ABSTRACT
Subjectivism is a major feature of the Austrian tradition in two interrelated ways. Social phenomena are to be explained in terms of individual purposes or plans. The importance of subjectivity is even where individuals were more or less the same. Although much has been written about modern Austrian economics in the past five to seven years, relatively few economists understand the concerns, insights and importance of this once-forgotten school of economic thought. The focus of Austrian economics, as we have seen, is on the plans or actions of individuals rather than directly on social wholes or institutions. The importance of uncertainty in decision-making is obvious from causal observation. However, to the extent that we are concerned with processes, there is also an analytical need to introduce uncertainty into economic models. The limitations of equilibrium analysis and the need for a comprehensive theory of disequilibrium adjustment are made more evident when we understand the proper function of equilibrium constructs.
