Post Keynesianism Does NOT Explain This Crisis!

It has become somewhat popular to suggest that our current world financial problems vindicate heterodox economic theories --- in particular post Keynesian theories of financial instability.  I hope readers do not get me wrong with this post --- I am an advocate within the economics profession of methodological pluralism and for a diverse and vibrant intellectual and policy discourse.  In short, while I deny that I am a heterodox economist, I do think the heterodox movement is worth supporting. 

But I also think that there are right and wrong answers to complex questions.  Minksy, for example, once argued that the right "institutional structures" are required for markets to work effectively, but he also argued that we needed "apt intervention."   I can agree he was on the right track with the first statement, but I would argue he was overconfident in the second because he didn't fully grasp the epistemic and incentive issues involved with the task of intervention let alone comprehensive planning of financial markets.  Fundamentally, the Keynesian assumption that the state is in a better position to assess the marginal efficiency of capital investments is flawed precisely for the Smithian/Hayekian reasons I have pointed to on this blog multiple times in the past.

The post Keynesians in my mind often pay lip service to the epistemic issues that Hayek raised, but not really. And they are often completely innocent of the public choice incentive issues in public policy, though they often rail against the political process under monopoly capitalism.  Here is the problem -- we should demand behavioral symmetry between politics and economics.  The same epistemic and incentive assumptions we make for actors in the market should be the same we make for those in politics.  If political actors are omniscient, then economic actors should be omniscient; if market actors are plagued by uncertainty, then political actors should also be seen to be ensnared in uncertainty.  If political actors are viewed as paid off by rich businessmen under monopoly capitalism, then political actors should also be viewed as up for sale under social democracy; if political actors are instead self-less saint like characters in social democracy, then they should be viewed that way under monopoly capitalism.  Behavioral symmetry doesn't mean outcome similarity.  Outcomes are a function of differences in the institutional structures.

This is a fundamental Buchanan point, but also one that Hayek stressed in works such as The Constitution of Liberty.  There is a difference between play within a given set of rules, and changing the rules of the game.  Between policy and politics is how Buchanan put it.  Post Keyensianism doesn't have this distinction.  Depsite the talk about "institutional structures" the emphasis is on "apt intervention" and the core assumption as Keynes argues that if the right people were in power then the sort of cautions Hayek raised in The Road to Serfdom.

So back to the current crisis.  The current financial fiasco is not a consequence of market instability, but because of the inability of government to engage in "apt intervention" due to knowledge and incentive issues, and that in reality it is nowhere as dangerous as in the hands of politicians who presume they have that knowledge to effectively tackle the problem that they in fact do not. Since they don't have the knowledge required but must act as if they do, they will instead respond to political incentives of the election cycle and their ideological whim.  When you breakdown the "institutional structures" of an economy to engage in "apt intervention" when you cannot "aptly" accomplish what you plan to do, then don't be surprised when things go crazy.

This isn't libertarian, this is economics.  The epistemic turn in economics that Hayek forged, and the public choice turn in political economy that Buchanan forged, provide us with the appropriate tools to understand the dynamics of interventionism and why the instability introduced through failed intervention tends to be met by every increasing attempts at "apt intervention".  Rather than policy, we need politics --- changes in the rules that are consistent with the "generality principle."

Comments

[Adam Martin]

Regarding my paper on the relationship between Austrians and heterodoxy (link below) one of the referees made an interesting point that I think is relevant:

My paper argues that neoclassical economics is the economics of scarcity, and Austrian economics is the economics of scarcity + uncertainty. The referee said it was worth thinking about that post-Keynesian economics is the economics of uncertainty but no scarcity. That appealed to me, because it is, after all, Keynesian.

link to paper: http://www.adamgmartin.com/Site/Working%20Papers/F0AC4634-2009-428B-A486-FBCA8A4669B1_files/AustrianParadoxDL.pdf

[Poohbear]

I can understand you Austrian economics guys' frustration. When the this crisis comes you thought your school is finally vindicated, but seems all 'attention' is stolen by 'Minsky Moment'. I read through the paper you provided but I don't think you provided any coherent explanation on the cause and feasible solutions to the problem. You are say your theory has nothing to do with politics, but in my opinion, if the mainstream economics is 50% ideology plus 50% science, Austrian is 100% ideological nonsense.

[DPrychitko]

Poohbear: Clearly demonstrate to the rest of us your claim.

