My chum David Emanuel Andersson has just had this edited collection published. Here is an excerpt from his intro:
In what is perhaps the best-known article in the history of the Austrian school, Friedrich Hayek (1945) asserts that market prices distill and thus reflect the unique local knowledge of a multitude of individuals, each of whom resides and works in a particular place. Because only an autonomously acting individual can take advantage of her unique creativity, skills, and personal connections to others, centralization of economic decisionmaking guarantees that much useful local knowledge is irretrievably lost. It is impossible to communicate the totality of all local entrepreneurial ideas and tacit knowledge to a small group of top-down planners; their cognitive limitations guarantee substandard economic performance (Hayek, 1952). We should therefore not be surprised that it is valuable to possess ‘‘knowledge of people, of local conditions, and special circumstances’’ (Hayek, 1945, p. 522). Given the great number of citations to Hayek (1945) in the general economics literature, it would require no great stretch of the imagination to imagine that Hayek – and by extension the Austrian school – had set in motion a way of theorizing about economic phenomena that later gave rise to theories about knowledge spillovers, urbanization economies, and local social networks. But this was not to be. There are virtually no references to Hayek or any other Austrian economist in the spatial economics literature prior to the year 2000. The lack of interest in Austrian economics among spatial economists was reciprocated by a similar lack of interest in spatial economics among self-professed Austrians. To my knowledge, Pierre Desrochers (1998) wrote the first explicitly Austrian contribution that deals exclusively with spatial economic phenomena. In spite of this historical disconnect, Austrian ideas have entered the spatial economics, economic geography, and urban planning literatures because of the close parallels between the influential ideas of the urbanist Jane Jacobs and Austrian market process theory. While Jacobs (1961) does not refer to Hayek or any other Austrian, her Death and Life of Great American Cities at times reads like an Austrian theory of urban planning: [N]obody, including the planning commission, is capable of comprehending places within the city other than in either generalized or fragmented fashion. They do not even have the means of gathering and comprehending the intimate, many-sided information required, partly because of their own unsuitable structural inadequacies in other departments. Here is an interesting thing about coordination both of information and of action in cities, and it is the crux of the matter: The principal coordination needed comes down to coordination among different services within localized places. This is at once the most difficult kind of coordination, and the most necessary. (Jacobs, 1961, quoted in Ikeda, 2006, p. 22) With her emphases on (implicit) methodological individualism, the importance of local knowledge, and complex evolving orders, Jacobs provides a rich source of insights for those who wish to combine Austrian economic theory with a dynamic approach to agglomeration economies. Such a dynamic approach focuses on entrepreneurial processes rather than on idealized equilibrium states. Unsurprisingly, both Hayek and Jacobs figure prominently in this volume. But they are far from the only influences. This book is a collection of 13 essays that address spatial aspects of the market process from refreshingly diverse approaches. They range from the extension of Austrian theory to spatial phenomena over hybrid combinations of ideas from distinct traditions to state-of-the-art spatial models that integrate Austrian concepts such as ‘‘roundaboutness’’ or entrepreneurial innovation.