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What a great post. This lets me know just how much more I have to learn --- from this list I am familiar only with the work of Shackle, Medema, and Burczak. These 'heterodox' thinkers have been very influential on my thinking:

1. Thorstein Veblen's The Theory of the Leisure Class (And Frank Knights collection of essays 'Ethics of Competition) made extremely important contributions to our understanding of the nature of want satisfaction.

2. Hyman Minsky, who made it his personal mission to make what seems to be the anomalous --business cycles -- the ordinary.

3. Greg Hill, who I discovered through Jeffrey Friedman and his excellent journal "Critical Review". Greg Hill has done more than any other writer to challenge the Austrians on their own ground.

4. Paul Davidson, whose influential contributions to monetary theory have led me to question the tenability of monetarism and the role of money in a capitalist economy. His interest in uncertainty within the post-Keynesian literature has also done much to revive interest in the work of Shackle.

Its pretty early in my career, so I don't have a long list (I will be following up on some of yours), but my short list includes:

1. Marx, Marxists such as Bukharin etc of that period, Marxists of later periods such as Ota Sik, etc. Sovietologists of the socialist-leaning type could be added here.

2. Socialists from the West such as Lange and Taylor, Joan Robinson, and that crowd (the anti-Mises crowd). And also the new market socialist crowd, like Yunker and Roemer.

3. Those guys, like Matt Forstater from the Full Employment Center and others who challenge my ideas on dynamic modeling and employment; this crowd also includes my dad Ed Nell.

4. Guys like Lane Kenworthy and many of the contributors to the LIS working paper series (i.e. people who use that database) who challenge me on my ideas about income growth, distribution and mobility.

5. I am now finally reading Keynes and expect him to be a major figure in this, along with Post Keynesians like my dad and people like Barkeley Rosser who combine the complexity approach with the more Post Keynesian assumptions.

That's all I can think of right now, though I think I am missing some.

Wittman, Stigler, Dee, Thaler, Kahneman, Stiglitz, Krugman, Oster, Veblen, Ricardo, Lange, Barbon (I'm just beginning to get into Barbon thanks to a colleague at WCU), and maybe most importantly, Rawls.

Very interesting Matthew, but I think you might be missing something in my post. The question was thinkers who you disagree with, do you still learn from? If thinkers such as Minsky and Hill have persuaded you, then you would not still disagree with them but instead adopt their position.

My first serious academic study was a paper on Veblen and the Austrians --- the first draft of the paper was in the summer of 1984 prior my first full-year of graduate school at GMU. During the process of writing that paper, I was encouraged by Don Lavoie to send the paper to Warren Samuels. Up to that point, I think it is accurate to say that up to that point in my life learning from someone meant agreeing with someone. Warren changed all of that for me. There was someone who was absolutely brilliant, had great personal and professional integrity, yet he disagreed with me at the most fundamental level.

So it is important I think for intellectual growth and development when young scholars make that transition from learning by coming to agreement, and learning by critical engagement, identification of weaknesses in both sides of the argument, and finding ways to repair the holes in yours. This is why it is about intellectual intercourse, not mental masturbation.

As I tell our students here at GMU there is a literature on everything, and something wrong with every literature. Their goal should be to find the holes, repair the holes, and be prepared to ask at least two fundamental questions: (1) so what?, and (2) how big is big? You will see a common thread in the empirical work that was questioned yesterday --- there is a focus on problems in a literature, an alternative mechanism is proposed, and then that mechanism is illuminated via historical case, and then broader implications are drawn. We focus on small problems that have BIG implications, rather than big problems that have SMALL implications.

To go back to your specific cases Matthew, why don't you talk to folks that have engaged in intellectual discourse with these folks from the Austrian side? For example, why not seek out Mario Rizzo and discuss with the merits of Shackle and Davidson, and the difference between a Lachmann reading of Shackle and a Davidson one, and which one ultimately was more faithful to Shackle. Or how about examining the differences between the early Veblen (who was influenced by evolutionary theory such as Sumner) and the later Veblen (who was influenced by behaviorism). And on Minsky --- in what sense is his explanation of market instability superior to Hayek's?