[Ludwig van den Hauwe]

Well, I don´t understand why they didn´t put your name on the list of those heterodox economists on the HETecon website...

[Peter Boettke]

Ludwig,

For the simple reason that I do not consider myself heterodox, and do not sign on to heterodox movement stuff when asked. I support heterodox activities, but I consider myself a slightly out of sync mainstream economist. I came to this position in my mind during my period at NYU. I understand where I stand in the orthodox community -- not very high. But that is the game I want to play --- even if I am trying to play it on my own terms rather than theirs.

Pete

[TGGP]

Dain gives some evidence we shouldn't equate profit-sector and government agents that way here:
http://dryhyphenolympics.blogspot.com/2008/05/public-choice-theory-takes-minor.html

[David]

The statement "The same epistemic and incentive assumptions we make for actors in the market should be the same we make for those in politics" may seem reasonable, but it should be considered controversial. Of course, the epistemic problem pertains no matter what the context, but why assume that the incentive assumption should be the same.
I know this is the public choice view, but what if the "utility function" changes when an individual moves from the economic to the political sphere. In other words, since the institutions of society encourage profit-seeking in markets and "social progress" in politics, is it not possible that individuals try to adjust their objectives to what they think is appropriate for their role? The Hayekian knowledge problem remains, but the cynical public choice view of politicians and bureaucrats attempting to maximize some combination of wealth and power is a questionable assumption. There might be some politicians who behave the same regardless of the context (ie opportunists), but why deny the possibility of personalities that are influenced by context/institutions?

[Peter Boettke]

Folks,

Incentives are different from motivations. The simple point is that human actors are purposive agents whether they find themselves in the market, in Church, in politics, in school, in dating, etc. Even the most ideological person you meet will want to pursue their ideological agenda as effectively as possible. But the INCENTIVES to be careful in their efforts to be effective are context dependent as is the useful knowledge they acquire and employ in pursuing their goals.

In this sense, rationality is universal, but the manifestations of rationality vary depending on the context of action.

The criticisms of rational choice politics often get confused about this basic issue --- this is true for Green and Shapiro, and also Jeff Friedman. Please do not misunderstand me, I think the critique of certain renderings of public choice are vulnerable to the operational criticism that these guys go after.

But the practical point is very simple --- if we turn over the investment decisions to government officials we ought to, as a methodological principle, not fall into the trap of assuming that intending to do well will actually be able to do well.

Pete

[matthew mueller]

Professor Boettke has written an interesting post, and I am glad that he took the time to write it because very few Austrians put their movement in the context of the economics profession more broadly. The first problem Austrians face is whether to identify with mainstream or heterodox economics. F A Hayek would have identified with mainstream economics, while Ludwig Lachmann would have indentified with heterodox economics (in fact, most of his writings were "Hayekian" responses to Post Keynesian Economics). The trouble with the position Professor Boettke is advancing is that I strongly believe it will undermine Austrian economics. Most Austrians look to Public Choice theory and Monetarism on most economic matters; the problem is that the discussion from these quarters have overwhelmed any unique Austrian interpretation old Austrian economics could bring to bear on these problems. Now Professors Horwitz, Boettke and Prychitko are still part of that venerable old tradition, and Professor Horwitz in particular has done some wonderful work connecting uniquely Austrian themes to more Public Choice/monetarist economic problems. But these guys are going to retire soon, and in their place will be people like Leeson, Coyne, Stringham, and Powell. Now these guys are GREAT economists; I am not denying that. But they are not Austrian economists. I remember very well the controversial post Pete Leeson put up here some time ago telling Austrians that work in "the history of economic thought" is not important, and that discussions of capital theory are irrelevant. Wow! Woe to the future of Austrian economics! But such is the fate when we send our brightest PhD students to a Public Choice economics program. Now Professor Boettke will disagree with this. But in my opinion, Austrian economics is far more unique than Public Choice theory. The epistemology of Austrian economics is much richer than anything Public Choice theory could create. In fact, Public Choice theory is paralyzed by all the limitations mainstream economics faces because it is just an application of mainstream economic theory to the area of politics. Take away Hayekian knowledge problems, and what has the new generation of Austrian economists given us in the way of positive contributions? Very little, I would argue. Austrian economics in the next 20 years will become Hayekian knowledge problems combined with Public Choice (i.e. neoclassical) theory. Something needs to be done fast!

