April 2017

Sun Mon Tue Wed Thu Fri Sat
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
Blog powered by Typepad

« Some Slovakian Links | Main | Let's Talk About This »


Feed You can follow this conversation by subscribing to the comment feed for this post.

I would like to add to that list at the end Armen Alchian. His essays (and textbooks, though I have not read University Economics) are exceptionally clear in exposition and thought, and I would argue especially helpful for those not yet enmeshed in the economic way of thinking in getting there, especially his 1950 essay.

In the interest of not rocking the boat I won't add to the list :)

In a somewhat similar vein, at one point could you talk about the other end of the process - the job market for graduates of graduate school at departments that aren't top tier and perhaps a little idiosyncratic? I feel like the "academic job market" as we usually think of it is focused on the top tier experience, but that doesn't help a lot of students out much. I'm starting at American University's PhD program in the fall - so graduation is several years off - but it's one of those situations where I'd love to have an academic job but I'm not sure exactly what the real prospects of that are (not going academic could be fine too, particularly with the options in the DC area). I know that there are some departments American has sent students to (just like George Mason probably feeds certain Austrian-friendly departments), but I'm expecting the job market is a very different process when you're not at the top tier schools. It seems like it would be good to know early on in the program how to position yourself for the job market experience when you face a situation like this.

I have an MPP from GW and about half my coursework was in the graduate economics program there. So I ended up doing about a first year's worth of a traditional econ phd program. I can strongly, strongly second everything that Peter has said here. It bears no resemblance at all to your undergraduate econ. Forget about it if your math is weak and be comfortable with not exceling like you did in undergrad. The advantage of that graduate school pressure-cooker, of course, is that you are always challenged and learning and if you like that you're in the right place.


I have written elsewhere about the "magic" formula --- PhD in hand + publications in refereed journals + high teaching evaluations - 'lunch tax' = tenure track job

Hard to get a job without PhD these days, make your mark by conference participation, networking, but most importantly publication. The more marginal your program, the more publications in better outlets is required.

Finally, do an excellent job in the classroom. While teaching is local and research is global, at the beginning of your career being a good teacher can be positive in getting a good job at a high quality teaching institution.

Duke candidates this year had videos which mainly talked about their research, but also did signal their ability to teach. I think this will become the norm in the coming years. Be professional, be engaging, etc.



That was a GREAT pick up. In fact, I would argue that among non-Nobel Prize winners, Alchian is the most important thinker followed very closely by Kirzner, Demsetz and Tullock.

I agree, the CW of Alchian are worth every penny and students would do very well reading his papers. I have posted about him and his work here before, but this was an oversight in my post.


Thanks - I do have an assistantship with an opportunity to teach a class in later years, which I think is going to be a big advantage.

"read its master practitioners daily"

What about us math majors? I don't have time to read economics.


What is a "lunch tax." please? Is this when one insists on creating or participating in some lunch group like the one that Tyler, Bryan, Robin, and Alex have at Mason? If now, what is it? New one on me.

"If not, then what is it"?

"I believe you should read widely in economics, but you need to understand the difference between those who are economists and those who merely talked about economic topics."

The irony here is very rich.

"- 'lunch tax'"

Lunch tax?

Lunch tax --- obnoxious behavior or personality traits which make you unpleasant to go to lunch with.

Hah! Good one. Thanks.

Pete, I don't get this idea of a "stealth strategy".

Listening to Kling & Williamson and others discuss microeconomics, it looks to me like the most important thing has been who you write your Ph.D under .. related in part to what Ph.D. program you choose.

If you like science and the advance of knowledge and the challenge of such thing, there have to be a 1,000 flowers blooming out there which offer challenge and opportunity.

Most of science is "normal science" puzzle solving, and I can't imagine why such work wouldn't inspire and challenge anyone, no matter what the particulars.

A under-graduate in biology can't know in advance precisely what particular normal science puzzle he or she will get an opportunity to work on as a graduate student. I can think of a 1,000 different slices and avenues in biology which would be exciting to work on.

I don't see how economics is different.

Make that _macroeconomics_.

"Listening to Kling & Williamson and others discuss microeconomics"

Excellent advice. I look forward to being one of the undergraduates meeting you this summer at the Advanced Austrian Economics FEE seminar.

To comment on Ransom's point on the stealth strategy. What I think that Boettke was getting at was the point that even though there may be puzzles to solve outside of programs that give emphasis to Mises and other Austrians, it nevertheless is a bad strategy to try and false-flag one's way through graduate studies as someone of the mainstream to gain acceptance. If what one really wants to do is to pursue a career based on Mises and Hayek then thinking one can first gain an academic position is simply foolish.

