|Peter Boettke|
Richard Wagner is one of the most insightful economic thinkers around. This article "Change Within Permanence: Time and the Bivalent Logic of Economic Analysis," Advances in Austrian Economics, 14 (2010) is a great explanation of the differences between the Neo-Walrasian and Neo-Mengerian research programs. For those wanting to explore Wagner's thoughts on these issues, I also recommend his earlier paper "Economic Efficiency, Rent Seeking and Democracy: Zenoistic Variations on Coasean Themes," Advances in Austrian Economics, 1 (1994).
If you find these articles thought provoking, then don't hesitate to grab as quickly as possible Wagner's Mind, Society and Human Action (Routledge, 2010). We often get questions at Coordination Problem about what is the best theoretical work in Austrian economics since the classic works of Mises, Hayek, Kirzner and Rothbard. Wagner's work should be on that list in my opinion, perhaps even at the top of that list!
That second Wagner paper should be Zenoistic rather than Zionistic.
Posted by: FC | June 03, 2011 at 09:46 AM
FC --
Thanks for the catch --- fixed.
Posted by: Peter Boettke | June 03, 2011 at 10:10 AM
Does anybody have a pdf version of Economic Efficiency, Rent Seeking and Democracy? Many thanks!
Posted by: Gu Si Fang | June 03, 2011 at 11:59 AM
Very interesting paper. Thanks!
Hayek provides a nice comparison of English vs Coninental economics in “Pure Theory” that I think is a variation on this theme.
Wagner: “Needless controversy and confusion can arise when there is incongruity between a program and the object of examination, as when a framework suitable to invariance across time and place is used to explore variability across time and place.”
That’s a very important point. Seems to me that Hayek and Mises attempted to unite the neo-Walrasian and neo-Mengerian approaches, Mises with his evenly rotating economy and Hayek by refining the meaning of equilibrium.
Wagner: “Stated differently, the neo-Walrasian program cannot accommodate a
genuine theory of markets, as distinct from a theory of exchange.”
That’s the problem, isn’t it? Neo-walruses think their program can accommodate a genuine market theory with time.
Wagner:” ACT is commonly expressed within a neo-Walrasian framework, with an initial equilibrium…”
Actually I don’t think that is the case. I think most people present it within Mises’ and Hayek’s frameworks of ERE or equilibrium with certain assumptions relaxed, such as perfect foresight and information. However, mainstream economists don’t get that and assume a Walrasian framework.
I would like to see someone try to integrate Wagner’s figures 2 and 3. Hayek attempted something similar in “Pure Theory” and got trashed for making things too complex.
Posted by: McKinney | June 03, 2011 at 12:44 PM
Pete is right. Dick's book is a remarkable synthesis of a vast and heterogeneous literature, but also an original and creative contribution in its own right. It's an impressive performance all around. My favorite chapter is probably the concluding chapter on entanglement. He points out that the nature of the firm is not independent of the nature of the policy regime, so that you cannot describe the system by taking an all-purpose description of "the market" and stitching it to an all-purpose description of "the government" or "the state." A bank's risk preferences, for example, depend on whether it is gambling with its own money or with taxpayers' money. And it is symmetric. The different bureaus, branches, and levels of government are no more a homogeneous interest than "business." And their nature depends on the rent-seeking opportunities available and, really, the whole system including the nature of "private" firms. So "private" and "public" enterprises are entangled. It's great stuff and very important for analyzing the crony capitalism we have in the US and elsewhere today.
Posted by: Roger Koppl | June 04, 2011 at 09:27 AM
Wagner noted that Carl Menger was aware of the two distinct research programs. Following him, many people have drawn the distinction between the theoretical and historical sciences - Weber (and following him, Talcott Parsons), Mises and Popper. The historical sciences effectively include policy studies where laws are assumed and the aim is to either explain what happened or to organise things to get better results.
I appreciate that Menger made a further distinction between historical studies and policy studies but the logic of analysis is much the same.
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