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Nice observation Pete! Summers’ latest “defense” of administration policy drove me back to re-read Schumpeter. Schumpeter said in 1949:

“The best method of satisfying ourselves how far this process of disintegration of capitalist society has gone is to observe the extent to which its implications are being taken for granted both by the business class itself and by the large number of economists who feel themselves to be opposed to (hundred per cent) socialism and are in the habit of denying the existence of any tendency toward it. To speak of the latter only, they accept not only unquestioningly but also approvingly: (1) the various stabilization policies that are to prevent recessions or at least depressions (that is, a large amount of public management of business situations even if not the principle of full employment); (2) the "desirability of greater equality of incomes," rarely defining how far short of absolute equality they are prepared to go, and in connection with this the principle of redistributive taxation; (3) a rich assortment of regulative measures, frequently rationalized by antitrust slogans, as regards prices; (4) public control, though within a wide range of variation, over the labor and the money market; (5) indefinite extension of the sphere of wants that are, now or eventually, to be satisfied by public enterprise, either gratis or on some post-office principle; and (6) of course all types of security legislation.”

Buchanan is interesting, though I think it would be important to emphasize the effect of bias, bureaucratic access to information and ideological commitments as interpreted through these factors. Much of it has nothing much at all to do with direct self-promotion. In fact a resistance to bribery, firm ideological standards etc. can actually make the economic situation more desperate. I am not saying Buchanan would deny this, just that many people influenced by public choice seem to forget it.

That's an excellent quotation Sleeper, Schumpeter always had a knack for quotable passages.

Libertarian political economy has always struck me as being a little simple. It is satisfactory enough, and is certainly congenial to the anti-state outlook, but the matter becomes complicated when these books are read alongside alternative approaches to debt and finance. I think Austrians desperately need to consult the Chartalist approach to money. L. Randall Wray's book "Understanding Modern Money", and Basil Moore's "Horizontalists and Verticalists" is essential reading. Lachmann tried to confront this literature, but other Austrians have remained perfectly stubborn on these questions.

Larry White is the Austrian leader on monetary economics, and I tried on several occassions to get him to comment on this literature, but he always dismissed it as being misguided and incorrect. Lachmann, even though he probably thought the same thing, would never countenance such an attitude.

Studying libertarian political economy is like living in a little bubble. One reads Rothbard, and then takes a break by visiting the latest blog post by Rizzo or Horwitz. But there is so much else out there, and I think Mr. Boettke's time would be better spent directing his students' to alternative approaches to money and finance. It seems like Austrians are more interested in converting their students to the libertarian cause than in actually educating them in the complicated literature that is economics.

Matt,

I wonder why you never consider the idea that individuals have read the Post Keynesian (and earlier manifestations) of a literature in economics but made a judgement that it was not correct. You reference modern post Keynesian literature as if nobody in the Austrian camp has read this stuff, and then just declare that the Post Keynesians win.

White, Garrison and Selgin are trying to relate their work to a more mainstream literature than the heterodox writings of Post Keynesian thinkers. I don't think you can fault them on this.

Simple thinking does not necessarily mean simple-minded. If Keynes was wrong on the monetary economy, then Post Keynesian marriages of Keynesian ideas with pre-Keynesian monetary quacks to form a new state theory of money doesn't appear to be very promising.

Disagree if you are intellectually compelled to, but this is not an issue of ideology (your favorite word for explaining disagreements). It is instead a question of logic and evidence. Deficits lead to accumulated debts, and the need to monetize those debts to meet obligations lead to debasement of the currency. All the discussion of debt/credit networks doesn't stop this.

All this talk about living in a little bubble is not only inaccurate, but intellectually insulting to those who are actively engaged in the professional activities of being an economists (no hyphen). We present our work at conferences, we submit our work to critical review, we give presentations at various universities, we teach students, we see our students in turn go through this similar process, etc., etc. Tell us all WHY you are not attending UMKC, where you could in full freedom seriously study the Charalist approach to money, the philosophy of science, and heterodox approaches. Something doesn't sit right. You are clearly interested in heterodox economics, you graduated from a decent school with the appropriate background, but rather than really commit yourself to this set of intellectual activity, you choose to do "hit and run" intellectual activity via the blog.

Go to UMKC, or even better yet Cambridge, get your PhD, write serious papers and books, and then change the intellectual world. Repeating the reading list of heterodox economists doesn't suffice. Why? Because many of us have in fact studied various heterodox and orthodox theories and made our judgement that the logic and evidence point in this or that direction of what theories are right and which ones are wrong.