The only alternative as I see it would be to identify more closely with heterodox economics. Now this will be an uphill battle, but it will be well worth it. In sticking to the current course, we run the risk of abandoning the uniqueness of Austrian economics. Heterodox economics will provide us sufficient scope in preserving this unique Austrian tradition. Younger Austrian students need to learn heterodox economics. And a lot of it is flawed! Their politics is painfully naive! I want to scream Hayek! Hayek! when reading them, but they are damn good economists. Just read Nicky Kaldor and Paul Davidson.

My point is this. And this gets to the heart of Boettke's post. In pointing out the flaws of the market, we need not posit any positive theory of government. Professor Boettke does not seem to understand this point. We can read chapters 3, 11, 12 and 17 of Keynes' General Theory without EVER having to speak of what government MUST do to cure depressions. All we need to do as heterodox economists is offer explanations as to why markets are unstable. In fact, what Austrian economics does is show us the flaws of central planning via regulatory agencies; and what Post Keynesian economics does is show us the inherent instability in free market capitalist economies. They are not mutually exclusive. They complement one another rather nicely. This is the direction we should be moving in. Post Keynesian economics has much to offer us. And pointing to their "innocence" of F A Hayek as a reason for ignoring their more positive contributions to economic theory strikes me as seriously unfair.

[David]

Point taken. But the basic incentive for politicians is the number of votes, which points to the importance of the marginal voter etc. But what if the marginal voter is him/herself influenced more by perceived long-term "social welfare" rather than individual (expected) wealth maximization. True, the marginal voter may still have a mistaken understanding of economics, but on the other hand it's possible that s/he infers that "I don't understand economics, but I will vote for the person who hires the most respected economists as advisers." The problem would then be that the most respected economists are not Austrian economists (according to some people here), which is not a political problem, but a problem in academia.

Matt,are you serious when you write that Boettke, Horwitz et al. are going to "retire soon"? If they are like Hayek, someone like Horwitz is going to publish his last book in about 45 years, when you may be tending your flowers in Florida.

[Peter Boettke]

Matt,

You have not taken Buchanan's writing on seriously I would argue if you believe that public choice theory is not epistemologically interesting. Furthermore, I would recommend to you Vincent Ostrom's The Meaning of Democracy and the Vulnerabilities of democracies (Michigan, 1997). Ostrom points explicitly to a political science that focuses on epistemics. Paul Dragos Aligica and I have a forthcoming book on this stuff with Routledge --- should be out next year, final version to the publishers this spring.

Second, public choice theory is a positive theory of government, not a normative theory. And to David -- the problem he raises is the point raised by Bryan Caplan in The Myth of the Rational Voter, and it is also a positive theory of government, not a normative one.

Third, the points Matt raises from the General Theory about the problems with the market are only problems from an Austrian point of view IF you don't have the an economics of relative price adjustments to see how one moments "inefficiency" leads to entrepreneurial profits which are realized in the next moment. See Kirzner's interview with Stephan Boehm in Review of Political Economy, and the paper by Lesson, Coyne and myself in the same journal on "Does the Market Self-Correct?"

Finally, on retirement --- I am not 50 yet and do not plan on retiring ever. I do agree that science progresses via tombstones to a significant degree. But I also think Matt is making several mis-statements in his post. Most glaring ones to me are: (a) Austrians turn to monetarists and public choicers when push comes to shove; (b) the public choice cannot be looked at through an Austrian lens; (c) that Post Keynesians such as Davidson and Kaldor are damn good economists ; (d) that Ludwig Lachmann spent most of his intellectual energy responding to post Keynesianism; (e) that take away the Hayekian knowledge problem and the new generation of Austrian economists have given us very little. Each of these claims is as wrong as the statement that I am going to retire soon. It is not that Matt has an alternative reading, he is WRONG on the basic facts of the matter.

You read into people what you want to read, rather than what they actually have argued. I strongly encourage you to read Adam Martin's paper that was posted. Austrian economics as I wrote in my post is in the unique position of embracing the heterodox problem situation, but through comparative institutional analysis and economic analysis of relative price adjustments, demonstrates the systematic tendencies to orthodox conclusions concerning optimality, efficiency, and equilibrium.

