Surprise in Atlanta

~ Frederic Sautet ~

Today was the last day of FEE’s Introduction to AE seminar in Atlanta. After dinner, Ivan, Paul, and I decided to head for the bar on the 72d floor of the Westin Hotel (where we are staying). Steve went to bed early. Some students were already there and they told the waitress that they wanted to treat us to a round of drinks. When they explained her the situation (that they were students and we were economics professors), she asked: what school of economics? They replied: Austrian school. The waitress (who was a student in her 20s) then said that was great because she was herself a fan of Austrian economics even though she had never studied it formally. She had read The Road to Serfdom. She even asked advice to read Mises. The students were stunned and when the waitress came to take our order and told us the story, we were also stunned. I suspect she was probably more interested in "Austro-Libertarianism" than in Austrian economics per se, but it is still a reason to celebrate.

Now what was the probability in say, 1980, that we could have met a young waitress interested in Austrian economics by chance in a bar in Atlanta? I’d say zero. I don’t know if the probability today is much higher, but it is obviously not zero anymore. Perhaps I shouldn’t read too much into this event, but I think it is very comforting to meet total strangers outside the academic world who know something about AE. Perhaps the current economic malaise has a good impact on the diffusion of Austrian ideas. I don’t know if anyone has evidence of this, but I would not be surprised if the current economic situation was driving people more into Austrian economics than ever before.

Comments

[Lode Cossaer]

I've had similar experiences where I live (the Dutch part of Belgium.) I'm only 21, but have been active in the classical liberal/libertarian movement for over 3 years now. 'We' taught we knew about all the 'libertarian' students in Belgium, because when you google 'classical liberal/libertarian' (in Dutch) you almost always end up on websites connected towards organizations I'm more or less active in. (Yeah; Flanders is small.) But every know and then someone new pops up, who wasn't a part of the formal movement. For example: recently we discovered someone who wrote a Masterthesis on libertarianism and provided a Nietzschean foundation. Also; we have a sort of 'liberal' 'thinktank' who is losing popularity towards the more classical liberal organizations. So I sort of know the feeling; it trully is awesome.

[Adam Metcalf]

hey I'm proof positive that the economic situation has brought people to Austrian Economics. Never heard of it before the bailouts began, which I knew in my heart was deeply wrong. I started discussing these matters with a wider circle of people, discovered one of my mentors at my church was a FEE member, started to look into their stuff and well the light came on.

[VA Classical Liberal]

I travel a lot for work, so I eat out alone a lot.

Over the last couple of years, I've noticed a lot of waiters, waitresses and bartenders are economists in training and many of them are at least aware of the Austrian School, if not full-blooded adherents.

I haven't kept careful count, but my possibly biased view is that that is a big change from 10 years ago. Then there were way more sociology students and even the rare economist thought Hayek's first name was Selma.

[Kurt Parker]

I thought "Austrian Economics" was a hindrance?

[David]

I have a question: what's the difference between "Austrian economics" and "Austro-Libertarianism"?

[Pietro M.]

I fear that Austrian economics is already the most successful economic theory among the amateurs: I'm part of the evidence. Together with vulgar Keynesianism, with its falling aggregates, liquidity traps, broken windows and animal spirits (ok, it's not vulgar: it's really keynesism!), the fact that no equations are involved appears to attract the layman.

Austrian economics, however, is not a mass movement, in which quantity is more important than quality: we need economists, not engineers (like me, but I'm optimistic because Pareto and Garrison studied engineering, too :-D) and agitprops. Knowledge is the least democratic endeavor of human life.

To turn this widespread sympathy among the amateurial masses into a generation of economists capable of innovating the tradition is the greatest challenge. Otherwise, we cannot expect to be considered more than Gesellians, Marxians, and the scores of vulgar Keynesians.

I wish I had studied economics.

[Pietro M.]

David: it's just like believen that the world is flat or not and being pro-fascist or not. The former is a judgement about how reality is, the latter a judgement about what's right or wrong.

Everybody has theories regarding how the world works and values regarding how the world should work. The former is the realm of scientific inquiry, the latter of subjective preferences (conditioned and informed by our scientific understanding of the world, at least hopefully: there are lots of fanatics which are waterproof sealed from facts and logic).