My own personal opinion is that there are elements of heterodox thought that are useful to think about, but many other elements which are just at odds with the best thinking in the discipline from Hume and Smith up through to Mises and Hayek. In some sense, this makes me a very "orthodox" thinker, who fundamentally disagrees with many "heterodox" ideas. And it is an irony that modern Austrian economics is characterized in the JEL codes under the heading of heterodox economics (B53). But this is an artifact of the current sociology of our profession, rather than fundamental intellectual position on the substance of economic theory.

Is MGM Matthew Mueller? Has the "Post-Austrian economist" returned?

"Is MGM Matthew Mueller? Has the "Post-Austrian economist" returned?"

If he has, he should put his blog back online. Some of us didn't finish reading it!

Is MGM Matthew Mueller? Has the "Post-Austrian economist" returned?"

Back by popular demand! All of the emails I have received have been very encouraging, and I am working hard to get the blog back up. I would like to prevent, if I can, the influence of these wizened old scholars on the youthful and exciting idealism of the younger generation. Austrian economics is far too rich and insightful to be handed over to monetarism and libtertarian political economy.

And the academic world is difficult. One has to flatter, conform, and submit, if one is going to succeed in this type of environment. That is why I don't think I would do well in a PhD program. I tried to engage academics at my undergraduate institution, Washington University, but I had people like Lee Benham and Itai Sened run me out of their offices on several occassions for saying that they had Coase all wrong! (Douglass North was far too old to be so rash!) But in the classroom I was far more effective, and I got the students thinking and talking. That is why I am writing these posts on blogs. The students listen, even though the guardians of Austrian doctrine do not. Unfortunately, these same guardians stubbornly watch over the journals as well. I've been to Post Keynesian conferences at UMKC, and was able to meet the scholars that work there, but my impression is that they are even more stubborn and hard-nosed than the professors I had to deal with at Wash U. They are like angry and disappointed leftists, and I don't think they would take too kindly to my interest in philosophy and Austrian economics. Besides, I was there to talk about Shackle, and they either knew nothing about him or disliked his contributions to Post Keynesian economics. Paul Davidson was an exception, of course, and it was a pleasure to talk to him, sort of like a goofy version of the intellectual stature of Israel Kirzner.

So I think I am just going to study in my free time, and contribute articles and ideas when I feel compelled to. Besides, my father said to me the other day that with the money he is going to get from his family, it would be silly for me to work. So why put myself through all that? But the disadvantage of wealth is boredom, so I am afraid you will all have to tolerate my ideas for a little longer, until I move onto something else. And I hope I do! I feel like I have overstayed my welcome!

mgm,

You said that you do not plan to finish formal studies in economics? Why do you think it is so boring to study math and stuff for 4-5 years to not make it worth to enter the academic community?

Here in Brazil it is even more difficult to get decent formal degrees in anything. Someone that is born in a developed country should be thankful of the opportunities available. And I think that someone so interested in economics as you are should definitely get on a phd program.

For those interested in reading my blog posts at Post Austrian economics, I would be more than happy to put it back online, but I am having some trouble. I can email all the posts to someone if they are willing to put it all back up. Email me at [email protected]

Oh man, if he is back I am going to have to start blog reading elsewhere again.

I suppose for those who think they are too rich to pursue an education,(smugness and)pride comes before a fall. Then again, maybe it is just an excuse from someone not capable of completing a PhD.

Matt and others,

Please remember that it is the Austrian School of ECONOMICS. You have to find the discipline of economics fascinating, including the mathematical representations and the statistical testing. Economics is what economists do. Even if you don't particularly agree with what they are doing, you have to find a part of it fascinating. If not, then you will have a hard time being in that profession.

Second, I know Mathew Forstater and others at UMKC, and I find it rather telling that Matt Mueller would say that they are "rigid" and unaccepting of his challenges. The individuals at UMKC (besides Matt also look at Fred Lee) are open minded scholars, who care about scholarship and policy relevance. The idea that they were dismissive of a student with an inquisitive mind just doesn't ring true unless that student behaves in an inapproriate manner. Matt claims to have had this experience at Wash U (among the NIE people), at UMKC (among heterodox types), and among the Austrians types. That is a pretty diverse group of economists all of whom supposedly acted in a manner which was not "serious".

All I can say to that is WOW, that is impressive to have experienced such intellectual rigidity across the board. Could it be that rather than asking questions, Matt decided to lecture these faculty about how they didn't understand Coase, or Keynes, or Shackle, or Hayek, or Mises, and didn't do so in a genuinely scholarly way, but instead in an all knowing fashion? Upon being lectured at, perhaps some of these faculty members might have made the decision that further interactions might not be as fruitful as interactions with others.

