Austrian School vs American Institutional School

 Slice 1: Austrian School (Ludwig von Mises, Friedrich Hayek)

Core idea: The market is a self-regulating system where the state should intervene minimally, providing only the legal framework.
In the logic of the “weak state,” the problem is that:
Property rights are neither verified nor protected — privatization is based on undervalued assets, there is no transparent cadastre, no independent courts.
Information failure: Investors (including foreign ones) do not trust the assets because the “rules of the game” change constantly.
Effect of surrendering position: When the state does not compete as an economic actor (even in strategic sectors), it leaves them to private players, who may be affiliated with external powers.
Result: Private players integrated into global verticals (energy, logistics, raw materials) become tools of pressure on the state itself, up to and including war.

Slice 2: American Institutional School (Douglass North, Oliver Williamson)
Core idea: A sustainable market is impossible without strong institutions (justice, independent arbitration, antitrust regulation).
In the logic of the “weak state,” the problem is that:
The state does not create a competitive environment — privatization is carried out without checking for monopolistic concentration of capital.
Institutional vacuum: Instead of a system of checks and balances, an oligarchic vertical emerges.
Dependence on stronger external players: Without its own production chains, the state becomes an “assembly workshop” for foreign corporations or a battleground for their competition.
Result: An association of domestic private owners, deprived of protection and regulation, loses to a vertically integrated foreign state or corporation → leading to either economic occupation or war.
Joint conclusion of both schools If agglomeration capital (land, real estate, infrastructure, natural resources) is not verified and embedded in a transparent, competitive system:
From the Austrian perspective — the market cannot self-balance due to monopoly distortions and information asymmetry.
From the American perspective — the market will simply collapse because there are no institutional “interceptors” to block unfair players.