Mutual influence of institutions in the concept of Carl Menger

TERRA ECONOMICUS, , Vol. 20 (no. 1),

The article analyzes the mutual influence of institutions in the concept of Сarl Menger, the founder of the Austrian school of economics. Within the framework of his theory, institutions are organic orders, the emergence and evolution of which do not depend on the will and consciousness of individuals, but which are the result of unintentional human actions. The institutions of entrepreneurship and money, through mutual support and improvement, mitigate the negative impact of uncertainty on the economic system. The very origin of money is the result of entrepreneurship in the broad sense of the word (as an activity to find ways to improve one’s statement). Entrepreneurship is inconceivable without money prices, which provide the possibility of economic calculation. In addition, the monetary form allows the capital to develop intensively. The existence of system of relative prices and capital market shape a market order. The monetary system experienced both positive and negative influence of the state, and the development of entrepreneurship as such, as well as banking in particular, contributes to the optimization of the amount of money required, in accordance with the needs of the national economy.
Citation: Kavaliou A., Peniaz O. (2022). Mutual influence of institutions in the concept of Carl Menger. Terra Economicus 20(1): 27–37. DOI: 10.18522/2073-6606-2022-20-1-27-37

Keywords: Carl Menger; institutions; money; entrepreneurship; market; economic calculation

JEL codes: B25, B41

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606