I can attest to the frustration that can be felt if the research focus of one's department is different than one's own. Being an economics major at UMass Amherst, the econ departments focus is anything like the research paths found in Austrian, or even free market for that matter, literature and it is taxing on me at times. This is from an experiences of an undergraduate, I would not want to imagine what it would be like as a graduate. The lesson to be learned: community matters because the right community can strengthen one's interests, help steer one's thoughts down the right path and help one test ideas.

I was at APEE and endorse Pete's praise for including undergraduates. He also offers a sobering assessment of the obstacles to be faced.

I agree with the positive sentiment on Alchian. I dissent from the suggestion that Hayek was running away from Mises, or is a source of confusion.

More generally, APEE rocks and is now the locus for some of the best economists around the globe. The attenadance and the quality are increasing together -- a strong signal.

The next meetings will be in Las Vegas in 2012. Be there.

christian louboutin is the symbol of women.
It is said that a woman without christian louboutin sales knows nothing about fashion.
That is right.If you want to be fashionable.Please christian louboutin shoes.

I can certainly attest to what Pete says here. As an undergrad in recombinant gene technology, I started working right away in a professor's lab, doing research. So when I started the Master's program, it was almost as though nothing had happened.

When I decided to change directions and go into English/creative writing, though, I had a completely different experience. I took a year of undergrad English classes to prepare for my M.A. in English, and I took some creative writing classes. I was a big star in them. But then I went to grad school, turned in my first short story there, and was beaten over the head mercilessly over the piece of garbage I had turned in. Fortunately, the same professor who openly ridiculed the first story of mine he had seen, said of the last story I wrote for one of his short story writing classes that it was "technically perfect." You either transform to that level, or you drop out. It's true of every grad degree, in every field.

Jerry: I think Pete was saying that some Hayek scholars run away from Mises. I think that's pretty evidently true. Mises has unjustly acquired a certain taint. Some sincere scholars really think that citing Mises shows that you are not serious or something like that. Mises's apriorism, which was in fact quite advanced and sophisticated, is taken to be beyond the pale of reasoned discourse. Thus, some Hayekians run madly from Mises. Doing so will almost necessarily skew your interpretation of Hayek. If your fear of Mises is strong enough, you will recoil from Misesian interpretations of Hayek and therefore get Hayek wrong. I think Pete was warning his readers against that error. What would the history of physics looked like if scholars of the time had been sure that Isaac Newton was a Satanist?

Wait - are you saying Mises was a Satanist?

All the more reason to run away from him!!!!!

Some self-described Misesians seem to think Hayek was Satan himself!

The pursuit of technical perfection is what's wrong with higher education in any field other than pure mathematics. All the analytical philosophy written since Wittgenstein and Russell is less insightful than Feste's songs in "Twelfth Night."

Note well.

Samuelson and Friedman mistakenly thought Hayek was exactly the same sort of satanist as Mises.

Many economists today believe that Hayek rejects all uses of math formulas and statistics in economics.

The specter of "satan" still haunts academic "Austrian" economists.

When the education system has some of its core of pathology removed, this bizarre wall between undergraduate education and graduate education will fall.

The Internet is already making it absurd.

Peter wrote,

"In short, if they were recognized in their teens as economic wonder kids by the professional elite, then their undergraduate and graduate experiences will dovetail."

Instructive on the science of the effects of sugar and fats on the human body -- how academic politics can entrench bad science for decades:


If you study scientists like an entomologist studies bugs, you learn that scientists as just as human, all too human, as anyone else.

"Any scientist who studied the potentially deleterious effects of sugar in the diet was endangering his reputation." -- NY Times

Scientists are indeed humans, Greg. Sadly, otherwise skilled scholars do sometimes fail to consistently draw out the implications of this fact. Peart and Levy review Tullock's Organization of Inquiry, which recognizes that scientists respond to incentives:


Well, yes and no. A part of the taint is justified -- Mises had a false picture of science and knowledge, and he attempted to cast economics knowledge within that false conception.

Economics is an empirical science and Mises argued that it wasn't.

That's a well earned and justified taint.

"Mises has unjustly acquired a certain taint."

Mises anticipated by Lakatos's "hard core." If I've got an if-then statement and it's really logically tight, then the only question is whether the if part applies. That's not controversial. Put the label "apriorism" on the same point and suddenly you've got cloven hooves, a forked tail, and big old dunce cap on the top of your head. As far as I can tell, we *can* criticize Mises for overestimating how tight the logical links were between his ifs and his thens. In this regard, Mill was better. But that's a very minor point indeed compared to the unqualified hoots of derision Misesian methodology often gets.

