Israel Kirzner has often repeated the story that after studying for a while under Mises, Mises arranged for him to receive a PhD fellowship to continue his studies at Johns Hopkins under the mentorship of Fritz Machlup. As Mises explained to Kirzner, Machlup would be a better mentor for a young economist who had talents to advance their career. When Kirzner tells the story, he stresses how impressed he was by Mises's generiosity in working out this arrangement for him and in his assessment of Kirzner's promise as an economist. Kirzner, however, stayed on at NYU to complete his dissertation under Mises's direction, and then was hired by NYU as a faculty member (another fact that has important signals about Kirzner's widely recognized skills by those at NYU given this break from normal academic protocol). Over the years, Kirzner would climb the academic ranks -- both at NYU moving from Assistant Professor to Full Professor to Professor Emeritus, and throughout the economics profession world-wide as he became the leading scholarly representative of the modern Austrian School of Economics.
It would be an interesting exercise in counter-factual intellectual history to consider what if Kirzner had taken up Mises on his offer and pursued his PhD not at NYU, but at Johns Hopkins under the mentorship of Fritz Machlup. Kirzner's work from the start would have been tied closer to the industrial organzation literature of that time, rather than more general theory and history of doctrine. No doubt, his work would have been process oriented, but perhaps more of an evolutionary bent. And, his own development of praxeology, including his entrepreneurial theory of the market process might only have been evident to those who are so emersed in Mises's system to know the difference between that Austrian version of early neoclassical economics from the later versions of neoclassicla economics as it evolved in the post-WWII era. In many ways, Kirzner's fate might be similar to Machlup's with respect to modern Austrian economics.
Not enough attention is paid to Machlup within the contemporary Austrian school -- save Roger Koppl and Richard Langlois.* But perhaps this will change with some recent work by Gabriel Zanotti and Nicholas Cachanovsky, folks will start to understand the important place that Machlup holds in the history of the Austrian school of economics -- analytically and methodologically. Machlup was Mises's student from Vienna and he went on to a stellar career in the US -- teaching not only at Hopkins but eventually at Princeton. He worked tirelessly throughout his US career to aid his fellow Viennese academics to negotiate the turbulent seas of post WWII academics in the US. He was close with Mises's other students, such as Alfred Schutz and of course F. A. Hayek.
What I have become intrigued about recently is the concept of path dependency in intellectual history work. Certain readings of authors become cannonical, and then that can alter our understanding of what that author had to say about critical issues. Consider the most recent battle over the intellectual legacy of Adam Smith, with readings such as Emma Rothschild or Sam Fleischacker in contrast with the work of James Otteson or Ryan Hanley. A similar sort of issue could emerge over the legacy of MIses with respect to economics, political economy and social philosophy. As Zanotti and Cachanovsky argue, in the immediate aftermath of Mises's Human Action, two readings emerged of Mises's methodological pronouncements: a Rothbardian defense of extreme apriorism, and Machlup's more subtle reading of Mises's position which anticipated many of the arguments that would later be understood as implications of both Duhem-Quine and Lakatos.** Machlup's argument has the advantage of linking Mises more closely with folks such as Schutz and Hayek. But Rothbard's reading prevailed -- as both young friends of the libertarian message thought they found a bedrock foundation for their views, and foes who thought they caught the old man in an obvious trap of dogmatic nonsense embraced the Rothbardian reading of Mises. It thus became the way everyone came to understand Mises's praxeological system, and as a result the earlier connection between Mises's rational actor centered approach to the sciences of man that was attractive to scholars from Buchanan and Tullock to several others who championed methodogical individualism such as Vincent Ostrom and James Coleman (and even John Rawls) became less and less obvious. And even the invisible hand style of reasoning that follows that is so closely associated with Hayek, but actually was taught to Hayek by Menger and Mises, gets lost in the evolution of understanding the Misesian project. Rothbard's reading has consequences, and it is important we start to acknowledge these.
Let me be clear about something, Rothbard's reading is a plausible one. If it wasn't at all plausible, it could not have been a contender and it could not have persisted as long as it has in the contestation of ideas. But that contestation isn't a smooth a process of intellectual progress as we might like to believe due to institutional impediments and intellectual path dependencies, etc. Still, the market for ideas is not wildly inefficient either -- it is just a process that has a lot of slack in the system. But being a plausible reading doesn't mean it is a correct reading, let alone the most productive reading for contemporary scholars. Machlup's reading of Mises might actually be more correct, it also might be more productive. This would be the current counter-factual that we might need to contemplate in methodological discourse. Zanotti and Cachanovsky are giving us good reasons to consider that altenative reading and understanding about Mises's position and the way forward in the sciences of man methodologically.
*Richard Ebeling, of course, always has acknowledged Machlup's central importance in the history of the Austrian School of Economics. And there is also a nice paper in the QJAE by Carol Connell.
**I must confess my complete sympathy with Zanotti and Cachanovsky here given my own effort to present Mises's methodology in his light in my chapter for The Handbook of Economic Methodology. My reading of MIses, also fits with Mario Rizzo's effort at Lakatosian reconstruction. A careful reading of my paper with Pete Leeson, "Was Mises Right?" will reveal that we make this argument again, though we work with the tripartite division of the realms of knowledge between pure theory, institutionally contingent theory (or applied theory) and historical economics.