Contemporary Austrian economists have made contributions to methodology --see not only Lavoie, Caldwell, and Prychitko, but also the piece by Leeson and myself on "Was Mises Right?" in Review of Social Economy; and the contributions by Coyne and myself on "When philosophy meets economics" in the Econ Journal, or on "Methodological Individualism and spontaneous order" in JEBO. Contemporary Austrian economists have made contributions to theory of the market and price system -- see not only Kirzner and Esteban Thomsen, but Frank Machovec's Perfect Competition and the Transformation of Economics; David Harper's two books on entrepreneurship and the market process; the paper I mentioned by Leeson, Coyne and myself on does the market self-correct, but also my paper on "Economic Calculation: The Austrian Contribution to Modern Political Economy" and also "Where Did Economics Go Wrong?". Contemporary Austrians have made contribuitons to monetary theory --- see not just Garrison and White, but also Selgin, Horwitz, etc. Contemporary Austrians have made contribuitons to capital theory --- see not just Kirzner and Garrison, but also Lewin's book and also Howie Baijter's book on software and capital, etc. How about Roger Koppl's work on Big Players, or his call for BRICE among younger scholars in Austrian economics? How about Dan Klein's work on multiple-selfs, or his earlier work on reputation mechanisms within a free society, etc.?

I could go on, but the main point is that I think Matt has the scholarly equivalent of champaign tastes on a beer budget --- in this case he pronounces a senior scholar assessment based on a limited (though admittedly impressive) undergraduate reading of economics.

I was there once, so I don't fault him. I once made a statement to Israel Kirzner when I was a recent college graduate about "we" Austrians having such a difficult time --- he looked at me in a rather strange way as to suggest "we?". I mean who was I? Steve Horwitz once remarked to a bus of leading libertarians that with them on the bus and HE on the bus, if something every happened the future of libertarianism would be loss. I think he got a similar reaction. We have been there, but thankful the internet and the blogosphere didn't exist for our youthful silliness to be on a permanent record.

Matt --- you cannot really pass the sort of judgements you do until you have made your way through a PhD program, tried to publish in the journals and made your way as an economist in this profession. Until you do that, there is a very real sense in stating that you are spouting uninformed nonsense. You are just learning --- hopefully you will contiue to learn (as we all hope we do) throughout your career as a scholar. Perhaps after learning price theory, you will continue to think post Keynesians are the better economists than say an Armen Alchian or an Axel Leijonhufvud; or an Andrei Shleifer or an Ed Glaeser. If you do, then you should become a post Keynesian heterodox thinker. Or perhaps you will think that older institutional writers such as Veblen, or more contemporary institutionalist writers such as William Dugger, are more insightful than North or Williamson; Ostrom or Hayek; Coase or Demsetz, etc. If so, then become an old institutionalist within the heterodox movement.

Here is an interesting fact -- many post Keyensians also indentify with old institutionalism. What do you make of that? Perhaps the fact that both reject the pure logic of choice, and the economics of relative price adjustments might explain that. And when you look at it that way, you realize that it turns out to be a rejection of economics as a science. The teachings of Adam Smith and David Hume, the teachings of J. B. Say, the teachings of Mises and Hayek are all rejected.

You can hold that position if you want, but understand the stakes prior to pronouncements --- and in order to understand the stakes you cannot do so from the perspective of an undergraduate; study hard, get into a PhD program IN ECONOMICS, learn economics inside and out; teach economics to undergraduates and graduate students; focus on figuring out how to best advance your agenda within an economics profession; and then --- and only then --- will your pronouncements have substance and force.

Right now they remain judgments made by a smart and perhaps clever undergraduate who has engaged in a serious self-study of heterodox economics. Finish your formal studies at Wash U, take the GRE, get into the best PhD program you can get into that will pay your way, and study economics rigorously. Start the process of becoming an economist and live in that corner solution for years. Then talk to Leeson, Coyne, Stringham, Powell, etc. They are your contemporaries more or less (that same way at least that Mario Rizzo, Don Lavoie, Larry White, Peter Lewin, Bill Butos, Joe Salerno and Roger Garrison were both mentors and contemporaries of mine).

Pete

[Steve Horwitz]

"Matt,are you serious when you write that Boettke, Horwitz et al. are going to "retire soon"? If they are like Hayek, someone like Horwitz is going to publish his last book in about 45 years, when you may be tending your flowers in Florida."

Thanks David. I love the image. (Ask Pete about the irony of the image in that I'm NOT the one retired to Florida. ;) )

And to echo Pete's point: I'm 44, so I'm at least 20 years from even contemplating "retirement." And retirement from teaching is hardly retirement from actively producing scholarship. So sorry Matt, you're gonna have to put up with me/us for a few decades more.