And speaking of Mill, Mises was pretty much recapitulating and updating Mill's methodology. And yet we say Mill was an empiricist, but Mises was not. Talk about fly bottles and the danger of words! We end up quibbling over labels instead of substance.

Mises was way ahead of his peers in methodology. Compare him to contemporaries such as Othmar Spann in one direction and Otto Neurath in another direction. Today Spann's Universalism is deader than dead and is so the old-style Viennese positivism Mises resisted. And yet, we sit around and talk about how methodologically clueless Mises was! That's a genuine puzzle. How could someone who was so much better than most of the celebrated thinkers of his time and place be so cavalierly dismissed and disparaged? The failure to recognize the strengths of Mises's methodology when compared to its contemporary rivals is a significant failure of scholarship in the history and methodology of economics.

Mises anticipated L's hard core, not anticipated *by* L's hard core. :-/

Perhaps someone can correct me if I'm wrong but I thought more than anything Mises was simply providing an epistemic warrant for believing in the validity of economic theorems, rather than having them based off of statistical generalizations garnered through heuristic assumptions. By spinning out the implications of primitive facts about action and meaning, our knowledge of the very complex empirical world can be interpreted through this, thus giving us a more sure-footed way to approach economic analysis. I don't think this is anti-empirical. Mises' method, despite having a lot in common with the way many people see the subject, was scorned because it was misunderstood. Unless I'm wrong I don't think Mises ever said sitting in an armchair was the best way to do economics, but that's what a lot of people thought--and still think that he said. Statistical generalizations cannot substantiate economics "laws" as Mises saw them. His method was also criticized, I surmise, because of the disdain for rationalism, which is a very unfashionable philosophical outlook.

"I do not know." Being comfortable saying those words is a pre-requisite to learning."

Also submitting to the instruction of our advisor/mentor is important. I'm not sure we learn anything from those we do not respect and submit our minds to.

Inevitably this brings one into a scholarly "school of thought" where a researcher can go on the search for new knowledge with a pre-formed perception of the interesting problems, and a learned methodology to attack those problems. This will almost certainly cause conflict with others in different schools of thought who bring different worldviews to the table of science.

Rarely, but sometimes in maturity a researcher may change course wholesale, but this seems quite a rare exception. I'm still married to many of the ideas I was taught by my hero advisor when I was very young and impressionable.

Lesson: Choose the institution and program very carefully because for better or worse, it sticks with you.

If this conversation is going to continue to use the word "taint," I would recommend that people take a trip to the urban dictionary and then decide if they wish to use a different word.

One more follow up.

What brought my above comment home to me is that today I found myself writing a technical note (not for publication) to a fellow scientist I disagree with profoundly on an issue.

As I wrote the letter, I caught myself engaged in a very old argument that my advisor had taken up many years ago. Somehow as I wrote, I felt a sense of pride that the intellectual tradition was being carried on. I hope my side is not wrong on the merrits of the argument, and I certainly don't think so, but maybe it is hard for me to know. Cold objectivity in science is a grade-school conception of how science happens. Human beings are not machines.

A fantasic post and an excellent blog. I am now following. Thanks, Steve


If I understand Mises correctly, then you are correct about what Mises was doing. In order to even understand empirical reality we must have some mental framework, which for him was praxeology - logical deduction from the action axiom (which says that action is a means to actor's ends - whatever those may be). This legitimates economic theory (as long as it is correctly deduced from the axiom) by definition. Demand curves slope downwards, not because we see them do so empirically, but because by definition if something changes that makes pursuing ends via a certain means more difficult someone will use those means less.

Given that framework, we can then interpret empirical reality. Without empirical reality, we know nothing about the ends people pursue and what means people have access to. So, given Mises's methodology, we can say absolutely nothing about the world without actually looking at the world - but once we look at people in the world we can understand them using logic and a means-ends framework.

You're right in saying he's definitely not anti-empirical. Bryan Caplan, for instance, praises Mises's political economy for being more empirically based than standard public choice. I think what gives the impression of his being anti-empirical is his emphasis on the existence of universal economic laws, which people took as empirical claims about certain relationships (which can't be known a priori) rather than methodological ones. Though I'm not sure about that.

Steve: Why should I give up a beloved and hoary old word like "taint" just because it has recently acquired a meaning that some fussbudgets might find indelicate. I mean really, even the anatomical sense of the word is hardly shocking. Nope, it's fine word and I'm using at will.

The "if-then" model of "science", explanation, and knowledge is part of the false picture of science inherited from the philosophical tradition that has done such damage to economic science over the centuries.

Yeah, but that's an anachronistic criticism, Greg. Besides, I'm not always sure I really get the point about the "if-then" model being bogus. Economics lets us say things like "If the central bank increases the money supply, we'll have price inflation." "If a minimum wage is imposed, then the rate of unemployment will rise above what it otherwise would have been." If I don't get to say stuff like that, what fun is economics?


