Monetary Calculation and the Extension of Social Cooperation Into Anonymity

The question of how humans come to trust anonymous others has been addressed by both economists and evolutionary psychologists recently. However, the idea of monetary calculation, as articulated by Ludwig von Mises and other Austrian school economists, is missing from their accounts. Game theory and evolutionary psychology might tell us why we trade at all with anonymous others, but monetary calculation is needed to explain how we decide which trades to make. When actors can know which trades are more likely to be mutually beneficial, anonymous trade is more likely to occur and is better able to extend social cooperation.

Steve Horwitz
Publisher: The Association of Private Enterprise Education
Published in: The Journal of Private Enterprise
2007 23(2) Pages 81-93