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« Proud as a Peacock --- Well Perhaps Just Very Pleased --- About an Argument Calling for the Abolition of FEMA | Main | A Toast to Cheaper Goods »


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Right on. Higgs is right to suggest that it's all about "mutually beneficial intellectual exchange with other economists." As Deirdre McCloskey always says, the point of specialization is exchange, and that goes for scholarly work too.

This is exactly what I like about Friedman's Monetary History, Greif, Eichengreen, and a few others. I wish more people wrote like this. I do understand not all economic writing has can be this sort of "theory [and empirics, I'd add] to inform narrative", because you have to develop and argue about the theory and you have to produce the body of empirical work. But I think the most useful application is bringing those insights together and providing a coherent, useful narrative of how the world worked (i.e., history), which of course gives insights into how the world is working.

Even thought the theoretical and empirical work is still necessary, it's always the application of that to a narrative that's a real pleasure to read.

"applying that framework to render the world around us intelligible"

That's great!


The answer to your title's question, taken literally, is obvious: Information is costly.

"But I don't confuse history of thought with doing economics per se."

I think doing the history of economic thought is doing a type of economic *theory*. Frank Knight and Jacob Viner apparently thought so too.

Excellent post and point, Pete.

I would add one humble qualification, however, as someone who came to Austrian ideas late in my career (and who has very much regretted not being introduced earlier), one advantage to doing more "obtrusively" is that it may give people like me a better indication as to where the ideas largely came from and the tremendous credit due to Austrians. It strikes me that there are a lot of ideas that are considered recentish innovations in the mainstream world that had been present in Austrian work for decades previously and which give people like me cause to wonder whether, if the ideas had been introduced in a way that explicitly recognized their Austrian provenance or influence, it wouldn't have been a) more honest, and b) better for the world in general. But perhaps that's just a unwarranted suspicion on my part.

Thanks, BTW, for your blog. I've learned a lot from it.


With some (many?) economists you will gain nothing from trade. To have mutually beneficial trade there must be enough similiarity of interests to make the differences of use. Consider I have pig liver and you have cow dung -- neither of us may gain from trade. Just live in peace with each other.

I am not saying this is the usual case. But truly there are better ways to spend one's time often.

"I think the doing of economics is about appropriating or developing the ideas you find important into a coherent analytic framework, and then applying that framework to render the world around us intelligible"

This is a simple, yet deceptively insightful sentence. Indeed this is a very good description of the doing of science. Beautiful!

I've read the review. It is not exactly glowing, but mostly polite.

There are some problems with using "some" elements from the Austrians and some elements from public school and so on and that is that your thesis will not pass any smell test.

The problem with trying to talk with the mainstream, or any other school, is that, although you use the same words, those have a different meaning. It is like talking with a Muslim about Jesus (I don't have a better example at the moment), or talking with a free-banker about inflation. They hear you but they don't understand.

Those elements you are using to make a case have fundamentals and they have a place in a chain which leads to logical conclusions. If you pull them and put them in some strange context, you get an interesting collage, but an ugly painting.


“I am not saying this is the usual case.” Okay, I hear you. But you sound too pessimistic when you say things like, “But truly there are better ways to spend one's time often.”

There are two sides to Max Planck’s quip that “science advances one funeral at a time.” On the one hand, you better not wait for Paul Krugman to have a conversion experience. There are a few examples, actually, including Shackle with Keynes and Leonard Rapping being “radicalized” in the Viet Nam era. But that’s pretty rare. So in that sense, the “exchange” usually comes to nothing. On the other hand, however, the younger folks are more open. Even if they don’t come over fully to your POV, they may feel obliged to modify their positions to take account of at least some of your arguments. And you can see this slow movement in economics. I remember what economics was like circa 1980. Today the profession is far more “Austrian” in how it thinks and argues. I think Austrians had something to do with that change, including your book with Jerry O’Driscoll. Or consider the state of thought at the time of the founding of the Mont Pelerin Society. We came a long way in a generation. So change in the intellectual climate generally and among academic economists are both possible.

