RANDALL G. HOLCOMBE has provided an excellent service to the economics profession with his Advanced Introduction to the Austrian School of Economics. As the title suggests, the book is an introduction to Austrian economics, but not for economic beginners. Its target audience are readers with at least an intermediate familiarity with neoclassical mainstream economic analysis and who have had little to no exposure to the Austrian framework.
This is a very impressive effort indeed. The book features a tremendous coverage of ideas and concepts in a small number of pages, yet avoids superficiality. Holcombe does not waste words, but his discussion is always substantive and includes helpful illustrations of his points. He excellently compares and contrasts neoclassical and Austrian understandings of what firms and markets do. In doing so, he deftly distinguishes between the neoclassical view of the firm and business activity and the more realistic Austrian entrepreneurial firm. Additionally, while appreciating public choice analysis of government policy, Holcombe directs the reader to the more complete Austrian critique of socialism and interventionism that emphasizes the importance of economic calculation. All along the way, he draws not only on seminal works from the history of thought, but on recent literature...
While I have never been overly satisfied with the phrase “market process” as a moniker to distinguish the Austrian framework from the mainstream, in this book Holcombe makes better use of the term than anyone I have read. However, it struck me that what Holcombe describes as the market process approach is essentially a set of characteristics of economic activity in the real economic society of human action. Note how the various characteristics of the economy distinguishing the market process approach are all implications of a causal-realist understanding of human action. What Holcombe is arguing for is essentially a causal-realist approach to economic analysis. Therefore, it would have been helpful for him to begin with a brief introduction regarding the nature of human action and its implications, and then proceeded to a discussion of the market process approach to economics. Nevertheless, this is a relatively minor quibble with this potentially very helpful work. I say “potentially” helpful because for the book to achieve all the good it can, it must find its way into the hands of inquiring economists schooled in ways of the neoclassical mainstream. Let us hope this occurs early and often.
