“Modern-day Austrian economists such as O’Driscoll and Rizzo believe in an economic world where there is an immutable external reality similar to the way nineteenth-century physicists viewed the working of the physical world. In their emphasis on uncertainty, however, Austrians often differ from mainstream Old and New Classical theorists. Many Austrians believe that the external reality may be predetermined by Mother Nature but this reality is too complicated for any single human being ever to process the information being sent out by market signals. The free market is the Austrians’ deus ex machine that provides the (in principle calculable) relevant probabilities and prediction to coordinate the plans and outcomes via a Darwinian process in a would of epistemological uncertainty and a programmed external reality” (Davidson 2002: 63).The Austrians adhere to the concept of epistemological uncertainty, whereas Post Keynesian economics stresses the notion of ontological uncertainty (Barkley Rosser 2010: 171). This is an important difference and I will have more to say about it in the future.
Barkley Rosser, J. 2010. “How Complex are the Austrians?,” in R. Koppl, S. Horwitz, and P. Desrochers (eds), What is so Austrian about Austrian Economics? (Advances in Austrian Economics, Volume 14), Emerald Group Publishing Limited, Bingley, UK. 165–179
Davidson, P. 2002, Financial Markets, Money, and the Real World, Edward Elgar, Cheltenham, UK.