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I recall you mentioning something in an interview about a book on The End of Laissez Faire. Is that still happening?

It *is* amazing if you think about the state of affairs thirty or forty years ago. George Stigler once said that a school of thought that goes into eclipse (or dies) never comes back again. We can debate what it means to "die" and especially to "come back again" but, from any dispassionate perspective, our revival is an important phenomenon.

Nevertheless, I am troubled that many economists still think that Austrian economics is mainly the history of thought -- especially Mises and Hayek. Part of the blame must be placed on Austrians themselves -- some of whom think that the task of Austrian economics is simply to elucidate Mises-Hayek.

But then I must also place some blame on Austrians (including myself) who do not give enough attention and credit to the works of contemporary Austrians who have gone beyond Mises and Hayek.

Someday a post like Pete's will be unnecessary, I hope.

In the meanwhile, let's all continue to do our work. And, perhaps controversially, worry less about what Mises or Hayek believed. Let's develop our own ideas. They are better -- of course because we have their shoulders to stand own.

I concur with what Mario has said above, with one proviso:

That students being introduced to the Austrian School are encouraged (and in courses required) to read the original masters -- upon whose shoulders, as Mario rightly says, other are able to take those ideas and develop them in new, refined, and original ways.

I fear, from some conversations with younger students interested in the Austrian tradition (note, I do not say in all conversations), I notice a frustrating lack of knowledge of - and sometimes interest in -- the history of the ideas that they claim to be interested in.

Few seem to have actually read through Menger or Boehm-Bawerk. Hardly anyone knows who Wieser was. They have very selective knowledge of Mises and Hayek, and little knowledge about Ludwig M. Lachmann. And knowledge of contributions other members of the school from the earlier part of the 20th century, say, Fritz Machlup or Gottfried Haberler, or Oskar Morgenstern are virtually non-existent.

The generation that includes Mario and myself, as well as, say, Jerry O'Driscoll, or Roger Garrison, (or included Sudha Shenoy and Don Lavoie), or today includes Pete Boettke and Steve Horwitz considered it imperative to be conversant with most of the body of Austrian Economic Thought to be better able to think beyond those earlier masters and be better armed to confront mainstream economic theory.

I notice too frequently today a noticeable lack of equal drive and enthusiasm in knowing the history and ideas of the Austrian School as the necessary stepping-stone to further advances in the Austrian tradition among younger students.

Perhaps some who comment on this blog will beg to differ. I hope you are right. I just don't seem to run into it that interest and studiousness that frequently.

Richard Ebeling

Maybe this is a poor argument, I don't know, but I'm a young student of economics who tends to read quite a bit and I still haven't gotten around to reading Bohm-Bawerk or Weiser (Menger, yes), largely because there's just so much literature available that one has to be familiar with and conversant in, in order to become a decent economist. Surely there was no lack of literature to read when the older generation was younger, so perhaps I'm completely wrong here, but it seems from my persective, given the development of so many specialties over the years, that there's more "stuff" to read.

On a side note to Richard Ebeling, I just received _The Theory of Prices_ by Arthur Marget in the mail the other day and can't wait to start it. I remember you recommending that.

Also, while I definitely feel the older classics have something to offer, let's not forgot that there've been no shortage of NEWER "classics" written since the 19th century, and they all demand time and effort to read and master--and I'm not just talking about the Austrian school, but in economics in general.

Of course, one also ought to be at least familiar with philosophy of science and Kuhn, Lakatos, Popper (perhaps Feyerabend) and their influence on economic methodology; political theory and philosophy; ethics and moral philosophy, etc. I could go on forever and haven't even mentioned the very time-intensive and exhaustive study of history.

Congratulations to all listed.

Wow, Oxford agreed to publish a handbook on Austrian economics.

The main problem is one I see for all economic theory. Most economic theory that is actually useful qualitatively was already solved and only a very small amount of new theory is very useful or lasting. I mean, regulators still have huge problems understanding that demand curves generally slope down and supply curves generally slope up, and that markets are forward looking, and that marginal effects are what matter to markets not average effects.

Getting them to understand more complex theory, seems to be nearly impossible.

Congratulations to everybody for these wonderful achievements. I am particularly looking forward to see the Oxford handbook on Aùstrian Econ. Who'll be contributing to it?