And finaly on Greg Hill --- there have been more often than not two sides to those debates. Garrision, Horwitz, etc. I am not persuaded that Hill is as effective as you are suggesting at taking the Austrian argument on, on its own terms. Lets discuss this. Pose the question to Steve Horwitz about that, I am sure he will have plenty to say on the topic.

Matt has indicated to me that he's not persuaded by my replies to Hill, which is fine. I'd encourage him to write up what he think I got wrong and send it somewhere, either CR or the RAE.

And, Pete, this paragraph goes in my "the metaphor is totally right, but don't use this in class" file. :)

"So it is important I think for intellectual growth and development when young scholars make that transition from learning by coming to agreement, and learning by critical engagement, identification of weaknesses in both sides of the argument, and finding ways to repair the holes in yours. This is why it is about intellectual intercourse, not mental masturbation."

1. Karl Marx on his disbelief in the co-ordinating and manumitting properties of money.
2. Hans Hermann Hoppe on the rejection of mathematics, empirical research, and hermenuetics.
3. Ludwig von Mises on the strict separation of theory and history.
4. David Gordon on Marxism not being scientific. That is, using Popperian "falsification" as the criterion of science.
5. Juergen Habermas on the radical democratic rule of law.
6. Thorstein Veblen on a society run by engineers.
7. Max Weber grossly underestimated the range of "economically conditioned phenomena" (which I believe has led American sociologists to eschew economics).
8. The contemporary Austrian school for their dearth of emphasis on the scholarship of Wilhelm Roepke.

9. Mark Granovetter for his near absent focus on the emergence of networks.

I'd be interested to hear the resident profs' opinions on the Sraffan re-switching critique of Austrian capital theory. To me, it sounds like something that is correct, but probably not all that significant in practice.


My opinion (as flawed as it may be) is that reswitching critique does not impact the Austrian conception of a capital-using economy with the same force that it may impact the neoclassical presentation of captial. On this I would just reference responses by Kirzner and Garrison, and also point to Robert Murphy's short discussion of this online.

Many heterodox criticisms of Austrian ideas take this form --- a criticism directed at neoclassicism which has some force, but then they claim by implications that the Austrians must be arguing the same thing because the Austrians share a presumption toward free markets as they perceived neoclassical do as well.

One could write an entire book on the various 20th century debates in economics which took this form and as a result the parties failed to actually engage one anothers positions.


For those of you who haven't heard of this stupendous wonderful journal, Critical Review, which I edit: In its pages, years ago, Paul Davidson reviewed the Rizzo and O'Driscoll book (although I'm afraid that was a low point in our 20-year history); and Steve Horwitz went many fascinating rounds with Greg Hill on Keynesianism--that was a high point.

Please see criticalreview.com to subscribe, and write to me at critrev@gmail.com to find out about getting back issues.

We've arranged with Routledge to institute a student subscription rate of $30. Please contact me at critrev@gmail.com if you'd like to take advantage of this--it's not up on the Routledge site yet.


P.S. Brian Pitt--can you send me contact info at critrev@gmail.com?


"Paul Davidson reviewed the Rizzo and O'Driscoll book (although I'm afraid that was a low point in our 20-year history);"

I agree. I was part of that debate.

In my opinion, the Austrian school suffered four major blows to the intellectual advancement of the school during the post 1974 period.

First, Murray Rothbard never received an appointment in a PhD granting institution early in his career that would have enabled him to produce PhD students and serve as an intellectual leader of the Austrian school among his economic peers in the research community of professional economists. It is true that Rothbard was a leader, but an academic sociological point is important here ... name any field in the social sciences where the leading scholar in the field is not teaching at a PhD granting institution. For good or bad, credentialism matters in academia, and where you teach and who you teach matters. Rothbard was, in fact, a very dynamic personality. On the other hand, Israel Kirzner was (is) a profound and subtle thinker and an absolutely wonderful man full of personal integrity and a quiet charm. But he does not have the sort of bigger than life personality that Rothbard did, or Milton Friedman, or James Buchanan, or Paul Samuelson, etc.