I realize this is off topic but could you explain what you mean by that?.

Roger writes,

"And speaking of Mill, Mises was pretty much recapitulating and updating Mill's methodology. And yet we say Mill was an empiricist."

Exactly my point -- Mill has a false picture of science and empirical knowledge. It's a version of the fallacy of the nomological / deductive model.

It's part of the justificationalist tradition that Hayek, Kuhn, Popper, and Wittgenstein detonate -- the Euclid / Aristotle model of science as demonstrative knowledge, modeled after Euclidean geometry.

No one has made more heroic efforts to vindicate this Mill / Hume / Hempel / Nagel tradition -- and to apply it to economic science than has Alex Rosenberg, who I studied with. The program is all sorts of dimensions reduces to absurdity -- and very evidently ignores all anomalies, rivals, and counter-examples to the picture.

Words, ideas, research programs, and concepts are historical individuals, connected by descent with constant variation (see David Hull).

Berkeley, Hume, Mach & Mill don't own the concept of empirical knowledge -- contingent knowledge of the world doesn't have to be characterized in terms of "given" phenomenal sense data connects by associationist "constant conjuction" or deductively related by "laws". It's a failed picture, and for all of that we still have empirical knowledge of an empirical world that exists outside us as something far more significant that "sense data" and their relations.

So the fact that Mises derives his conclusions about and picture of economic science directly from Mill's false picture of knowledge and science is no recommendation for Mises' account of economic explanation and economic sciences.

Rosenberg doesn't believe economics is a science at all, but a branch of applied mathematics.

Samuelson and Schumpeter thought Mach & operationalism were a better picture of science, and that economics could be fit in that model, esp. with the development of econometrics.

There as also the "empiricist" tradition of Henry Schultz at Columbia, and that of Wesley Mitchell, also at Columbia. And Hutchinson's Carnap influences 1938 seemed to suggest that the cutting edge scientific epistemology of the positivists, with it cutting edge new scientific logic, was a good fit for understanding economics as an empirical science.

And the math economists were rubbing elbows with these cutting edge developers in logic and theoretical mathematics, who seemed to have pushed Mill and the neo-Kantians into the dust bin of history.

It was an exciting time. It was the cutting edge of the modern in science, mathematics, and empirical research.

And in that context Mises looked like a relic, esp. to Englishmen and Americas or Austrians with connections to the "Vienna School" in logic and mathematics.

Roger writes,

"How could someone who was so much better than most of the celebrated thinkers of his time and place be so cavalierly dismissed and disparaged? The failure to recognize the strengths of Mises's methodology when compared to its contemporary rivals is a significant failure of scholarship in the history and methodology of economics."

Roger writes,

"Economics lets us say things like "If the central bank increases the money supply, we'll have price inflation." "If a minimum wage is imposed, then the rate of unemployment will rise above what it otherwise would have been." If I don't get to say stuff like that, what fun is economics?"

I'm all for having such fun.

I'm against attempting to picture economics as a grand nomological-deductive system, using logical operators and statistical measurements, for example.

See Alexander Rosenberg's _Microeconomic Laws: A Philosophical Analysis_ for an attempt to conceive economics as an "empiricist", nomological-deductive system as Mill imagined it.

So you don't deny that we have if-then statements in economics?

Roger, here are some papers by philosopher Larry Wright on the uses and limits of the deductive ideal:

"Reasoning and Explaining," Argumentation, Vol. 16, 2002, 33-46.

"Justification, Discovery, Reason & Argument," Argumentation, Vol. 15, 2000, 1-8.

"Reasons and the Deductive Ideal," Midwest Studies in Philosophy, Vol. 23, 1999.

"Argument and Deliberation: a Plea for Understanding," The Journal of Philosophy, Vol. 92, No. 11, 1995, 565-85.

Wright doesn't really go much into the history of the philosophy of science in these papers, but his background as a philosophy of science who wrote a dissertation on the nature of explanation under Wesley Salmon, Michael Scriven, and Norwood Hanson should be evident.

Wright famously rejected the deductive ideal in his landmark account of teleological explanation, which Alexander Rosenberg calls "the most important work written on teleological explanation since Aristotle".

The suggestion, Roger, is that science and explanation is a much bigger thing than deduction, and that the deductive ideal give us an impoverished and false picture of science and knowledge.

It doesn't even give us a good model of explanation or argument.

It plays a role in these, but it takes work to tease out what it does and what it doesn't do.

Often deduction certainly does not compel assent, as logical and mathematical implication is meant to do in formal logic and in mathematics.