I think Richard is correct in his assessment that many "young Austrians" are not well versed in Austrian economic theory. Perhaps a reason for this is that many adopt AE because they are libertarians rather than the other way around? At least, it would explain why many do not perceive a need to study the theories, since they already know principles of libertarian political theory and believe them to be perfectly applicable on (simplified) economic theory.

In any case, and I don't know whether this is comforting or not, there are those of us who do study the old masters. I've already been through several of the "classics" (Menger's Principles, Capital and Interest, Human Action, Rothbard's MES, Capital and Its Structure...), and I have a long reading list including Machlup, Strigl, Wieser, Clarke, Wicksell, Wicksteed, Fetter, and others.

Also, a few of us have a study circle in mid Missouri with Peter Klein in which we studied Human Action in the spring and will study Theory of Money and Credit as well as Prices & Production this fall. I know we're not the only ones doing this sort of thing, so things *are* going on. But perhaps the quantity is still lacking...?

I agree with Richard Ebeling that it is necessary to have a foundation in Austrian "principles" before moving on -- though one must move on.

It is too bad that our "principles" books (I am putting aside The Economic Way of Thinking) are old and not a lot a fun -- compare the average standard Principles text with all those pictures, power point presentations, computer exercises and what-not.

We could use something like this but, unfortunately, it wouldn't sell enough copies to repay publisher or author.

With apologies for the self-promotion: Cambridge is publishing my book with Nicolai Foss, _Organizing Entrepreneurial Judgment_, in late Fall. We will try hard to get a piece of Mario's promotional budget.

Over at Mises.org there's a discussion about why the Law and Economics book is so expensive at around $711. Any thoughts?

I don't like to move on thing. Move on where? Should we just do it for the sake of moving?

As far as I could see, from my lectures, the only one who moved on from Mises and Hayek in a significant way was Rothbard. Kirzner made some contributions, but I don't find much of value in them. It is my opinion.

I don't want to be mean, but it seams like the Austrian School is really dead this time.

I refuse to believe that Mr. Niko's comment is serious.

One of the things that impressed me most about Huerta de Soto's book on money and banking was his depth and breadth in Austrian econ.

I often recommend his book to newcomers as a survey of Austrian econ.

Congratulations on the new books! Those are exciting!

I would like to see Austrians do more number crunching, though.

"Niko,"

I really don't think you have paid attention to the types of further advancements that Austrians have been trying to make in a number of areas.

To begin with, Nicolai Foss, Peter Klein, Frederic Sautet and Peter Lewin have been making insightful and original contributions to the theory of the firm and organizational management from a distinctly "Austrian"-oriented perspective.

The fact is that except for some of Fritz Machlup's writing from the 1950s (most especially his "The Economics of Sellers' Competition" [1952], which I consider to be a neglected important work), Austrians had not worked on this aspect of market theory until this more recent literature.

Roger Garrison's "Time and Money" and Peter Lewin's "Capital in Disequilibrium" have restated, refined, and developed further aspects of traditional Austrian capital theory handed down from Boehm-Bawerk's, Hayek's and Ludwig Lachmann's work.

And it cannot be denied that Lawrence H. White and George Selgin have revived a long-forgotten and neglected tradition in monetary theory - private, competitive free banking. And before them, the only economist (Austrian or otherwise) who took any interest in suggesting its relevancy in the 20th century was Ludwig von Mises

(In 1942, Gustav Stopler observed in his book, "This Age of Fable," that, “There is today only one prominent [classical] liberal theorist consistent enough to advocate free, uncontrolled competition among banks in the creation of money, [Ludwig von] Mises.” But, Stolper went on, Mises had succeeded in drawing no followers to pursuing or supporting this institutional alternative.)

And while in some recent posts on another blog site, Dr. Selgin has expressed strong language concerning his views about the monetary contributions of a particular Austrian economist, the fact remains that a good deal of the starting point of his own theorizing began with (and remains broadly consistent with) the monetary writings of Mises and F.A. Hayek. (Something I know George, being a thinker of forthright intellectual integrity, would not deny.)

The recently published, "Handbook on Contemporary Austrian Economics," edited by Peter Boettke, also brings out the modern and new "twists" that a variety of Austrian theorists have been giving to a wide variety of themes in micro- and macro-economics.