See in general academic economists and scholars in general are intellectually curious people. They want to figure things out, and they like to argue about the figuring out of things. They read widely, think hard, and write up their arguments in a way to persuade their peers. They also love their subject and want to get others to think about issues with them so as to join them in the quest. Matt has even heard me talk about this idea of the "invitation to inquiry', rather than the conversion to a policy catechism. I don't know why Matt keeps claiming that we are doing something different as Austrian economists that offering an invitation to study ECONOMICS and social theory.

I hope students out there reading this realize that Austrian economics as a progressive research program is an invitation to study, not a settled body of thought. I bet that the NIE folk and the Post Keynesian folk would stress that same thing to students like Matt, but somehow he didn't hear that, but instead intellectual rigidity. Perhaps it isn't intellectual rigidity that Matt is picking up on, but the disciplinary logic of economics (of all varieties) that Matt doesn't find satisfying.

BTW, to Matt -- congratulations on the inheritance, but I do hope that you find an acceptable life challenge.

Pete

As I said at FEE last week, Austrian economics is not a liturgy to be preached to the ignorant, but a framework for trying to understand the world by asking the right questions.

I find it supremely ironic that Matt's stance towards the economics profession and higher education in general falls right in line with many commenters I've seen on some recent discussion boards over at the Mises Institute site. Those people ARE guilty of what Matt wrongly accuses people here of: substituting ideology for genuine attempts to understand. I think it says something about Matt's own "rigidities" that he ends up in the same place they do about the enterprise of academia.

I hope students out there reading this realize that Austrian economics as a progressive research program is an invitation to study, not a settled body of thought. - Peter Boettke
But who gets to progress Austrian economics?

I seek truth and understanding. In pursuit of those goals, I have happened upon a set of positions conventionally identified as "Austrian".

If I should develop my understanding and adopt some other positions, have I progressed Austrian economics? Of course not. I am a nobody, an occasional contributor to online blogs, and so it does not matter what I think. If I develop my understanding and move away from the conventional Austrian positions, then I cease to be identified as an Austrian, plain and simple. Only those who, formally or informally, represent the community of Austrian economists can progress Austrian economics, because only when they shift positions will they drag the label "Austrian" along for the ride.

But who cares? Are people in this game to be Austrians, or to seek truth and understanding?

Mr. Boettke,

Yea, the problem must be with me. I don't seem to fit in anywhere. I have done the reading; I have read everything. I have read all of the literature in Austrian economics, so I know what is being said and what is being referenced. I spot gaps and problems, and try to develop them, but no one seems to listen or be persuaded.

Here is what I think are the most important issues in Austrian economics (having read nearly everything important in the literature):

1.) Menger understood economic value as being objective. Value depends not on subjective want, but on the quantity of goods in existence. This can be seen in his fruit trees example, his sailor ship biscuits example, etc. This challenges everything Austrian economics rests on (i.e. subjectivism).

2.) Mises and the logical incoherence of equilibrium. In equilibrium, humans cannot act, because there no longer is any felt uneasiness. Therefore, the market cannot be coordinating and correcting because that would basically amount to an elimination of human action. This also challenges the fundamental beliefs of Austrian economics.

... Well, those are the two most important. I have read the literature. I know what people like Salerno and Hayek have to say about Menger, and I know what people like Hulsmann and Boettke have to say about Mises. What have I done wrong? You guys understand the arguments I have made. I have written them up and submitted them to your journals. What is wrong with these ideas? These ideas are more challenging than anything that has been published lately in the RAE or the QJAE. I just don't understand it. I must see things differently. The problem must be with me.

Other possible research topics:

1.) Spinoza's conception of omniscience is a direct challenge to the economic understanding of equilibrium. According to Spinoza, a person who is perfectly omniscient is the only person in existence (what he calls God), so economic equilibrium is contradictory because there can be no cooperation and exchange if omniscience is assumed. Morgenstern's paper on this subject is therefore completely wrong and mistaken (i.e. there cannot logically be more than one person that is omniscient).

2.) I also think it would be worthwile to synthesize the contributions of Coase and NIE with the work of Paul Davidson (i.e. uncertainty and contracts). According to Coase, contracts exist because of transaction costs, while for Davidson they exist because they help us overcome uncertainty. It would be interesting to tie this literature together.