Danial Hausman probably does the best job attempting to conceive economics as a Millian science consisting of supply and demand ceteris peribus if-then statements.

That certainly is only a tiny slice of what economics is -- and it certainly does not capture what Hayek is doing in casting economics as an causal / explanatory enterprise.

Right. Rosenberg attempted to stuff economics into whatever is left of his Nagelian picture of science (numerical prediction & physics based natural kinds, mostly), and ended up tossing economics from science.

One of the absurdities I speak of.

Brad writes,

"Rosenberg doesn't believe economics is a science at all, but a branch of applied mathematics."


I completely agree with your statement that science is much larger than deduction. Yet, that does not mean that deductive systems are not useful for understanding the world. Even if their only purpose is to provide a language to persuade other scientists of your historical interpretation, it still has value. In my mind, that is what Mises was trying to do with "Praxeology"; give a language which let us do what economics primarily is (economic history), which is "thymology" or understanding/interpretation.

My reading of Mises could very well be wrong. The deductive framework he gives is the extent of what we can do if we want to come up with a "value-free" social science, but since science usually involves value judgments of a sort most of the science will fall into understanding.

I guess I'm not sure I see the tension between what Mises is doing and what Wright is doing (which seems to me very similar to what McCloskey's rhetoric or Lavoie's hermeneutics), except in Mises's emphasis. I am interested in further writings like Wright's, though.

Yes, I agree with Ryan. I don't think by using one method (deduction), you're committed to the idea that economics in its entirety must be understood only in that framework. If anything, praxeology simply grounds our efforts in a few self-evident propositions and gives us a focal point toward empirically understanding the rest.

I think this indictment of deduction in economics applies more to more mathematically inclined economists of the "mainstream" who view economics as a predictive science, rather than an explanatory one like Mises and Hayek did. Models based on deduction, in Mises' eyes, aren't for prediction; they are used for historical interpretation, for understanding.

Econ has always had an epistemic status / scientific status problem.

Presumptive solutions to this problem have dramatically shaped the explanatory content and structure of economics explanations.

Mises attempted solution gets many very deep things right, which rival mainstream attempts utterly miss or botch, but for all that Mises applies the logical categories to economics in a way that makes the sceme come out a fail in the most self-evident overall general way observable to the supeficial everyday academic economist, ovwrwhelmed by the power and status of sophisticated math and statistical analysis.

This is a problem.

I think I bear a disproportionate share of the blame for getting this thread into the swamps of methodology. I will don my sackcloth presently. Pete's call to "embrace Mises" was surely not a call to methodology! Facts are our friends. Gather facts, analysis facts, think about facts. Tell others what the facts are. Young Austrians are at risk of over-investing in methodology, which can marginalize you if you're not careful.

Calling these root explanatory problems "methodology" is a Millian legacy -- and itself reflects a pathological understanding of explanation and science ...

Roger, I'd put it differently.

I'd say, normal science is your friend.

Bury yourself like Darwin in decades of normal science (barnicles, editing) --there is always a lot to be done. You'll then be allowed to take on the global explanatory problem of economics -- exploiting your normal science mastery and prestige.

You may have revolutionary reconceptions buried in your chamber -- as Darwin did -- but you won't have an audience or prestige or the competence required to handle opposition from all side, until you've earned your spurs solving the normal science puzzles of the current profession.


your claim that Mises anticipated Lakatos's hard core surprises me. There is nothing categorical in the hard core. Roy Weintraub - in his great 'General Equilibrium Analysis' (1983) - correctly mentions that hard-core propositions are not true in an apodictic way, but only ACCEPTED as true (p. 31). Hard-core propositions have a CONVENTIONAL basis, something quite alien to Mises's philosophy. Lakatos accepted the Hume-Popper view on certainty: all knowledge is purely hypothetical! Certainty is beyond our reach! Mises and Lakatos are incompatible.

Call it a flavour Roger:) As if the words matter.

Call Mises a fallibilistic apriorist (a la Barry Smith) and call Popper a modified (critical) Kantian and they are quite compatible.

A couple of briefing notes for students from thoughtful research scholars.

Richard Hamming on how to do cutting-edge research.

C Wright Mills on the craft of scholarship.

Someone has suggested that three things make for research that garners wide acceptance in the best journals:

1) precise, repeatable measurements
2) broad systematic application
3) a problem that spurs the imagination of human beings so that the subject enjoys popularity

What are some recent discoveries that wertfrei economics lay claim to which fit these criteria?

What should a prospective grad student think about joining a school of science that does not boast new discoveries which fit into this system?


What Rafe said.

