Mario Rizzo on Policy Ideas in the History of Economic Thought

|Peter Boettke|

I was in the office next to him back at 269 Mercer Street on the 7th floor, when Mario decided to offer a seminar to NYU's best and brightest undergraduates on "Liberalism".  Just so there wasn't any confusion, he titled the course 19th Century Liberalism.  When he got his course evaluations back, they were glowing.  But the one complaint that was raised was that he didn't talk enough about FDR, JFK, LBJ, and Hubert Humphrey.  Mario asked me, "what about the phrase 19th century did they not understand?"

Mario is a gifted teacher and an amazing colleague.  And he has stuck with teaching his course on economic liberalism, must be close to 15 years now that this course has been offered as part of the economics curriculum at NYU (he has taught a similar course in the Law School as well).  The course  "Policy Ideas in the History of Economic Thought" is an evolution of sorts of this course and addresses in greater depth the ongoing conversation within the history of our discipline on policy issues.  And it is indeed a great syllabus and I just wish I could be there to hear the lectures and to discuss with Mario the various ideas covered in class.  NYU undergraduates are indeed very bright and hard working kids as fits with one of the elite institutions of higher learning.  

Keep up the great work Mario.

Addendum: About 12 or so years ago, Virginia Postrel attempted to get information on how many economics courses across the US used various works of F. A. Hayek as required texts.  I believe the timing went with her publication of The Future and Its Enemies.  I think by her count, Hayek had very little influence on the economic curriculum in the 1990s.  I do think her assessment would have to change today, but I wonder if (1) her data was collected and stored, and (2) how one might reliably collect that data today since self-reporting is not the best method.  Personally, I'd be very interested in comparisons between Smith, Knight, Mises, Friedman, Hayek, and Buchanan for primary source material used in economics classes at both the undergraduate and graduate level across the US and overseas.  Anyone thought about doing such a comparison?

Comments

[liberty]

I bet that it would be easier today then it was 12 years ago to get this data. One way to do it (perhaps labor-intensive, but feasible especially with help of intern/RA) would be to get a list of the top 100 universities (easily found online), supplemented perhaps by the major state universities from each state that are not in the top 100, and then on their websites try to find a syllabus for the major econ course/s you are interested in (e.g., one undergrad and one grad course where you might expect to find Hayek). You could probably find a syllabus for the majority on your list.

You could compile the data and find the percent that include Hayek, and it would be a pretty good estimation of the overall impact.

[Greg Ransom]

Now and then I track Hayek references on syllabi at some of the major schools.

I never find much.

[Greg Ransom]

Ironically, Hayek's greatest influence was arguably in the 1960s, when Friedman taught Hayek's "The Use of Knowledge in Society" paper every year to his graduate students.

[fundamentalist]

Web crawling software is availabe to do this very easily, although the software isn't cheap.

[liberty]

True - might as well automate it (duh! been out of programming too long!) I could probably write something in Perl in a few hours that would collect refs.

[Bob]

Anecdotal evidence as demonstrated by the current ruling class would point to negligible use of those economists works!

[Jerry O'Driscoll]

When I was at graduate school at UCLA in the 1970s, Hayek was occasionally referenced. Usually it was "The Use of Knowledge in Society."

Hayek had visited the UCLA Philosophy department for 2 quarters a few years before my arrival and The Constitution of Liberty was in the air, so to speak. Buchanan visited UCLA at one point, and he certainly thought Hayek's political ideas were current.

My dissertation on Hayek was completed in 1974, and the conference at South Royalton took place that year. Then things heated up.

[Peter Boettke]

The problem with Virginia's collection strategy is that you could only discover that which you already knew ... basically relying on professors you knew already had an interest in Hayek and where teaching his works.

The real issue is when anonymous people, people you never met and will never meet start working with these ideas in academia. Lets say the circle of people is 200 that we know are teaching in universities and colleges and have expressed an interest in Austrian economics --- of all varieties. This could easily be done, get the attendance list for the Austrian Scholars Conference and the SDAE conference. Then collect all their syllabi and see who is using what resources. Supplement this with a EconLit search for key terms related to Austrian economics and find individuals who have produced published research in the professional outlets and then find out what they are teaching.

I have no doubt that this number is much larger today than it was in 1990s. BUT, this is still not what we really need to see to address the concern that Virginia had, and which I have. Austrian economics will be advancing in the profession when those using its key ideas and concepts are known to those who are currently working on those ideas and concepts.

