Efficiency and Externalities in an Open-Ended Universe

The problem of externalities and efficiency is cited relentlessly in mainstream literature as the great rationale for government intervention. The Austrian tradition, however, takes another approach, viewing these supposed problems as having market solutions that depend on a view of economics rooted in an understanding of the competitive process.

In this important book, Cordato elucidates the Austrian view and expands it. He relies strongly on the work of Rothbard and Kirzner to address the modern arguments, showing that there is no standard by which we can judge efficiency apart from the market standard, and no way to adjudicate property rights apart from exchange relationships.

In many ways, this is an important contribution to the Austrian literature, the most thorough and extensive study on a topic that has become a blank check for government to run roughshod over market institutions.

No serious student of the market process can afford not to absorb its analytics and lessons.

162 pages, paperback 2007