Finally, I would suggest a more careful reading of Israel Kirzner's work. While there has been critical evaluations of various aspects of his conception of the entrepreneur, the meaning of "alertness," etc., there is absolutely no doubt that his contributions are not only original and important advancements on earlier Austrian writings on the theory of the market processes and the role of the entrepreneur (Friedrich von Wieser, Mises), but his writings on these themes are considered additions to the general literature on this aspect of market theory within the wider economics academic community.

And I would add that Dr. Boettke is mentoring and fostering a new generation of young Austrian economists at George Mason University who are encouraged to think beyond their understanding of the existing body of Austrian theory, and to explore how to apply, extend, and develop the Austrian "way of thinking" in a variety of new directions.

Dr. Boettke's conception of a student's "investment" in Austrian ideas is a forward- looking "period of production" leading to significant intellectual pay-offs in the future; not simply a backward-looking "period of production" focusing on the accomplishments of the past.

Richard Ebeling

Niko,

A good overview of the Austrian school which rightfully places its contributions where it should be (that is, time, uncertainty, ignorance, thorough-going subjectivism instead of political ideology) is Karen Vaughn's _Austrian Economics in America_. If the school is looked at in this light like it ought to be, then one will clearly see a progressive continuation of the works of Menger, Mises, and Hayek.

We should not forget all of Richard Ebeling's work in teaching us about our deep and varied tradition.

OK, I'll probably be banned after this, but so be it.

I have two main concerns.

1. "moving on -- though one must move on." Where and how? Should people write stuff for the sake of writing? Well, it is economics, not literature. I have the strange impression that you guys think the problem is lack of quantity or something, but I don't think this is the case.

I read Lewin and Garrison. Those are nice books. But not ground breaking.
I don't like the free banking stuff. It is wrong on so many levels (in my opinion of course).

2. Reading Prof. Selgin and Rizzo's opinions about "he who shall not be named," I think it is no longer about ideas, but personal. It is as if you think that "he who shall not be named" was holding you back. Well, that guy is dead for what? 16 years? The only thing holding you back is your own work. People like me read it and they reach a conclusion. Sometimes they are in agreement with you, sometimes they aren't.

EXAMPLE:
To quote someone from the Economist:
"Although sophisticated Austrian-school monetary economists such as George Selgin and Larry White defend rule-based inflation-targeting policies not all that different from Mr Sumner's neo-monetarist nominal GDP-targeting rule"
People read and make their own opinions. I said that Selgin and the free bankers in general advocate inflation. It seams others agree.

Now Selgin:
"Thanks to all this nonsense people like myself and Larry White (who does still call himself an Austrian) have to waste oodles of time debunking his ideas--we most certainly haven't simply "ignored" them--that we'd rather spend attackingcentral banker's shenanigans."

I don't understand why they have to spend all this time. They could just "move on" and argue with those "centralbankers". The problem is that central banking is the natural outcome of free banking (my opinion, again).

Sorry for the loose statement. I am really tired and it is not exactly a subject I take pleasure in discussing.

Niko,

In all seriousness, are you a professional economist? The efforts I am describing are (1) truth tracking efforts to better understand the conditions under which social cooperation under the division of labor can be realized; (2) the failure of public policies that undermine that ability to realize those gains from social cooperation; (3) in doing 1 and 2, to bring the amazing insights of Menger, Mises and Hayek to the current professional discourse in academic economics; and (4) in the process of doing 1, 2, and 3, building upon and pushing in new directions -- theoretical and applied -- the intellectual heritage of Menger, Mises and Hayek.

This "business of ours" is very clear cut -- AER is preferred to RAE; Cambridge University Press is preferred to Cato Institute book; teaching at Princeton is preferred to GMU, etc. And, this "business of ours" is very competitive. Not everyone is capable. Many who are called to play chess, can really only play checkers. But you only find that out by actually attempting to play chess!

Don't get me wrong, checkers can be fun; publishing in the RAE, or with CATO, or teaching at GMU can be very rewarding. But our professional aspirations must be higher IF we hope to change the way the economics profession thinks about the ideas we care so passionately about (and which we get from Menger, Mises and Hayek most directly).

Why is this so hard to understand?

There is no grand conspiracy to keep Austrian ideas out of the profession, there is a judgement being made among economists that these ideas are not up to the standard required. It falls on each of us to attempt to rise to that standard and contribute to the scientific literature of our age. If not, then we are NOT being professional economists. We would be intellectuals of some sort or another, but we would NOT be professional economists.

