Economics, Cognition, and Society

The ECS series from University of Michigan Press has long been one of the most innovative book series in economics.  Timur Kuran founded the series over a decade ago.  I was recently appointed as an editor of this series by University of Michigan Press and Timur and I will share the editorial duties.  I am absolutely thrilled to be associated with this book series.

Timur Kuran is moving to Duke University, where he will be both in Islamic Studies and in Economics.  I have long argued that Timur is among the economists and political economists of my generation among the most creative and insightful thinkers.  Congratulations to Duke and to Timur for the move.

I recently purchased the Oxford Handbooks in Political Science.  From my quick look into them, these will be important reference works for my own research and teaching.

Finally, my colleague Bryan Caplan's The Myth of the Rational Voter has made a major splash and rightfully so.  I read the book in ms form several times and I have read it again in final published form.  Bryan is brilliant and his book is well written and bold.  He and I have our disagreements over the role of Austrian economics in the broader academic discipline of economics and political economy.  But Bryan's major complaint about me is that I attribute to him Austrian positions which he doesn't agree he is adopting.  I think it is because he has too narrow a definition of Austrian, he argues I have too wide a definition.  So he will not be surprised, though he will be slightly bothered (though I am sure not surprised) that I would consider his book fundamentally Austrian. Why?  It is methodologically individualist.  It focuses on the cognitive limitations of man.  It asks us to think not only about the material incentive issues that actors face in making decisions, but also the information they use in the context of that decision. It follows an invisible hand set of explanation to discuss the market order.  And, Bryan isn't shy about referencing major Austrian writers, such as Mises.

Bryan's case against Austrian economics has its strong points and its weak points, and today is not the day to rehash them.  But just today I was watching the Liberty Fund DVD interview with Armen Alchian as I was doing my morning exercise bike ride.  It struck me that Alchian's discussion highlighted so many points in common with the Mises/Hayek perspective on the market process.  And that led me to a clearer understanding of my own position with regard to Austrian economics in the academic world today.  I think of economic concepts from thinkers as so many pairs of underwear.  I tend to like a particular brand, but I don't wear the same pair everyday.  I change underwear!  Ideas are either useful for particular purposes or not, when they are not useful, we would do well to change them just as we do our underwear.

If some aspects of Mises, for example, are useful, we should use them, but those parts that are not useful for our purposes why should we worry about discarding them?  Similar with Hayek, Rothbard, Kirzner, or whoever.  Thinkers are not completely bundled goods, we can unbundle them for different purposes.  So if I like Rothbard's vision of politics, but Hayek's analysis of spontaneous order; or Kirzner's presentation of the competitive entrepreneurial process, but Rothbard's understanding of monopoly, why cannot I blend to offer my own rendering of politics, law, markets, and history?  Caplan argues that by adding systematically biased beliefs into the mix, the rational choice stew will taste significantly differently, and it does.  But he is still a methodological individualist, and he still is in the rational choice framework of political economy.  Bryan Caplan isn't an Austrian in the same way that I am not an Austrian, and for that matter neither was Mises or Hayek, or Rothbard, or any thinker over the past 100 + year history of the Austrian school that tried to make a contribution to scientific knowledge and/or political understanding.

Caplan's book should be on everyone's reading list this summer.  A brilliant mind tackling a hard persistent problem in political economy results in a refreshing outlook and strategies for wrestling with the problem.  We don't see eye to eye on some of the solutions, but I applaud Bryan for his courage in pursuing the logic of his argument and also for the general thrust of comparative institutional analysis in his work that views the market as a more effective decision making context for weeding out error than politics.  I don't know if Bryan will admit to being an Austrian, though the Austrian influence on him is real and not imagined and evident throughout his work. But it doesn't really matter.  Instead, what matters is that Bryan has produced an original and thought provoking book in political economy that demonstrates that he is a very good economists (no hyphen needed).

Congratulations Bryan!

All that promise that we were first exposed to when your undergraduate thesis was circulated around by Sheldon Richman has not only come true, but exceeded even the high expectations that work created among my generation of Austrian and libertarian thinkers.  I count myself as very fortunate to have colleagues like Bryan.

P.S.: Look for Bryan's podcast with Russ Roberts next week.

Comments

[AJE]

When I interviewed Mary Douglas I asked her: are ideas like gloves or like skin? She thought it was a ridiculous question. I can only imagine what she'd of thought of an underwear metaphor!

[Bogdan]

I have no problem agreeing with Caplan's overall perspective, but I can't (at least for now) make room for his normative definition of irrationality into my fundamentally misesian understanding of choice or human action.

[Steve Miller]

Anthony, did you happen to notice that Pete jumped from an underwear metaphor to a food metaphor?

[PrestoPundit]

Armen Alchian was one of those massively influenced by Hayek's "The Use of Knowledge in Society" at a very early point in his career. Thus it is no accident that Alchian's viewpoint shares "many points in common with the Mises/Hayek perspective on the market process." Alchian uniquely developed many ideas he previoiusly shared with Hayek because Alchian closely read Hayek.

[aje]

“ideology is not something minor, like the relative mix of different vegetables in a soup, but rather it is like the very concept of that soup”.
Wagner (1993)

"Individuals have different palates and this will influence the cocktail of ideas they hold – some people will order from the menu, some will customise their meal. Some people prefer simplicity, whilst others embrace contradiction. Personal preference dictates that some ideas are more palatable than others, and this is due to whether the taste enhances or aggravates the existing stock."
Evans (2007)

Ideas=chandeliers baby!

[Steve Miller]

I recently had an editor tell me that "writing about immigration is like baking a souffle." I still have no idea what she meant by that.