[Ian Dunois]

Matt,
Unfortunately the Public Choice Outreach has come to a close this year, but I must recommend that you attend it next year. It is a rather short seminar but with the schedule you receive it is rather invigorating. Unfortunately Gordon Tullock has left the halls, ( http://www.gordontullock.com/ ) but he used to attend the seminar which is traditionally opened by Buchanan. It is a rather small seminar allowing you to have more time to discuss issues with professors and grants you the ability to meet others who may be raising the same questions.
I would also like to add that Tullock was greatly influenced by Mises and so we can easily find a tie b/w Austrian and Public Choice.
What Tullock and Buchanan contributed to the study of economics is so intense that we look back at it now as if we had known it the whole time.
Tullock boxes are everywhere; politicians seek forever to either find or convince others that they have found the Holy Grail or public good in order to extend their control, and politicians/bureaucrats/lobbyists are just as selft interested and rational as an individual within the market. None of this btw is mainstream. This is public choice economics.
I am sure you read Atlas Shrugged, check out Caplan's Public Choice essay on Atlas. At least it may be a start.
http://www.gmu.edu/departments/economics/bcaplan/rand.doc

[matthew mueller]

Dr. Boettke,

I agree that I will look back on this post in 8 months and regret a lot of what I said, even though I think I am correct in my assessment right now. That is learning. I enjoy reading, and I really enjoy talking about what I have read with you, Horwitz, and others on this blog. Very few professors would give an undergraduate the time of day, and I suppose I have made a home of this blog because it serves as an intellectual outlet for my most recent readings. Interestingly, they have been in the area of Post Keynesian economics (with Austrian economics serving as my base).

Now if you say that I am not qualified to speak because I am still an undergraduate, I would just respond by reminding you where we are talking. It is a public blog, a public forum. The qualifications are very different on blogs. I can speak on here very differently than if I were to go into Professor Benham's or North's office and say that NIE has Ronald Coase all wrong. I would look like a silly undergraduate. But if they created a blog I would do so, and arguably look less silly. So I would urge you to remember that this is a public forum for Austrian ideas.

Ok. That is out of the way. I haven't just read heterodox economics. I have read others, like Alchian, Demsetz, North, Williamson, very seriously and think I understand most of what they are saying. They are powerful thinkers. William Dugger, for example, is nowhere near Harold Demsetz when it comes to their intellectual powers. But I still think William Dugger's work is very interesting. If you use Austrian economics (or Public Choice) as the standard by which to measure the contributions of other thinkers, then of course you will see that others fail to understand "Kirznerian entrepreneurship" and "Austtrian relative price adjustments." But these economists are concerned with different things. Economics is a vast field.

So when it comes to "price theory", Leijonhufvud and Alchian are damn good economists. But when it comes to liquidity preference and the essential properties of money, Leijonhufvud has missed the boat. It depends on the questions that currently interest you. I was in love for a couple of months with Alchian and Demsetz. I had their books by my bed. But love intersts die quickly in the world of ideas. There is so much out there. It is best to do with Alchian and Demsetz what you will, and then move on.

And let me quickly say one thing about my retirement comment. If you read my post carefully, I was implying that the longer Boettke and Horwitz remain in action the better it is for Austrian economics. I deeply appreciate and admire their work. They are real Austrian economists. I am not waiting for you guys to die. I want you guys to keep writing. That was my point. MY concern is with, say, Pete Leeson taking over Professor Boettke's chair at GMU and being regarded as the "leader" of the Austrian school; again, not because he is not a good economist, but because he is not really an Austrian economist, despite his co-authored methodological papers with Professor Boettke. He is really a development economist who knows his Hayek.

And yes, Post Keynesianism has identified with Old Institutionalist economics largely because they both reject mainstream neoclassical theory. This point has been made by J.E. King in his history of Post Keynesian economics book. But that does not make either school unscientific. They have labored very intensively to contstruct an alternative and positive theory of economics.

Economics is a rich and vast field. To call others unscientific because they do not understand (or accept) the power in relative price movements or Austrian entrepreneurship is not very fair (in my untrained and ignorant undergraduate mind).

[Scott]

Peter,

I think you have a dangling comment in your post

"... Depsite the talk about "institutional structures" the emphasis is on "apt intervention" and the core assumption as Keynes argues that if the right people were in power then the sort of cautions Hayek raised in The Road to Serfdom."

