The Review of Austrian Economics, 17:1, 115–133, 2004.
2004 Kluwer Academic Publishers. Manufactured in The Netherlands.
The Infusion of Relational Market Obligations into
the Austrian Agenda—Some Lessons Learned from
Stockholm School of Economics, PO Box 6501, SE-113 83 Stockholm, Sweden
Abstract. Given its dictum of market equilibrium, economics in general obviously does poorly in shouldering
market dynamics. Pervading obligatory traits of the market (other than mere dyadic contracting) is yet another area
where not much attention is devoted. Whereas the Austrian agenda ﬁlls the ﬁrst of these voids in a most sophisticated
manner, its current discourse appears as oblivious concerning the manner in which market exchange transforms
into relational interconnected obligations. That is to say, exchange is hardly understood as an indispensable
facet of durable market obligations such as relationships ‘constituting the market’, but exclusively as immediate
entrepreneurial arbitrage. Apart from an outright peculiar failure to recognize some of its own roots in this regard
this omission unnecessarily delimits the manner in which Austrians can proceed and deepen their market analysis.
The principal idea of this paper is to scrutinize the manner in which relational market obligations can be introduced
into Austrian reasoning by drawing on ideas from within economic sociology. Max Weber’s dictum on market
openness takes on a particular role in this regard. An adjacent contribution strived for is to let this scrutiny
foreshadow the manner in which such a partial reconciliation of market ideas from within economic sociology
and Austrian economics could proceed.
KeyWords: relational market obligations, economic sociology, embeddedness, entrepreneurship
JEL classiﬁcation: A12, B53, L14
Imagine a tiny neighborhood and its citizens’ demand for milk which, it is assumed, can only
be bought within the boundaries of that particular neighborhood. To saturate the demand for
milk consumers could turn to either of two stores, one of which is a since-long traditional
provider whereas the other newly opened store sells milk in a manner not heard of before.
Discount schemes for the purchase of milk over a certain period of time period combined
with a supply guarantee of different milk qualities embody the novelty thus discerned
by consumers. Assume further that this second store does well during its ﬁrst few days
of operations. After all (some) people (at least) are curious on what is new. But then,
everything else aside, milk demand there suddenly and relentlessly drops. People stick
to what they have got in the ﬁrst place and go on to buy their milk where they ‘always’
This paper reﬂects the author’s PhD project appearing as Liljenberg (2001) Customer-Geared Competition:
A Socio-Austrian Explanation of Tertius Gaudens. Stockholm: The Economic Research Institute. The author is
grateful for comments received by two anonymous reviewers.