And at that point, the ideas will necessarily take on a life of their own and develop in numerous ways which we cannot anticipate or control.

When ideas win the day, they take off like wild fire. I sure hope we are sending out intellectual sparks right now into the dry brush of academic economics.

[Rafe Champion]

Circa 1989 when there were only 21 universities in Australia I surveyed the courses and reading lists in the schools of Philosophy, Politics and Sociology re Popper and Hayek. The situation with Popper was very bad and for Hayek was worse. Tried to repeat in 1998 but the colleges had all become universities, there were more than 50 and the web sites were a mess, so I surveyed 200 US philosophy schools instead (from a site that listed all the philosophy schools).

My gut feeling is that the situation in Australia with Hayek has improved marginally but has deteriorated with Popper.

What about the high schools? In 1990 the Centre for Independent Studies in Sydney checked the most commonly used Economics texts in the major states for final year school students. They were dreadful! Another survey would be interesting.

The Institute for Public Policy (non-left tink tank) is planning a survey of school texts in History, not before time.

[Pietro M.]

Today a professor of economics of no Austrian leanings has told me he was reading The theory of Money and Credit, although he didn't like it. After 100 pages of value theory I'd be of the same opinion. :-)

What about papers citing Mises and Hayek? Any database of scientific journals should be able to give the number of references per year. My gut feeling is that ABCT is anti-cyclical, and in this mess there may be lots of working papers with some Austrian contents. However, the delays with peer review are huge: maybe there will be more in the next years (in the meanwhile, SSRN, the Fed, BIS, ECB and IMF websites may be checked). If the recession goes on, ABCT will soon be everywhere. :-D

Recently I stumbled upon a working paper by Diamond and Rajan (thus, two top rank economists in the field of economic crises) which discussed Mises and Hayek's theory.

PS "I told you once, I will say it again" (this is a quotation from a death metal band): economists out there don't get what's this stuff about coordination, entrepreneurial errors, unsustainable booms, malinvestment, unavoidable recessions. And the most difficult question to answer, which is always asked against ABCT, is "what about expectations?". That's THE point to discuss to increase the visibility of AE in macro theory.

[Jerry O'Driscoll]

@Pietro,

On your PS.

(1)Mainstream economists will talk about coordination failures in terms of multiple equilibrium.

(2)Booms are being dealt with under asset bubbles, and that is the topic of this year's Cato monetary conference. And other such events.

(3)We had a recent discusison on expectations at TM.

(4) Money, or its absence in models, is a big problem. Strong-form Ratex leads to short-run money neutrality and RBC. You can't explain any of the rest of your issues in that class of models.

(5) I'm going to tackle as much of this as I can in my paper for the monetary coonference.

[Troy Camplin]

You never know where you will find and get introduced to Austrian economics, too. I was introduced to Hayek in a "Game Theory and the Humanities" class while working on my humanities Ph.D. Consequently, you will find Hayek and Mises quoted in my dissertation "Evolutionary Aesthetics."

[Mario Rizzo]

Pete,

I think we rather cruelly speculated that maybe some of the students thought the 19th century was 1932, 1960, 1970 and so forth.

[Pietro M.]

(1) I read about them on Romer's macro textbook. I didn't think they shared similarities with ABCT when I read it, but it was a long time ago.

(2) I'm looking forward to reading the proceedings. Will they be available? At least some of the old conferences were podcasted, although I prefer PDFs.

(3) I read it.

(4) That's what I answered the professor I was talking with. I'm a little worried about starting from Adam and Eve on GE models, because my ignorance on advanced micro would be immediately evident. Anyway, I agree that this is the problem with those models, and I think that almost *any* financial friction would carry the Austrian date and further the point. That would be an useful short-run approach.

(5) That's the best reason to read or listen to the proceedings of the conference.

Thanks.

[Pietro M.]

"I think we rather cruelly speculated that maybe some of the students thought the 19th century was 1932, 1960, 1970 and so forth."

ROTFL.

Given my knowledge of college students (I teach electronics engineering), it does not appear cruel, it's just realistic.

Students have not been reprogrammed to eliminate the Millennium Bug.

I'd love to study the historical events of the zeroth century, anyway. It's the part of history I know worse.

[Arash Molavi]

Counting references to Hayek's work in current syllabi is one think, measuring his impact quite another. Even though he is not often listed in syllabi (little pre-WWII literature is), his influence is significant. This is not to say that his ideas are always reflected thruthfully. The role of information in the invisible-hand context is often approached by reference to Hayek. Think of Hurwicz on informational efficiency. Also institutional literature owes much to Hayek. Counting direct references to his work (in whatever context) surely underestimates his importance for modern economics.

