Advanced Topics in Market Process Theory

|Peter Boettke|

If you were to teach such a course to PhD students, what would you emphasize?

(a) possibility of modern tools to represent older theoretical ideas associated with market process analysis

(b) possibility of a multiplicity of empirical approaches to illustrate theoretical ideas associated with market process analysis

(c) current research in the market process tradition -- both theory and application

(d) developments in the philosophy of science that are consistent with, but yet provide a novel defense of, the market process approach to economic science

(e) criticisms of the market process approach and possible defenses against the critics

(f) some combination

 

I fear that the (f) response will result in a course that lacks serious depth on any of the (a)-(e).  I do think (e) can be incorporated into (a) - (d). But I think (a) - (d) represent radically different approaches to teaching a PhD course within the confines of a 15 week semester.

 

Clarification: The pre-requisites for this class would The Austrian Theory of the Market Process I and The Austrian Theory of the Market Process II.  So the background in the Austrian tradition would already have been covered.  Moreover, students at GMU that would take such a course would also have had the opportunity to take Larry White's monetary course, Pete Leeson's development course, Richard Wagner's public finance course, etc., etc.  So my thinking is that I would try to explore some mix between (a) and (b) and with a focus on the task of intellectual arbitrage between the Austrians and the cutting edge of mainstream economics.

Comments

[Lode Cossaer]

From a student's perspective; I'm not sure if (a) is really all that interesting. I'm not sure what you mean by it, but at the graduate level, I wouldn't be interested in 'proving' division of labour, capital accumulation and so on by 'new' methods.

As someone who considers himself mainly Austrian, I would be very interested in (b). Since Austrian economics is not anti empirical research - au contraire, Mises and Rothbard did a lot of it, too name just two prominent examples - but in favour of empirical research within the correct bounderies of the epistemological problems of economics. I'm not sure, however, if this were to 'illustrate' theoretical ideas. Empirical research like experimental research, however, is very interesting and promising.

You can never go wrong with (c).

Although (d) sounds interesting, I'm not sure if you can fill an entire course with it. What kind of of new developments would you be considering?

(e) doesn't seem like something to be done on the graduate level. Although interesting in itself, it should be something on a side.

I would say that a core research program focussing around b and c would be great. d and e could be incorporated a bit, but the focus, imo, should be around d and e.

But that's just me, talking from a students perspective.

[Lode Cossaer]

... should be around b and c. Not d and e. My bad.

[Harrison Searles]

I am neither a graduate student nor a professor - being merely an undergrad myself, but I will give an opinion from the perspective that I have.

Above all, I would probably be disappointed in a graduate seminar if it were entirely devoted to (f). The reason is that much of what would be taught in (f) could be learned by reading writings against market-process theory. I do not see what would be the advantage of taking a course like (f) rather than just relying on independent reading.

Furthermore, I do not know what you would consider to be the criticisms of market-process theory (I would place the prima facie bet that most modern economists would not consider themselves opponents of it), but I would doubt that it would really help prepare me as a student for understanding the contemporary debates in economics. Instead, I dread that the class would instead be mostly constituted of Austrian self-congratulation on the defeat of ideas that no respected theorist would ever hold these days. If the class focused on theorists like Minsky, then I would be excited to take the class because I have not seen a lot of Austrian material on coming to terms with his ideas. However, I fear that the seminar would be a rehash of the ideas of Hayek's _The Counter-Revolution of Science_ or Mises' _Theory and History_. If so, I do not think such a seminar would help me become a better economist.

I think that (d) can also be critiqued on the basis of I do not see how it would make me a better economist than would simply reading the books on the syllabus over a break and spending my time on an economics course during the semester.

Really, the two options that I would be most excited to take as a student would be (b) and (c). (B) because empirical evidence is very important in making a case and there are not really any substitution-goods available for this seminar (that I know of) so it is comparatively more valuable to have taught in a class-room setting than other options on the list. (C) because becoming literate in current research would be one of my expectations in graduate school so taking a seminar on it seems to be a good idea.

[Adam]

b for Mason students. Mason students should soak up c on the their own (if they're any good) and a workshop on b will serve them best.

c for students at most other schools, since they already are heavily invested in techniques but could use the good theory to ask good questions.

[Simon Bilo]

I would go for (e), but I admit that it might be a personal bias. I find it very important to understand the tensions between Austrian economics and the other approaches. If Austrian economics has its place in economic research, it has to be clear what the advantages are. What important insights can be gained that would otherwise be lost? What is the exact reason that they would be lost? How far the tensions go and what are their reasons? What are the best arguments against Austrian economics?

Create the most sophisticated hell for Austrian economics that you can and see what can be saved. That would be a wonderful exercise, at least for me.

[Mario Rizzo]

I taught a course called "The Economics of Time and Ignorance" quite a few years ago when market process analysis was more potential than actuality. The problem then was that students wanted examples of what they could do in the way of research in that tradition. And there were not many to present.

Today I would emphasize how certain kinds of work exemplify the theoretical and methodological generalizations of the process economists and (perhaps) philosophers. So, where possible,for example, I would have a section on "real time" describing it theoretically and then providing some example of the use of the idea in economic analysis.

[Gene Callahan]

I would favor c), and then use it to illustrate a) and b) and answer charges made e).

So, "Here is Carilli and Dempster on ABCT and prisoner's dilemma's -- see how they made use of game theory. Here is Pete Leeson on pirates -- see, historical archives research. Andy Young on ABCT: you see, the critics in e) are wrong: market process theorists DO use modern econometric tools."

Pick one good, recent paper per week, read it, discuss it in depth, and use those to bring up all of the a) b) d) and e) points you want along the way.

[Jake Roundtree]

I would teach a course on orthodox price theory through the works of J.B. Clark, Fetter, Wicksteed, Menger, Davenport, Mises and Rothbard. Most Austrians today are almost completely ignorant of the Causal-Realist tradition on which Mises and Rothbard developed their analysis.

Before you can start contrasting approaches, considering empirical investigations and thinking about the philosophy of your science you need to master the fundamentals.

[Roger Koppl]

IMHO, Pete, you must do what works for you, the professor. If I have to choose one from your list, I suppose it would be (c). I think it might be good to give the students what Mario's student desired: examples of what they could do in the way of research in that tradition. Empower them.

[Jerry O'Driscoll]

I agree with Roger. History and case studies are important. Market process theory can explain the real world. Mario and I did that in Economics of Time and Ignorance.

One example would be the recent boom and bust. There were many causal, moving parts in the story. There is ample room for many studies.