Do what? You didn't finish the thought ...

[Steve Horwitz]

Matt wrote:

"But when it comes to liquidity preference and the essential properties of money, Leijonhufvud has missed the boat."

And that, to use a common phrase, is where I stopped reading.

You think he's missed the boat? Write it up and send it to a journal Matt. Until then, it's just you lowering your internal body pressure.

I'm pretty sure that ol' Axel has not missed the boat on the essential properties of money. Pretty sure indeed.

Seriously Matt, if you want people to treat you with any respect, you're gonna have to stop making these arrogant snap judgments about economists who have spent decades studying what you've studied for just a few years. That arrogance is not becoming in younger scholars and makes established scholars lose their patience, as both Pete and I have done here.

[Richard]

"It is not that Krugman's work is entirely without merit, but it always had major problems with it"

As Prof. Horwitz would put it, "write it up and send it to a journal Dr Boettke"

[matthew mueller]

Richard,

I am thinking the same thing. A lot of the comments made on this blog (including mine) read as assertion only.

But Professor Horwitz and Boettke seem to believe that my assertions are arrogant because I had the poor fortune of being born 35 years after them.

Look, I know you have had the opportunity to study this stuff for more years than I have, but that doesn't mean your interpretation is more correct than mine (it is just more authorative). Look at Keynes' 1936 book. All the great economists --- Pigou, Robertson, Hawtrey, Frank Knight, Schumpeter, and Viner --- blasted it. Their reviews were very hostile. But the younger economists at that time were very excited about it --- and then came the Keynesian revolution. If only the established scholars had had their way! They would have saved us Austrians a whole lot of trouble!

And I am not claiming originality in anything I say. That liquidity preference comment has been borrowed by Paul Davidson. I would never claim to be attacking Leijonhufvud. I am simply pointing out that Paul Davidson HAS attacked Leijonhufvud, and I think that his criticisms have considerable merit.

And for the record I have several articles being reviewed in journals right now. My fear is that once they find out I am an undergraduate they will refuse to publish them. How do I begin to establish a publication record if I am not given the opportunity? Do I have to wait til I get my PhD?

[Steve Horwitz]

Matt,

The point is not that you are arrogant because you were born 35 years too late. The point is that you are arrogant because you haven't studied these issues with the depth and time that serious scholars, such as Leijohnhufvud have (never mind me or Pete).

You are convinced your interpretations are right. We are convinced they are wrong. Yes, you might be right and we might be wrong, but the point is twofold:

1. Our decades of study would suggest, all other things equal, that we are more likely to be right about this than you. It's not about ability, it's about having studied, read, thought about, and been exposed to multiple arguments that give our interpretation more prima facie credibility than yours. Yes, we still could be wrong, but...

2. Your tone of certainty and dismissal is what's really at issue here. You have every RIGHT to your own opinion/interpretation, but you also have the RESPONSIBILITY to recognize your own limitations and that those you are criticizing have track records and reputations that give them prima facie respectability. If you would only show some damn humility in the face of that and temper your broadbrush dismissals with some recognition that these issues are very complicated and that those with years of study might well know something more about them, I think I'd not get so frustrated.

As for those journals: don't assume you'll get rejected because you're an undergrad. Tyler got into the AER as an undergrad. If you do get rejected and you believe it's because you're an undergrad, you'll be missing what are probably the substantive criticisms of your work and will turn into a whiner about how the journals are prejudiced against undergrads and ones critical of Austrians at that.

That's not a good way to go as a scholar. Don't fall into the trap of blaming other people for your lack of success, or for assuming mendacity when your own lack of ability or sound argument is sufficient.

A little bit of humility and self-reflection will go a long way. I ought to know - I was an arrogant bastard in grad school. I'm only slightly less so today, mostly because now I know I was right all along. ;)

[Pete]

Hide the women and children, Matt. I'm coming . . . and I'm bringing the pure logic of choice (gasp!) with me.

PS: Do you really not see the problem with explicitly distinguishing between "good" economics and "Austrian" economics?

PPS: It's certainly possible to publish as an undergrad if you have a contribution. Others have done this. No one cares about what stage of school you're in. Everyone cares about contributions.

PPPS: If your papers aren't accepted you'll be tempted to interpret this as the world not recognizing your genius (or as slighting you because of your undergrad status). Resist this urge and entertain the possibility that what you thought was a contribution isn't one.