Austrolibertarianism is a kind of political thought - an ideology - which is inspired by the theoretical understanding of markets given by the Austrian School.

The Austrian School, on the other hand, is a group of economists (and non-economists: jurists, political philosophers) whose understanding of the world has many peculiarities, making it a more or less separate school of thought with respect to the rest of the "marginalist" economics schools born 140 years ago in Wien, Lausanne and London.

There is a high correlation between being an Austrian economist regarding the scientific view of markets and being a libertarian as political values, but there are lots of exceptions, as it is natural, considering that the two things are different.

There are non-Austrian libertarians like David Friedman, and there are Austrian non-libertarians like Wieser (socialist), Menger, Boehm-Bawerk, Mises and Hayek (classical liberals).

The confusion between Austrian economics and libertarianism is a problem, because it reduces the intellectual credibility of Austrian economics, making it appear some sort of an ideology instead of a scientific approach to markets. The main responsible for the confusion appears to be Murray Rothbard.

I've also been told of the existence of a school of leftist hayekians, but I don't know if it's true.

[Roger Koppl]

Pietro:

You say, "Knowledge is the least democratic endeavor of human life."

I don't think that's right. Consider Francis Galton's famous article, "Vox Populi."

http://tomayko.com/writings/galtons-ox

Or the DARPA balloon experiment. Or prediction markets.

I don't know that research science is all that undemocratic either. In the past at least, outsiders could make contributions. Wisdom of crowds and all that.

[Jay]

You can thank Ron Paul.

[Agut]

Let's be clear about one thing, competition in the market for waitresses is all good. But let's not confuse it with the job market, for example.

[David Andersson]

I think we can detect a narrowing of the ideological self-identification of Austrian economists from about 1870 to 1970, and then a slow widening from the 1990s onward. I would guess that 1970 was probably the date when the number of self-described Austrian economists was at an all-time low, so that only hard-core libertarians (read: Rothbardian anarchists) bothered with the stuff.

Ideological diversity among Austrians and economists partly influenced by Austrian theories seems much greater today, although probably still not as diverse as in pre-war Vienna. I think one important reason has been Hayek's influence on a number of new institutional economists such as Douglass North (who is pro-market but has explicitly rejected libertarianism). There is also a number of heterodox left-wing economists who have conceded that Hayek and Mises won the socialist calculation debate and that markets are necessary for a society to progress. Burczak, Hodgson and perhaps Lawson belong to this group; also perhaps Rosser but I don't know whether he considers himself left wing; it is surely no coincidence that they offer more food for thought than mainstream or Marxist left-wing economists). I don't know to what extent there are Austrian economists in the narrow sense of the word who are non-libertarians today. I think Koppl has stated that he is not a libertarian, but I can't think of anyone else. And then there are of course mainstream center-right politicians who claim that they have been influenced by Austrians, or at least by Hayek, for example Margaret Thatcher and Vaclav Klaus.

I think that it is reasonable to formulate a hypothesis such as this: controlling for personal ideology/values, politicians pursue better policies and economists are more persuasive if they have learned from Hayek and/or Mises (e.g. the conservative values of Thatcher yielded better policies than the conservative values of Nixon or GWB).

[Nikolaj]

Is this mean that you became the "Austrian economists" once again?

[Nikolaj]

Should be "does this..." in the previous comment :)

[Pietro M.]

Koppl:

I knew of the ox weight survey but I didn't know the source. Thanks.

Anyway, I think it's a matter of definitions and not of substance. I used the word "democratic" to mean egalitarian. You appear to use the word to mean that there are no rigid castes and positions are open to everyone who deserves it.

My point is that success among the non-economists (engineers, waiters, bloggers) is weakly related to success as an economic discipline, which is the goal a school should aim at.

That Pareto started as an engineer, and thus as an outsider of the social sciences, and then became a prominent economist and sociologist is no proof of the democratic nature of knowledge in my sense of the word, but proves that there is no rigid caste system, which probably is the meaning you gave to the word.

Of course I was talking about scientific knowledge.