Second, Gerald O'Driscoll after being denied tenure at NYU deciding to leave academia. O'Driscoll is a first-rate mind and while what he has written since leaving academia is always insightful and we learn from it, he has the skill set to continually pressure the mainstream journals to consider Austrian ideas. Also if O'Driscoll would have been tenured at NYU, the foothold at a top 20 department for Austrian economics would have been secured for another generation.

Third, the untimely death of Don Lavoie meant that a bold and original thinker who pushed Austrian ideas into new areas was lost. Don's loss was not only a personal tragedy to his family and those of us who were his students, but for the community of Austrian economics and classical liberalism a great teacher and scholar was gone so that generation starting with Pete Leeson and Chris Coyne would not even get exposed to Lavoie's unique teaching and research skills and interests.

Fourth, the decision by two of the smartest people in the modern Austrian school to cut back on their self-identified Austrian research in the field. When I first met George Selgin he was a force of nature. I still think George is smarter than the average bear, but he doesn't have the sweep of interest that he once did. The second intellectual force of nature in the Austrian community was (is) David Prychitko. Prychitko is in my opinion the most penetrating mind I have dealt with consistently in the Austrian community of my generation. He is a mind on par with Kirzner and Rizzo, but Dave's focus was always on critique rather than construction. While George has kept writing, but narrowed his research focus to fine points in monetary theory and history; Dave made the decision to stop writing. I always thought Dave could write our generations Epistemics and Economics type work --- perhaps he stil will. I expected from Selgin a grand treatise on par with Human Action or Man, Economy and State. Our community misses significantly minds such as Selgin and Prychitko working on Ausrian economics full time. I would say that about Tyler Cowen as well though Tyler was already well on his current path by the time he and I got to know each other. Still the loss of such brilliant minds as Selgin, Prychitko and Cowen to a small research community is significant and should not be overlooked in explaining difficulties of advancing Austrian ideas within the upper eschelon of scholarship in the social and policy sciences.

So I certainly wouldn't point to Davidson's review of The Economics of Time and Ignorance as a low point, there have been much lower points. But I would say it reflected a moment of clarity on the problems with the post-Keyensian/Austrian dialogue. Davidson was completely incapable of engaging in a productive exchange of ideas. On the other hand, others such as Jochen Runde certainly aspired to a much higher level of discourse.

Critical Review is a GREAT social science journal, but lets remember that the Austrian school is a school of ECONOMICS so the focus has to be on publication in economics journals and engaging other economists in debate and discourse. Interdisciplinary work has its important role to play, as does philosophy, but if the goal is to have an impact it will be thru economics and political economy.

1. Kevin Carson

2. Jeffrey Friedman

3. John Hasnas ("The Myth of the Rule of Law")

Ooh, ooh, one more: Paul Piccone.

Sorry if this hijacks the thread, but among the living Austrian economists, who would you say have had the most impact on the mainstream of the discipline? And has their influence been due to uniquely Austrian insights or could their most influential work have been done by a non-Austrian?

When it comes to the Cambridge Capital Controversy, Blaug and Garrison's comments contain technical errors. Robert Murphy's on-line comments are insubstantial. I'm not sure what Kirzner has had to say about it. Austrians usually mention Yeager in this context, and Yeager's technical errors and vaugeness also shows he does not understand price theory.

This is not an apposite response to demonstrations that one is asserting "2 + 2 = 3":

"Many heterodox criticisms of Austrian ideas take this form --- a criticism directed at neoclassicism which has some force, but then they claim by implications that the Austrians must be arguing the same thing because the Austrians share a presumption toward free markets as they perceived neoclassical do as well."

You can see more about the flawed opinions of the Austrians at my blog and my SSRN papers linked to from there.


Could you provide us a link? Although I must admit that anyone who asserts Yeager doesn't understand price theory immediately raises my skeptic's antenna.


The point is that the pure time preference theory of interest does not suffer from the same problems that a marginal productivity theory of interest.

A thoroughgoing subjectivism does not have the same problems that a more mechanical understanding of the relationship between capital and interest does; just as a more openended understanding of rational choice isn't as vulnerable to the behavioral critiques as a tight theory of rational choice.

