Value and Exchange

In response to Block and Barnett (2012), this paper clarifies some misunderstandings about the concept of transitivity and shows its relation to rationality, asynchronicity of choice

The circular-flow approach is decidedly Neoclassical, and suffers from many problems which traditional Austrians would notice. The circular-flow diagram’s greatest problem is, in fact, its circularity. 

There are two Coase theorems. The simplistic one deals with the unrealistic world of zero transactions costs. The more important one addresses itself to the real world, where transactions costs are positive, 

Hoppe's response to Block’s foregoing criticism of his previously published notes on the subject of preference and indifference in economic analysis, including a summary of agreements and reconstruction of differences.

This short note is a contribution to the solution of the problem of indifference in Austrian economics (“Nozick’s problem”). The problem is divided into two questions:

The times are past in which one could naively teach the cost theory without getting involved in more precise explanations concerning in particular the origin of the value of the cost goods

Mises created an artificial construct, the evenly rotating economy (ERE), from which to ascertain the source of entrepreneurial profit and loss. In particular, the ERE is characterized by two distinct elements. 

The law of association as espoused by David Ricardo and generalized by Ludwig von Mises cannot directly convey what is at stake in exchanges involving specialization in uncertainty bearing. 

Nonetheless, Rothbard and Mises have been criticized by Nozick (1977) and Caplan (1999), for inconsistency in admitting the concept of indifference into economic analysis after all, even if only indirectly. 

To analyze the feasibility of applying the Coase Theorem, this article uses two traditional arguments, economic calculation and non-neutral effects, found in the Austrian literature.