[Roger Koppl]

"Of course I was talking about scientific knowledge." Ah! Well that does make a difference, I think. We often think of science as the main source of reliable knowledge. But traditions we don't call "science" can be reliable sources of knowledge too. Craft traditions might be a good example. They built all those fabulous Gothic cathedrals without modern science. But we should also consider traditional knowledge that tells us how to live our lives, what is and is not prudent, and so on. Vox populi.

I don't know whether you were implicitly invoking the epistemic superiority of experts. I responded to your post in part because of sensitivity on that point, however. I greatly admire the work of Peart & Levy in this area. I don't have a nice link to some sort of overview of their work on experts, so I'll link to a working paper of mine that includes references to their work:
http://mercatus.org/publication/social-construction-expertise

A trimmed version of that working paper appeared in Society:
http://www.google.com/url?sa=t&source=web&cd=4&ved=0CB0QFjAD&url=http%3A%2F%2Fwww.springerlink.com%2Findex%2Fk6t4364166n68524.pdf&ei=5d4UTLjDDoOBlAe8gbmtDA&usg=AFQjCNFA1z0evcDvyJn0U-pctPwTl9iLIA

[Ivan Pongracic, Jr.]

I have one more example of coming across a highly unexpected person having a serious interest in AE. In the Fall of '08 I attended the Mont Pelerin meetings in Tokyo. I decided that on my way back to Michigan, I'd do an overnight layover in LA to catch two great instrumental surf music bands (a genre that some of you may know I have a deep interest in, one that is shared by Larry White), one of them (ironically) from Tokyo, the other a local LA band Slacktone. If any band in this small genre could be characterized as consisting of virtuoso musicians, Slacktone would be it. I struck up a conversation with their lead guitarist, Dave Wronski, after the show. Dave is probably close to 50, has worked for Fender guitar company for many years now, and I don't think he has all that much formal education, but a huge amount of a talent and a rare mix of analytical and instinctive approaches to music that would indicate a great deal of intelligence. Well, I don't remember exactly how the conversation turned to this topic, but it turns out he's not only a libertarian, but an avid reader of AE! He started rattling off a long list of books by Mises and Hayek that he read and that he greatly admires! It took me a few minutes to pick up all the pieces of my mind that were scattered all over the ground.... He was able to speak about these things with a great deal of confidence and understanding. I was impressed. Maybe there's hope after all.....

(In case anyone wants to check out Slacktone:
http://www.myspace.com/slacktone
http://slacktone.com/

[Nick]

I wish the title of this blog was still The Austrian Economists. Your story makes me long for the good old days, with optimisim for the future.

[Eric]

The probability of that is definitely several times higher now than it was even in 2006, before Ron Paul ran for President.

[liberty]

You can definitely thank Ron Paul (and also Freedom Watch on Fox, John Stossel, and now Glenn Beck) for this. The probability of this happening is rising every day.

I think it's great -- whether or not the number of economists specializing in the Austrian school is (yet) rising. It is good for the layman to understand sound economics - whether or not it leads to more libertarian policies (or for those Austrians who favor other policies, whether or not it leads to these). If Austrian economics is the most correct school of economics, we should be glad for the public to learn of it, and to learn (some of) it. Furthermore, the more the public knows of it and respects it, I imagine the more that college students will demand it, and the more economists will be forced to consider it - so long as it is taken by the public as a legitimate school of economics. After all - that is probably a big part of how Keynesianism came to dominate the textbooks.

[David]

Thanks Pietro, that's a great explanation.

[Peter Boettke]

My college fraternity brother and fellow alum of both GCC and GMU, Matt Kibbe had done amazing work in communicating the message of free markets through his organization FREEDOM WORKS. The left media often takes pot shots at Matt and his organization, but he is just an excellent spokesman for lower taxes, less government and more freedom.

I realize I am myopically an educationalist, but one of the things we have to recognize is that what is going on with the Tea Party and other political activist is educational, especially when the traditional institutions of education prove frustrating to a lot of individuals. The internet has changed everything and in a variety of ways that I don't even come close to understand. Matt and his group are at the cutting edge of a major movement of social change.

http://www.freedomworks.org/

Pete

[David Andersson]

But why do they (Freedom Works) accept an endorsement from George W Bush? My one-minute impression of the site is that it's more pro-Republican than pro-market. Turns me - and I suspect many others who would be susceptible to consistent and non-partisan pro-market arguments - off!