[Peter Boettke]

Arsah,

Of course, Hayek's ideas are what trigged mechanism design theory, and the entire approach on incentive compatibility; he also had a huge influence on the very core of equilibrium theorizing with the notion of consistency of plans intertemporally. You don't win a Nobel Prize in this field for looking pretty; you have to make a core contribution to the discipline. And of course his work on monetary theory and the trade cycle has been discussed for over 70 years even though it is often dismissed, it is continually discussed.

I make precisely the argument you are making in the introduction to my 3 volume reference work, The Intellectual Legacy of F. A. Hayek (1999), and several of my students and I are doing citation impact studies on Hayek that try to address this issue.

Hayek is one of the few economists, though, that impacts the DNA of economics if understood correctly.

I also want to say that I think in the mythology of the modern Austrian school of economics, the ignoring of Mises and Hayek is way over blown given the reality of the situation. I mean when The Affluent Society was published, Galbraith took a swipe at both in the preface. You don't do that to crackpots, and you don't do that especially if you are writing a book such as Galbraith's The Affluent Society. You don't get your book reviewed in the NYT if you are a crack-pot worthy of dismissal. And you don't get named Distinguished Fellow of the AEA if you are an adjunct professor at a no-name university who never made a contribution to the discipline.

So our mythology raises a lot of issues of cognitive dissonance to anyone familiar with the way the economics profession works. Please understand, I am not saying that Mises and Hayek did not suffer unjustified slights professionally --- I believe they surely did. But I also think there personal stories are more complicated than just a black hat/white hat story, related to personal choices, historical circumstances, etc. And more importantly that while that mythology may have served an important purpose in the past, I think it is a destructive meme to spread among the younger generation of aspiring economists. Of course, Truth is the priority, so we have to know the REAL story and the heroic struggles that these (and other) free market economists faced in the dark ages of 1940-1980. But we also have to know that success in the profession is not a signal of selling out; that there is a tremendous amount of progress in economic thinking since 1940 that is beneficial to someone working within the Mises-Hayek framework, and that the #1 thing to focus on is NOT to be a faithful follower of Mises-Hayek, but to be as good an economist and political economist as your skills and aptitude will permit.

It is not about martyrdom, but about scientific progress that we need to focus our attention on.

That is what I'd like to see discussed --- how are Hayek's ideas (or Mises's ideas) being used in the scientific discourse in economics to advance our understanding of markets, of government intervention, of socialism, of development, of the nature of scientific progress in the sciences of man in general.

We need to track and measure that I think, perhaps a syllabi collection is a start, but it certainly doesn't exhaust what we are after.

[Chip Hessenflow]

My comment is not directly answering you question but... I have visited many universities in my lifetime (maybe 100). One of the things I like to do is visit the book store and look around. I check out what the economics department is using for texts. I also look at political science area. Overwhelmingly, schools teach from textbooks and not from original source material. Rarely have I seen a Mises or Hayek book.

[Jerry O'Driscoll]

The Cato monetary conference is broadcast live and then accessible after-the-fact. The proceedings are published the following spring as an issue of the Cato Journal.

[Jerry O'Driscoll]

I'd like to piggyback on Pete's comment. Using Mises or Hayek's ideas in current economic discourse means integrating them with current analysis. It's about finding common elements, not focusing on differences.

When I went to graduate school at UCLA, information problems dominated all the fields. A
Distinctions between micro and macro were blurred. Leijonhufvud's interpretation of Keynes was a story of coordination failure. In short, it was an environment open to Hayekian ideas.

Today the opening is the failures of conventional thinking to understand, much less solve the economic crisis. Austrians should be injecting their ideas into the debate.

Our institutions and political culture have failed us. Fixing that sounds like the intersection of Austrian economics and Public Choice. Plus a little Bloomington School thinking.

[Arash Molavi]

Peter,

thank you for your comprehensive reply. Just great. I totally agree with every word you say.

[Mario Rizzo]

I think Jerry's point about looking for common elements is wise. If we insist on the full "purity" of the Austrian perspective, there will be at least two consequences: (1) Austrians will close themselves off to real progress in their own perspective (other people do have valuable ideas); and (2) Other economists simply will tune us out.