This is not hand waiving, but it is a simple point about the consequences of seeing all economic phenomena as being filtered through the human mind.

As far as I know (I am willing to be corercted) the best discussions of the Sraffa vs. Hayek debate would be the work of Ludwig Lachmann ("Austrian Economics Under Fire"); Gary Mongiovi ("Keynes, Hayek and Sraffa"); and Avi Cohen.

Kirzner and Garrison try to put these discussions in proper context.

The criticisms are equilibrium criticisms and objective cost criticisms directed at a view of capital that is homogenous, not critiisms that related to heterogeneous capital goods with multi-specific uses within the capital structure. In this sense, the parties are talking past each other. In the Cambridge versus Cambrdige UK debate, one can easily side with Cambridge UK against Cambridge US, while also seeing Vienna as a way out of the difficulties.

In this regard, Austrian economics offers a unique intellectual position in the economics debate --- a set of arguments that begin within the heterodox problem situation but see how various alternative institutional arrangements provide disciplinary filters and exhibit (or disturb) a systemic tendency toward plan coordination and economic order.

To explain what I meant before by the way debates took place is this --- Stiglitz critiques Lucas, but then asserts it defeats Hayek; Lange and Lerner employ the model of perfect competition to develop a "workable" model of market socialism, and in the process believe they have provided an answer to Hayek's argument about the dynamic market process and the knowledge problems that socialism would need to confront.


Excellent question --- perhaps it should be a full post to debate rather than burried in the comments.


Maybe this is browser dependent. As I understand it, my name in the comment above or below links to my blog. By the way, in the comments section of the Fall 2003 issue of the JEP, Cohen and Harcourt assert, "Leland Yeager (1976) ... misunderstood the issues and did not make a meaningful contribution to the debate."

I find Peter Boettke's comments question-begging and misdirected. I did not assert any Austrian theory has the same problems as some neoclassical theory. I usually stick to following the (lack of) logic of an argument at a low level.

Also, I was talking about the Cambridge Capital Controversy, not Sraffa's and Hayek's quarrel in the 1930s. As I understand it, Sraffa deliberately put aside the capital-theory issues investigated in his later book. One question that arises in interpreting Sraffa and Hayek is whether they were speaking from the perspectives of their respective research programs which only became more developed later. I find the Lachmann article Peter referenced a good argument for one side of the argument. I would point to a 2000 Kurz article for another. I wish I had access to that Mongiovi article. I don't recall Avi Cohen specifically on the 1930s, though I think I recall that I did once read him on that. Knight would be primary source material here too.

But to get back to the CCC - this is incorrect: "The [Cambridge, UK] criticisms are equilibrium criticisms and objective cost criticisms directed at a view of capital that is homogenous, not critisms that related to heterogeneous capital goods with multi-specific uses within the capital structure."

Both the Austrians and the Cambridge critics have wings that emphasize disequilibrium more and wings that emphasize disequilibrium less. There's a reason why Lachmann was not in my list of Austrians making technical errors - it wasn't because I hadn't read him.

In classic statements of Austrian Business Cycle theory (e.g., by Hayek, Rothbard, or Garrison), the underlying capital theory is about tendencies leading to (or away) from a supposed equilibrium - i.e., an Evenly Rotating Economy. And the substantial statements in the theory about EREs are proven logically invalid - the hypotheses don't yield the conclusions - by stepping through examples developed in the CCC. And the examples I have in mind have heterogeneous capital goods etc.

The Cambridge, UK, critics did not target only models with homogenous capital.


Isn't the case that the main parties to the CCC were Samuelson and Solow on the one side, and Robinson on the other? To what extent then is my characterization so wrong? Forklore has it that Robinson would ask Solow and others "what is on the axis", when they were talking about K and L combinations. NO? Solow once told me that he was the worlds leading expert on the 2 good world, and when I tried to raise an issue about capital heteroeneity he freaked out and said "I never did damage to reality" and accussed me of making a Joan Robinson cheap shot, when in fact I was trying to make a Hayek-Lachmann point.