3.) I also think Lachmann can be used to challenge a lot of the Post Keynesian literature. There is a book containing a series of essays that was edited by Don Lavoie and printed in the Market Process series edited by White and Rizzo (I forget the book's title). But nearly every essay in that book is concerned with Post Keynesian economics (Kaldor, Robinson, Keynes, etc.). I think Austrians should re-read these essays and engage in a discussion with Post Keynesian scholars. Why don't more people read Lachmann? Horwitz and Lewin have, and I have read what they have written, but they haven't developed the ideas of Lachmann at all. (Trust me, I have done the reading.)

4.) I also think people like Machlachlan, Greg Hill, and Ted Burczak have written brilliant critiques of certain aspects of Austrian economics. I think, in particular, that the Machlachan and Hill critique of the effect of saving is the MOST IMPORTANT. According to Austrians, saving leads to a drop in interest rates, making it more profitable to invest. But according to Hill and Machlachlan, this has the certain effects in bond prices and holders that Austrians haven't even begun to consider. For example, Hill kept emphasizing this point in his exchange with Horwitz in Critical Review, but Horwitz never addressed it. Why not???

There are more, but I will end here.

I just think Austrians should be doing different things. That is all.... I have done the reading, and that is my position.

Erm Mr Boettke, isn't Mueller not claiming that no Austrians have read Post Keynesian econ, but rather that nobody will engage with him, to explain WHY they think he is wrong?

To say that Peter Lewin's book on capital doesn't develop the ideas of Lachmann at all seems....well... in error. The same could be said of Peter's other recent writings on capital and on management issues.

If you're wondering why people don't take Matt as seriously as he thinks they should, there's one example of the problem. So is the suggestion that every single economist for 138 years has read Menger wrong.

It also might be the case that there's something about the engagement with smart peers and with mentors that happens during the apprenticeship process of graduate school that leads one to have a more sophisticated reading of the literature. Perhaps even one that is grounded in historical context and the rest of the economics discipline that one can't get just "doing the reading."

Or to put it another way, consider this. Boettke says to Mueller: "I wonder why you never consider the idea that individuals have read the Post Keynesian (and earlier manifestations) of a literature in economics but made a judgement that it was not correct." I think Mueller realises you have made that judgement! But he is arguing for a different judgement. I mean we know many mainstream people have read Hayek and made a judgement.

Either Austrians have answered Post Keynesian alternatives, and you could point him where to read, or they haven't. In the latter case, perhaps his points are so stupid (his comments about Menger seem to fit into this category, but I'm not sure about the rest) that you think they shouldn't even be dignified with a response.

Or Samantha, we've been round and round on this with Matt over the last year or two and we're just tired of it. Many of us have tried to answer his arguments or have suggested he's misread things (or not read things). Like any internet discussion, people get tired of treading on the same old ground after awhile, esp. when many of us have other projects awaiting our attention.

Mgm: "(i.e. there cannot logically be more than one person that is omniscient)."

I think I agree with you on that.

You should read the sf short story "Like Minds" by Robert Reed. It was published in the Oct/Nov 2003 issue of Fantasy and Science Fiction Magazine. It's very interesting for problems like this.

That said if I got a reference of that sort of obscurity on the internet I would never look it up. There again I don't have that much free time.

Matt, regarding the papers you've written. Why not just put them on SSRN or somewhere else online?

Just because someone reads a lot doesn't mean they are well-read.

I really don't like it when this blog degenerates into the Matt Mueller sideshow.

Sorry Matt, but you do not understand economics, you do not understand Austrian economics and your do not understand academia. I agree with everything Pete Boettke says above about academic enquiry and student interaction. And I speak as a economics PhD student in the UK.

Not to distract from the MGM extravaganza, but I have two questions (one serious) regarding the post:

1) serious: other than not having a government at all, does anyone think it possible to craft a constitution for a democratic republic that allows for representation but also genuinely binds in practice the powers of the representatives even against the desires of those they represent? The ninth and tenth amendments to the US Constitution sound rather binding, and yet in practice...

2) and not: Why the mixed metaphors? We have "Don't let the fox guard the chicken coop" right next to a wolf in sheep's clothing; that's laying on the agrarian cliches pretty thick, no?

[I am, of course, no less interested if the answer to (1) is "no. Just no."]

Jared,

First, on the mixed metaphor. I just couldn't find a picture (didn't look hard enough) of a fox guading a chicken coop, so a wolf in sheep clothing just fit for my lazy purpose. Sorry.

Second, the question of finding a binding set of rules if what keeps normative political economists up at night. As positive political economists we see that such efforts at constraint are fleeting --- they will last for a bit, then get broken. The literature in economics and political economy on constitutions as coordination devices and not contracts is critical -- see Russ Hardin's work.

Political economists such as Weingast, but also Acemoglu are examining the constitutional rules that are in operation. So this is an ongoing research program.