I think Mises has something a lot like the hard core even if he is vague about its status as convention, Kantian a priori, or whatnot. And in the 20s and 30s Mises was quite vague on the philosophical status of core Praxeological assumptions. If you make explicit conventionalism the sine qua non of "anticipating" Lakatos, okay. But, again, he was way out ahead of his contemporaries, much closer to later developments than his methodological rivals.


Not only does he "anticipate" the Lakatos type argument, but also the Duhem-Quine thesis about the difficulty in testing.

See my entry on Mises in U. Maki, et al eds, The Handbook of Economic Methodology. Rizzo and David Levy were among the first to point this out.

A lot of people read Mises with the intent to indict him, rather than learn from him. Others read him with the intent to insulate him, rather than to see his program as progressive.

Also there is the issue --- which is what I was talking about in this post -- which is Mises's substantive economics rather than his methodological pronouncements. Lets talk about his substantive economics and his argumentative structure. Mises is an economic thinker along the same lines as Becker is an economic thinker. Lets embrace the _economics_ of Mises.

Again, another phrase that I has stressed to graduate students is to think like a Misesian, but write like a Popperian. This relates to the "taste" issue that Rafe raises --- most economists prefer the Popperian rhetoric to the Misesian rhetoric. But this shouldn't impact our substantive economics.


We have drifted well off topic but as the contribution of Lakatos has come up it may be helpful to point out that his half-baked theory of research programs ran out of steam several decades ago. It was an attempt make a Hegelian synthesis out of the idea of metaphysical research programs MRPs which he found in an unpublished Popper manuscript and Kuhn's idea about refraining from criticism of the paradigm. Lakatos rebadged MRPs as Scientific Research Programs to make them ok for the positivists and he renamed the paradigm as the hard core. I think that the two major conferences that were devoted to the application of his idea in economics demonstrated that it did not fly. He died in 1974, just before the first conference so his idea lived after him but not by much.

Getting back to Mises, it is most unfortunate that he and Popper never traded ideas in a helpful way. Mises could have learned that positivism did not work in physics and Popper could have learned that state intervention is not required to fix monopolies and unemployment.

During the 1920s they were both working after hours on the fundamental problems in their respective fields and later they met in the Mont Pelerin Society but never generated any synergy from their ideas. That was a tragic loss for economics and for classical liberalism.

Years later Popper wrote:

“I was always very conscious of Mises’ absolutely fundamental contribution, and I admired him greatly. I wish to emphasize this point since both he and I were aware of a strong opposition between our views in the field of the theory of knowledge and methodology…I respected Mises, who was much older than I, far too much to begin a confrontation with him. He talked often to me, but he never went beyond allusions of dissent…Like myself, he appreciated that there was some common ground, and he knew that I had accepted his most fundamental theorems, and that I greatly admired him for these. But he made it clear, by hints, that I was a dangerous person – although I never criticized his view even to Hayek: and I would even now not wish to do so.”

This is not the place to pursue this, however I would like to hear from anyone who has come across material on the personal relationship between Mises and Popper.


I'm no philosopher of science. Since I have a high opinion of your viewpoints, I put a big question mark behind my understanding of the relationship between Mises and Lakatos. Perhaps I'm blinded by Mises's STYLE of reasoning. Further, I have no problem admitting that Mises's philosophy of science was ahead of his time. I just have too little knowledge of the state-of-the-art arguments at that time. So I cannot form an opinion.


you write: "A lot of people read Mises with the intent to indict him, rather than learn from him. Others read him with the intent to insulate him, rather than to see his program as progressive."

I'm sure you are not talking about me, since I never started reading Mises with such stupid and unscientific intentions. I further believe that there are much more people reading Mises with the intent to worship him, then there are people who want to indict or insulate him (I'm likewise not talking about anyone associated with this blog).

Nevertheless, I think you overrate Mises's contribution to economics. He was a great economist. No doubt. But so were Viner, Fisher, Hicks, etc. And there are reasonable arguments to prefer one to the other. Such verdicts are informed by all sorts of subjective biases, and legitimately so. Nothing to quarrel about.

What is unproven, however, is the alleged productivity of Mises's research program. Compared to the productivity of the Neo-Walrasian program, as defined by Weintraub in 1983, the output of Mises's program is neglible (and even negative if you also count the Alabama Mises Cult). Note that the measure of scientific productivity is conventional, so that saying Mises's program is relatively unproductive doesn't necessarily suggest that it is defective.

Speaking of cultists:


A note on Arash's claim re the comparative productivity of the Austrian program and the neo-Walrasian program. This is a nice demonstration of the limitations of the Lakatos MSRP program which Weintraub used at book length to assess the progress of the neo-W program. But that program in its formal and mathematical form is not even scientific in the sense of being testable, or describing the way the world actually works. Science is about testing things to see if they work but the Lakatos MSRP is about protecting the core assumptions from criticism.