The burden falls on us to persuade our peers, and it does not help to ignore them, or to play a different game and yet claim you are playing the other game. We have to stare the situation squarely in the face and work to improve our arguments, improve our ability to write, improve our ability to think creatively, etc.

Bastiat wrote a long time ago that the worst thing that can happen to a good cause is not to be artfully criticized, but to be ineptly defended. The economics profession and the practice of peer review, and the discipline of rejection, ensures that we learn how to improve our argument and not succumb to ineptness. We don't just please ourselves, we are forced to persuade others by meeting an argumentative burden set by a profession.

So I can understand if you don't find what you are reading to be satisfactory, but this is not "writing for writings sake" it is the sustained effort to pursue 1-4 stated above. And if you don't like that work, then write a critique that passes the peer review process. If you are unwilling to put your argument down on paper and commit to that professional level of discourse (not blogging), then perhaps you are just day-dreaming. As my colleague Richard Wagner always says, "thinking without writing is day-dreaming."

Pete

Brad W., have you read Bob Ekelund's RAE review of Vaughn's book? http://mises.org/journals/rae/pdf/RAE10_2_9.pdf

Per L Bylund,

Thanks. I hadn't read that until just now.

I readily admit that at a certain level it's silly to imperialistically define what Austrian economics (or what ANY branch of economics) REALLY is. Austrian economists, no less than the neoclassical "mainstream", is not an homogeneous group of economists who adhere to a strict analytical criteria. But there's at least something distinct, however vaguely so, about those economists and students calling themselves Austrian and the intellectual heritage that they've inherited. If I chose to emphasize aspects of time, uncertainty, ignorance, and subjectivism, then it's because I believe for the most part everything else is reducible to these concepts, things like capital heterogeneity, entrepreneurial alertness and discovery, dispersed and tacit knowledge, unintended consequences, spontaneous order, etc., etc. Others can take claim to this definition if they want, something she already knew would happen, but I personally think it encapsulates the essence of what Austrians have contributed over the years. Also it seems to me a more robust definition than some of the others-- for example, some associate being an Austrian with nothing but being for free markets; and Walter Block seems to think the sine qua non of an Austrian is his or her adoption of Misesian praxeology. Those two things, while interesting in their own right, pretty much throw everything else out of the window that's worthy of keeping. I just don't get the impression of a progressing research program in Austrian economics that isn't in *some way* an implication of the concepts of time, uncertainty, ignorance, thorough-going subjectivism, and methodological individualism. It isn't enough to be simply against the mainstream; one must also put something in its place which shows promise in illuminating parts of the world and connecting disparate facts. And those themes have done that.

For what's it's worth, I think Ekelund was too hard on Vaughn (and Lachmann). Her book was an overview, afterall. Perhaps it was such a scathing review, in part, because Vaughn neglected to cover the political economy of the Austrians to sufficient degree. I would just say to that, insofar that political economy figures centrally in Austrian work and thus the case for freer markets, it's because it's a natural consequence once one has accepted some of the more basic tenets, i.e., everything discussed already.

In any case, I thoroughly enjoyed the book and still think it offers a good historical outline.

Free banking only leads to central banking if you believe free market competition necessarily leads to monopoly. To date, there is no evidence to support the belief that free market competition leads to monopoly. Rather, the evidence is that government preferential treatment of companies -- or government itself -- leads to monopoly. Which is also what history shows regarding central banking. I'm hardly a expert in these areas, and even I know that.

Good point Troy.

Not to mention that EVEN IF a central bank-esque type clearinghouse were to emerge on the free market, it would still *NOT* be the same thing as a central bank imposed on unilaterally. One evolves naturally, the other does not. There's a big difference. As Kevin Dowd says, "they're two different creatures."

Don't forget Peter Lewin! His Capital in Disequilibrium has just been republished by the Mises Institute - a free pdf is available now, a Kindle edition and the print coming soon, as they usually.

misclick:

...as they usually do.

http://blog.mises.org/17948/lewins-book-on-capital-liberated/

I thoroughly enjoyed the book and still think it offers a good historical outline. I just don't get the impression of a progressing research program in Austrian economics that isn't in *some way* an implication of the concepts of time, uncertainty, ignorance, thorough-going subjectivity, and methodological individualism.

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