I am sorry if you find my "argument" question begging, I honestly wasn't trying to do that. I would like to come to a mutual understanding. My point is a simple one, when we move from questions of marginal productivity theory of interest to a pure time preference theory and the movement away from capital investment and allocation to one of "plan coordination" and in particular intertemporal plan coordination, I think the terms of the debate switch.

Also, I think you are reading too much into the status of equilibrium properties and tendencies in Austrian economics. Equilibrium is a methodological starting point, but not the end point of the ABCT and it has an importance because if you want to explain unemployment and provide its cause, you cannot start in a world with unemployment --- same thing for discoordination.

I am sure I am missing something important, and perhaps blog posts are not the best way to find the right answer. But I would like to know how I am misdirecting the conversation --- I don't want to do that.

I guess Peter Boettke thinks of Joan Robinson as offering "equilibrium criticisms ... directed at a view of capital that is homogenous, not critiisms that relate to heterogeneous capital goods with multi-specific uses within the capital structure." If so, he is simply incorrect.

Asking for those drawing graphs to be clear on the units of measurement for each axis doesn't preclude one from also considering issues of disequilibrium and heterogeneous capital goods.

And I like how Joan Robinson has "cheap shots", while Hayek and Lachmann have "points".

I must have unclear on my use of the word "argument". I was not referring to Peter's comments, but, say, Hayek's Prices and Production or Garrison's recent book.

I guess I'm being self-centered to expect Peter to remember one particular paper he rejected. I once asked asked a bartender what was the most ridiculous pick-up line he had heard a customer use. He answered, "The ridiculous ones are not the ones I remember."

Anyways, I did rewrite the paper linked to by my name after receiving comments from the RAE reviewer. I have not made an even more recent rewrite publicly available. It's under review at some journal.

It was not Pete who used the phrase "Joan Robinson cheap shot." He was quoting Solow.

Jack Birner wrote a fairly recent book on the reswitching debate.

He also edited a collection of Austrian conference papers on the internet economy, just to show that Austrians can do proper research.

More on Jack Birner

Fabio Petri argues in his "General Equilibrium, Capital and Macroeconomics" that in heterogeneous capital settings it is impossible to endow equilibrium notions with any persistence. This is mainly a consequence of the dependence of equilibrium on the endowments of capital goods. But these endowments usually change much faster than the time frame needed to attain a given equilibrium, hence said equilibrium notion is deprived of any value.

I'll give a mathematical metaphor. Suppose a complex system which depends on lots of variables is said to converge, after a time T, to an equilibrium state E(a,b,c). If the variable "c" changes wildly in time periods much shorter than T, then the statement "the system tends to E(a,b,c)" is a nonsensical one, since the equilibrium point changes much faster than the period the system needs to converge to that point.

Petri also gives other criticisms of equilibrium in heterogeneous capital settings, but this is the most persuasive one.

If one assumes a given total capital entity as a datum, such problems with the notion of equilibrium disappear. Hence Petri argues that the Cambridge Capital Controversy points to much deeper issues than mere criticisms of overly simplified one capital models. Specifically, it leads to deep criticisms of equilibrium notions which have (heterogeneous) capital endowments as data on which the equilibrium depends.

However, Petri also criticizes Joan Robinson for he role in perpetuating the misunderstanding that the Cambridge Capital Controversies are mainly about simplified aggregate production functions.

For instance he says of her article that started the controversy ("The production function and the theory of capital"): "...the article was far from clear on the real issues at stake." (p.228)
"A neoclassical economist might have been excused for concluding that Joan Robinson [...] was only questioning [the neoclassical factor substitution mechanisms]'s simplified representation through an aggregate production function"(p.230)

"In subsequent years Joan Robinson was increasingly able to abandon neoclassical factor-substitution notions, but she developed a very defective view of the logic of the theory she absorbed when young, a view which perpetuated the misleading concentration on aggregate production functions as the target of criticism."
(p. 230)

"So, as her comment [...] to F.M. Fisher also makes clear, the aggregate-production-function versions _were_ the neoclassical theory of distribution, according to Joan Robinson." (p.231).

In conclusion, it may be excusable to believe that the Cambridge Capital Controversy was mainly about theories based on aggregate production functions. But the issues are much deeper, and those that read this post do not have an excuse anymore for not learning about them.


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