In contrast the Austrian/Mises program demonstrated the impossibilitiy of central planning, provides a critique of many forms of unhelpful interventionism, and generated a number of exciting programs in practically every area of economics (but not experimental economics) that have both scientific and policy implications that can be explored in a scientific (critical) mannner, using evidence along with other forms of criticism.

As Pete Boettke pointed out the Austrian program can link to Weber in a critical and progressive manner (eliminating Weber's errors). Nobody suggests that Mises got everything right but the program which can be found in Talcott Parsons (1937), Mises (1940) and Popper (1944/45) contains the ingredients that could have kept economics on track instead of deviating into mathematical formalism and integrated economics and political economy with the other social sciences in the process. (Don't be misled by anything that Parsons wrote after 1937, he joined the rush to general systems theory, what was it about Harvard, the air or the water?).

What is coming out of neo-Walrasian economics that compares with the work that is in progres in the applied research fields at GMU- African Enterprise, Mercatus etc?

Getting back to undergraduates, at least at the honours level they probably need to know enough about the history and philosophy of science to understand how ecomomics was almost wrecked by the rise of logical positivism and logical empiricism, and how the Austrians offer something different, without sacrificing all the goods that come from maths, properly used.

Excellently said Rafe. By the way, your endorsenment of _The Structure of Social Action_ on Amazon was the reason I bought it.

If we're going to talk like Popper, the key is to privilege empirical problems.

Popper taught Hayek to privilege Menger & Mises' empirical problem of "spontaneous" design-like global economic order in the context of limited knowledge and changing understanding.

This solves the core "status" problems of economics -- it explains how economics is a science and it showes the contingent/causal character of its explanatory mechanism -- very similar in structure to the secure empirical science of Darwinian biology (design like order, contingent causal mechanism).

This "hard core" or Quine/Duhem stuff is a distraction, and in important ways the discussion is tied to the pathological nomological-deductive / formalist tradition.

The power of Mises (in part) is looking at the causal mechanism -- changing entrepreneurial judgments in the context of changing profit and loss signals, and solid property rule and solid money.

The role model here should be philosopher of biology David Hull -- who regularly points to the unhelpfulness of attempts to smash Darwinian biology and related biological sciences into the archaic frame of mid-20th century philosophy of science.

All such efforts were failures which disfigured the science while failing to contribute to our understanding, except in the negative sense of discovering what didn't work (sometimes under-rated for its cognitive contribution).

Exemplars with explanatory power and success are self-justifying and have privilege over "rules" or justifications randomly derived from unrelated cognitive endeavors (usually rules about the necessity for demonstrative justification taken from geometry and re-imaged to apply to "empirical" phenomena.)

Thanks Brad, The Structure of Social Action is a difficult read but it makes sense and it got a tick from Mises for historical scholarship. After TSSA Parsons became even more difficult to read and less helpful for a number of reasons.

You may find this interesting.


@ Rafe

This is clueless: "This is a nice demonstration of the limitations of the Lakatos MSRP program which Weintraub used at book length to assess the progress of the neo-W program. But that program in its formal and mathematical form is not even scientific in the sense of being testable, or describing the way the world actually works. Science is about testing things to see if they work but the Lakatos MSRP is about protecting the core assumptions from criticism."

You clearly misunderstood Weintraub's book and the role of "testing things" in science.

Actually Rafe's point is perfectly illustrated in the Weintraub link I posted above.

@ Fresno

Lots of people disagree with Weintraub; none of them treat him with such contempt. This should make you wonder. Give him a fair reading and you'll see how improper your caricature is. To declare that Weintraub is a cultist - as you did - is just absurd.

Caricature? These are HIS words in that linked essay, HIS representation of neoclassicism. Any open-minded reading of that essay gives the impression of a man laying down the canon for believers.

I guess you are annoyed by this paragraph (note my emphasis):

"What can be contrasted to neoclassical economics? Some have argued that there are several schools of thought in present-day economics. They identify (neo-)Marxian economics, (neo-)Austrian economics, post-Keynesian economics, or (neo-)institutional economics as alternative metatheoretical frameworks for constructing economic theories. To be sure, societies and journals promulgate the ideas associated with these perspectives. Some of these schools have had insights that neoclassical economists have learned from; the Austrian insights on entrepreneurship are one example. But to the extent these schools reject the core building blocks of neoclassical economics—as Austrians reject optimization, for example—THEY ARE REGARDED BY MAINSTREAM NEOCLASSICAL ECONOMISTS as defenders of lost causes or as kooks, misguided critics, and antiscientific oddballs. The status of non-neoclassical economists in the economics departments in English-speaking universities is similar to that of flat-earthers in geography departments: it is safer to voice such opinions after one has tenure, if at all."