PPPPS: The pure logic of choice doesn't make one less Austrian. It makes one an economist.

[matthew mueller]

Professor Horwitz,

Points are well taken. My initial response to Professor Boettke was intended to argue for the importance of pluralism in economic thinking, e.g., my defense of serious study of heterodox economics. Somewhere along the way the discussion got personal and my lack of training was made the main issue, so that the ideas I was defending hinged on my reputation and educational background.

Perhaps I should not try to carry such a heavy load at this stage of my career. I just feel passionately about these ideas, and get very excited when I read them.

I do not want to come across as arrogant or certain in my abilities. I just want to encourage young Austrians to give more thought to studying heterodox economics. That is all. I don't want all young Austrians to end up like Pete Leeson. That may be arrogant, but that is what I believe. I want young Austrians to feel like reading widely is a virtue, and that it is not wrong to challenge core assumptions, e.g., demand curves slope downward. That is the message I want to present. And I would hope that I could present these views without being asked to provide my .cv in advance.

But your points are well taken Dr. Horwitz. I still have a lot to learn and am certain that my views will change in the next couple of months. I apologize for having offended you and Professor Boettke.

[matthew mueller]

Oh, and one point, because I do not want to be misunderstood. I know perfectly well that my ideas are not genius. They are actually quite amateur. Without Davidson, Lachmann, Shackle, Hayek, Mises, etc. I would be nothing. I would be a computer technician. So I am fully aware of my own limitations in this respect and recognize that my journals can be rejected because they fail to make a contribution.

My point was that once the journal DID accept my paper and then asked for biographical information, they would then say that their prestigious journal typically does not publish undergraduate material. That is my fear.

[Steve Horwitz]

Scary when Pete and I say the same stuff without prior coordination. :)

And Matt, I've heard the apology before. The problem is that you come back and do the same things again. Let's see if it can stick this time.

[Ian Dunois]

Matt,
You had said, "It is a public blog, a public forum. The qualifications are very different on blogs." This is true, but this is not your blog. Your dominance in the comments section has caused many people to contribute less. They don't want to enter into an ongoing debate.
You have a lot of ideas and you want a place to put them together and receive feedback, but you can not use this blog as your source. You can create your own blog. It may take a little while to get some readers, but I think many people are curious at what types of ideas may be flowing through your head and will read your blog already. The blog would be a helpful tool as to let you know which ideas are more thought provoking and original than others. I once thought I had a vast amount of new ideas and now find that I have a quiet blog with hardly any entries as the thoughts I thought were original were already written and I was just reiterating them.
Can also create a small group at your university. It may not be Austrian persay but at least it is an outlet for you to bounce ideas off of individuals. The Mises Institute website has forums for those inclined to discuss certain topics, which may be good for you as their network has grown considerably.
You read alot and have new ideas springing after each page, use these outlets rather than hijacking this blog and changing the discussions within the comments.
http://austrianforum.com/index.php
http://www.blogger.com

[Steve Horwitz]

Let me also add that the fact that this is a blog does not reduce how silly and wrong people look when they say things such as Leijonhufvud has missed the boat on the essential properties of money. To paraphrase Pete on Keynes:

It's wrong in North's office, it's wrong in Boettke's office, it's wrong at the bar, and it's wrong on a blog.

Period. :)

[Rafael Guthmann]

Ian
I have a blog too, it is in Portuguese so I think that nobody here will understand it. It has about 50 entries a day, that must be what, 1% of the traffic of this great blog, my favourite blog about economics in the internet and about 0.1% of the volume of traffic in marginal revolution. Anyway, what I think i write down on that blog, I have about 70-80 pages of text about my amateur thoughts about economic theory on it.

That "austrian economics" forum is pretty much death right now, I posted there some time ago, when there was about 2-3 posts per day. The Mises.org forum is very active, but its discussion quality is very low.

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The positive contribution of post-Keynesian economics has extended beyond the theory of aggregate employment to theories of income distribution, growth, trade and development in which demand plays a key role, whereas in neoclassical economics these are determined by the supply side alone.

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Some post-Keynesians took an even more progressive view than Keynes with greater emphases on worker friendly policies and re-distribution. Robinson, Paul Davidson and Hyman Minsky were notable for emphasizing the effects on the economy of the practical differences between different types of investments in contrast to Keynes more abstract treatment.