But if you look at earlier comments on this blog, I also think that you will see that the positive analysis of the fleeting nature of constitutional restrictions can be helpful to the normative exercise of seeking institutional arrangments which are more binding on the abuse of power. In monetary affairs, this led Hayek eventually to a position for the denationalization of money. In fiscal affairs, I have suggested that the logic of the situation should lead Buchananites to emphasize more fiscal decentralization. Imagine a world, if you will, in which money was out of the hands of the state, and the fiscal system was decentralized. In such an arragment the cycle of deficit, debt and debasement would be broken, and the proclivity of governments to engage in deficit finance to concentrate benefits and disperse costs would be restrained (to a greater extent than now).

BTW, to Lee --- read what I wrote first, it is the Austrian school of ECONOMICS. The idea is to advance ECONOMICS --- which is related to the idea of tracking truth and gaining understanding. You build on Mises and Hayek, if you become unpersauded you move on --- that is advancing truth in economics. Nobody would ever say, lets advance Austrian economics and stay faithful to Austrian economics even if one becomes intellectual convinced that Austrian ideas are wrong. It is precisely because individuals are persuaded that the ideas of Mises and Hayek are right, then they work to advance those ideas.

To Matt Mueller --- many of the ideas that you are raising in your list are nonsense, not sensible positions. This isn't dogmatic, it is a considered judgement. You are reading words, but not understanding what you are reading. This is why learning is often NOT an isolated activity, but a social process of listening, give and take, and re-thinking. You are confused philosophically, you are confused on intellectual history, and you are confused on the logic of economic explanation. I could run into a classroom of Gary Becker's and raise questions. Some of them would be intelligent questions, but other could be really stupid questions. Worse yet, I could also not raise a question, but assert a position to Becker. For example, he could be talking about supply and demand, and I could blurt out, that is the wrong way to think about, you should be thinking about peanut butter and jelly. And when Becker doesn't listen to me, I could walk away and say, jeez, he is rigid isn't he?! Your arguments about Austrian economics are spouting nonsense, and not making critical sense of the material. And judging from the reaction you got from NIE and Post Keynesian folk, it is the same thing on their stuff. Turning pages doesn't mean you understand what you are reading.

So it is time to rethink what you are doing. It is obviously NOT working as an intellectual strategy of LEARNING. It might be entertaining --- I mean look I am so irrational I am actually wasting time writing this rather than completing the paper I have to by the end of the day (BTW, on equilibrium etc.). But I am not directing this at you, but others who might be reading this. When EVERYONE you read thinks you got it wrong, then perhaps you are not really reading, but just turning pages and either are not equipped to learn the material and make a contribution, or just make stuff up because you have no intention of really learning and contributing. You are in this sense, a merry jokester, and not a student/scholar. The blogoshere lowers the barriers for the jokester. And ultimately, those who pay are the teachers who thought this was about learning, and the readers who thought this was about learning. When in reality it was really about laughing at everyone who wastes their time because of your jokes. The Sokal affair on the blog. Everyone always points to the Sokal affair as poking holes in the silliness of post-modernism. And I have to say I agree. But I also always thought Sokal, with respect to the editors at Social Text, engaged in an immoral act of lying in an environment where the presumption was that he was telling the truth. In short, he was a trickster, a merry jokester, that took advantage of an environment where the presumption was that everyone was committed to honest exploration. He tricked everyone that is for sure, but to pull off his trick he lied repeatedly when asked pointed questions by the editors.

Blogs with anonymous posters, a culture of informality in argument, etc. are full of jokesters and potential tricksters. So which is it Matt? Do you want to be a serious student/scholar?; a jokester?; or are you just incapable of following the logic of economic argument in all its varities (neoclassical, NIE, Post Keynesian, Institutionalist, and Austrian)?

I used to think you were a student/scholar, but after hearing you discuss UMKC and hearing you discuss the reaction to your "papers" and then you providing your list, I must say that either jokester or incapable are the more plausible choices.

Prof Boettke,

On the wolf: The question was really just a joke to take the mgm edge off of things.:-)

On fiscal decentralization: I decided to jump on here because this ties in really well with the previous post on a devolution of the U.S. Are there good (or even poor) examples of countries that have fiscally and monetarily decentralized? If so, what were their outcomes? Europe seems to be centralizing slowly, but fiscally is still quite separate (relative to the US, that is).

Jared,

Again look at Weingast's notion of market-preserving federalism and his discussion of the Dutch Republic, the UK and the US.

Also look at Vincent Ostrom's The Meaning of American Federalism.

Pete

The title about the fox guarding the chicken coop is very amusing...:)

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