A-ha! Weintraub doesn't describe Austrians as unscientific oddballs and flat-earthers. He just make the claim that the "neoclassical mainstream" does. He doesn't say that this is a good or fair or whatever description of heterodoxy. There is no evidence to the contrary in his piece. BTW, his father Sidney was a prominent Post Keynesian and co-founder of the Journal of Post Keynesian Economics; Roy Weintraub certainly wouldn't describe his father as an oddball.

PS. His representation of neoclassical economics is quite standard: optimizing agents, equilibrium, etc. Not a big deal.

No, that paragraph didn't particularly annoy me, although it does highlight the kind of open-mindedness that you regularly put on display here. (There seems to be little room for honest opponents and disagreement in the neoclassicist worldview.) What I noticed in particular was this one:

"Neoclassical economics is what is called a metatheory. That is, it is a set of implicit rules or understandings for constructing satisfactory economic theories. It is a scientific research program that generates economic theories. Its fundamental assumptions are not open to discussion in that they define the shared understandings of those who call themselves neoclassical economists, or economists without any adjective. "

I found this amusing in light of your own characterization of certain Austrians as cultists.

I just don't see the problem with this paragraph. It's how the hard core is defined in a SRP. I'm already brainwashed. sorry ;-).

BTW, when I speak of cultist, I mean this: Lewrockwell.com

In other words, neoclassical economics is "normal science" to use Kuhnian language. That means that, for the neoclassical economists, they are right *by definition*, and anything that challenges their basic world view is wrong *by definition*. That can only get so much done, of course. Any one of the heterodox approaches may end up taking over in a paradigm shift once it becomes clear that the original program is insufficient to come up with new ideas or is telling us false information. One would think the almost complete failure of the economists to understand and predict what happened with this last recession would have caused such a shift. Apparently it will take something worse.


a shift is not to be expected in light of the Great Recession as long as the program can generate new models and predictions with excess content. It is not so much the inability to predict the unpredictable (I thought Austrian/Keynesians take uncertainty seriously) that determines the fate of a research program, but its ability to come up with a productive response. Neoclassical ecoonomics, as defined by Weintraub, is just doing this: see all the efforts to combine finance and macro (with all sorts of frictions, etc). See Acemoglu and Rajan on inequality. What is the response of the Austrian program? The ABCT? The claim that Mises saw 'it' coming?

"BTW, when I speak of cultist, I mean this: Lewrockwell.com "

Well, thanks for clarifying. When you spoke of the "Alabama Mises Cult," I assumed of course that you were referring to Mises Institute scholars such as Huelsmann, Salerno, etc. I mean, I didn't think you'd be basing your opinion of this work on an eclectic site like LRC, which does of course run Austrian articles but also a lot of other things (some good, some not so good), and certainly can't be considered a definitive representative of this body of work. But I guess I assumed wrong.

My bad. I respect Salerno a lot even though I don't share his views. However, LRC and LvMI are 'related', isn't it? On that score I side with Tom G. Palmer against the "Fewer Swamp": http://tomgpalmer.com/category/the-fever-swamp/

Perhaps this explains my earlier statement that "I further believe that there are much more people reading Mises with the intent to worship him, then there are people who want to indict or insulate him "

Arash, how are you guys modeling regime uncertainty among the frictions in the market?


There are different kinds of predictions. ABCT does in fact make predictions -- which have proven themselves. I learned about ABCT only recently, but all I had to do was read Hayek saying that low interest rates encouraged risky behavior, and I immediately understood what caused the Great Recession, since I remembered Greenspan driving down interest rates repeatedly. Had I know about it earlier, I would have been able to predict that we were in a housing bubble, and that it was bound to burst. Those are all predictions one can make, even if one cannot predict the severity of the bubble or the burst (well, if you are paying attention to historical trends, you can predict the increasing severity of the downturn with each day, week, and month that passes with the bubble increasing). One cannot make the kinds of precise macro predictions neoclassical economists too often pretend they can make. That's why almost everything they ever said about the housing market and the state of the economy prior to and after the bubble burst were utterly wrong. And because they are utterly wrong, we are still in the same mess. Why, then, despite the abject failures of mainstream macroeconomics, is anyone listening to you guys? I don't know. In every other science, such dismal failure would result in a paradigm shift or an abandonment of the entire field with everyone declaring it to be a fraud. And that really is what mainstream macroeconomics is: a fraud. It's not even wrong.

Pattern prediction.

Exactly. Patterns, not specifics. One can get the patterns wrong too, though.

@ Troy


The comments to this entry are closed.