[Greg Ransom]

One reason "Austrians" should be celebrating the work of people like William White and John Taylor and Raghu Rajan -- White and his research staff at the BIS nailed the artificial boom and inevitable bust across the 2000's, and White has brought his Hayek-based message to the commanding heights of the banking and academic community. White is a modern Austrian hero -- but who is celebrating or even talking about him?

Jerry wrote,

"Using Mises or Hayek's ideas in current economic discourse means integrating them with current analysis. It's about finding common elements, not focusing on differences."

[Greg Ransom]

Nick Rowe is taking up Hayek macro themes ....

http://worthwhile.typepad.com/worthwhile_canadian_initi/2010/09/re-thinking-the-new-keynesian-is-curve.html

And the "injection" of Austrian ideas here seems in part to come via Hayek conversations in the comments section of his blog.

Conversation matters. Blogs are forums for conversation.

It seems remarkable that Austrians aren't (much) a part of the very lively conversation taking place among top macroeconomists on the blogs.

Jerry writes,

"Today the opening is the failures of conventional thinking to understand, much less solve the economic crisis. Austrians should be injecting their ideas into the debate."

[Greg Ransom]

So are Austrians ready to welcome Dean Baker into the Austrian macro fold?:

http://www.cepr.net/index.php/blogs/beat-the-press/basic-logic-for-ben-bernanke

His reasoning seems Austrian kosher to me.

Jerry writes,

"Using Mises or Hayek's ideas in current economic discourse means integrating them with current analysis. It's about finding common elements, not focusing on differences."

[Jerry O'Driscoll]

Thanks to Greg for his comments and the links.

[Bill Stepp]

Interesting comments. I wonder if getting someone like Dean Baker, named abouve (but there are others too) to guest blog at various Austrian blogs (CP, TM, CafeH, etc.) would be useful.
They might then reciprocate by having Austrians guest blog at their sites.

[Rafe Champion]

The concept of prematurity may be relevent to explore how come the essential elements of the Weber/Mises program were in place on three continents a long time ago (Parsons 1937), (Mises 1940/49)and (Popper (1944/45) but are only in recent times recruiting significant numbers of people like the George Mason gang to generate programs that integrate economics with the other relevant disciplines.

Quite likely the philosophical/methodological climate is the villain and good economics will be swimming against the tide as long as logical empiricism or some variant of positivism remains dominant in academic philosophy, challenged only by equally unhelpful schools of thought.

[Kyle8]

Dr. Boettke, How much does your work concentrate on the influence of Austrian economics outside of academics.

More precisely, how much influence has Hayek and Von Mises had on the political class.

Is it waxing or waning? Or perhaps I have to read all three volumes of your work? Grin..

[Peter Boettke]

Kyle8,

That is a project for others to do. Obviously an important project. But not one I have any comparative advantage in conducting. Others are in a much better place than I am to do that.

I hope that helps.

Pete

[Rafe Champion]

If someone wants to assess the prevalence or impact of some body of ideas outside academia you have got a major project on your hands, but you could make a start at a couple of places (1) the text books for high school students (2) the books that are being read by interested laypersons who visit your local public library.

[Mathieu Bédard]

I don't know how it is in the US, but in Europe there is a culture or secrecy and mistrust around classes syllabi which would make such project difficult. Often professors will not want their syllabus to fall in the wrong hands, either warning kids not to pass their note to just everyone under a false copyright argument and/or will password-lock the .pdf if it's online.

Or maybe I've just had a few terrible professors among many great ones.

[Jerry O'Driscoll]

Until graduate school, my reading of Mises and Hayek was outside the classroom. I finished Human Action just as I began my studies at UCLA.

The first Hayek book most people have read is The Road to Serfdom. And I don't think it's tyically because it was assigned reading. Then there is the Glenn Beck phenomenon.

The public may know more about Hayek than the economics profession. For a time, the same was true of Milton Friedman. Friedman was being read by students on college campuses where professors would not teach him in their classes. Even after he won the Nobel Prize.

In this week's Forbes, Paul Johnson asks if universities have value. He struggles for an answer.

[Pietro M.]

I discovered Mises and Hayek (and Popper, Locke, Tocqueville, Montesquieu, Jefferson, Berlin and others) reading Edward Luttwak. He had written a beautiful anthology of classical liberal thinkers written because in the '90s he believed he had to bear the white man's burden of civilizing Italian politics. On this account, he failed on his manifest destiny. Anyway, for me this has been quite fruitful of unintended consequences.