassicalliberalism,theyalsorepresentmajorstepsforwardinourtheoreticalunderstandingoftheoperationofthemarket.Onecommonthemethatpervadesbothbooksistheiremphasisontherolemarketsplayinfosteringwhatwemightcall"socialcooperation."Atitsmostbasiclevel,AdamSmith'sdiscussionoftheinvisiblehand,andthewaysinwhichself-interestgeneratesbeneficialunintendedconsequences,demonstrateshowmarketinteractionsallowustocooperatewithoneanotherinmutuallybeneficialways,evenifthatcooperationis,asnoted,unintended.ThissameideaisdevelopedmuchfurtherbyMises,particularlyinhisdiscussionofwhathecalls"Ricardo'sLawof*Anearlierversionofthispaperwaspresentedatthe2003conferenceoftheAssociationforPrivateEnterpriseEducationinLasVegas,NV.Theauthorwouldliketothankthreerefereesandtheeditorfortheirhelpfulcomments.81

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Metadata [hide]

Title	Monetary Calculation and the Extension of Social Cooperation into Anonymity
Authors/Creators:	Steven Horwitz, St. Lawrence University
Year:	2008
Volume:	23
Number:	2
Pages:	81 - 93
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Trade, Austrian Economics, Trust, Evolutionary psychology, Ludwig von Mises, Economic cooperation

Citation:
Horwitz, Steven / 2008. "Monetary Calculation and the Extension of Social Cooperation into Anonymity." The Journal of Private Enterprise, 23(2): 81-93.