Chris has gained readers outside the world of Austrian economics and fellow travelers, as Bob Higgs was saying. Leeson has pulled in a pretty good audience with his work on pirates and ordeals and such. Ed was on CNN with his wonderful booze research. And Ben Powell has made it possible to defend sweatshops with being ostracized in the faculty lunchroom. And so on. These people are getting an audience and slowly bending opinion in their directions.

IMHO we need to be sure that something similar happens right away in macroeconomics. The time seems ripe with all the renewed attention to the long-neglected topic of the “state of confidence” and the crisis (as I see it) for rational expectations. I know Larry White has some good students at GMU, including Will Luther. So we may soon see something there.

In other words, Mario, be of good cheer!

When Ernst Mayr and David Hull and Michael Ghiselin etc. have worked on the hardest problems of Darwinian biology they could not avoid -- and they profitably exploited --what most people would call "history of biological thought".

Gerald Edelman and Joaquin Fuster have worked on the hardest and largest problem of global brain theory they could not avoid -- and they profitably exploited --what most people would call "history of brain science / mind philosophy thought".

Thomas Kuhn and David Hull and Karl Popper have worked on the hardest and largest problems in the theory and science of how science advances, and they could not avoid -- and they profitably exploited --what most people would call "history of the philosophy of science" and the history of related fields of inquiry.

The hardest problems in complex sciences address deep conceptual conudrum and implicate deep alternative explanatory strategies -- and most of all the hardest problems involve wide-ranging scholarship and un-ending contemplation of all sorts of facets of could be either successful or unsuccessful avenues of inquiry -- DEPENDING ON HOW THE INQUIRY TURNS OUT.

All of these various and numerically massive avenues of inquiry have been explored in various way and to various degrees ACROSS HISTORICAL TIME -- rethinking things and working on the hardest problems requires A COMPLEX ASSEMBLY OF REMINDERS. Many of these reminders will be exploited from what is conventionally called "history of economic thought".

Doing theory at the highest level on the hardest problem is a multiply complex endevour and it is NOT independent of the the explorations and reminders exploitable from "history of economic thought".

The history of fashion in economic "science" over the last 50 years shows that much of "doing economics" in blindness to the is much like spinning out the logic of accounting for the number of angels on a pin. Lasting "knowledge" is some sense, but "knowledge" not of interest to anyone after the passing of the "good by" date -- i.e. it's proved to be useless in providing powerful explanation or it has proved to be completely unfounded as an approach to empirical data or causal explanation.

So, also, "doing economics" involves doing something which is aware of the _history_ of all the dead alleys of the "science" -- so no one is ever "doing economics" outside of the context of the history of alternative avenues they stand without -- if they aren't doing the background history of economics competently in at every step, their work promises to be more dust catching fashion abandoned before their children reach college age.

Let's make that:

"The history of fashion in economic "science" over the last 50 years shows that much of "doing economics" in blindness to the "history of economic thought" is is as lastingly fruitful as spinning out the logic of accounting for the number of angels on a pin.

Amen. See my forthcoming piece in SIEO.

Oh, I love to see such important scholars like Professors Rizzo and Koppl argue over conceptual points. But wait ... doesn't that undermine Boettke's point?!?!

And just to throw my two cents in, I would rather read any day of the week the exchanges between people like, say, Herberner and Hoope against Yeager, or Horwitz against Hill, or all the Austrian responses to Paul Davidson's criticisms, or Caplan against Boettke on socialism, and so on, RATHER than reading the more applied work by the new generation of Austrian scholars. Sure, as Professor Koppl pointed out, these guys got some air time on CNN, but what does that matter? I want to see these guys argue over fundamental points against other economic traditions in the pages of HOPE, JPKE, & ROPE.

I do agree with Roger that progress has been made in communicating our ideas to others and in getting feedback of a useful nature from them. It is just that when I see the "other wordliness" of much economics research among the "higher ranks" of the profession I cannot relate to how they go about doing "economics." In fact, I rarely hear them using economics words like "interest", etc. I just hear mathematics!

I think we assume that people want to know the truth about something. My gut feeling is that the more important truth is personally, the less people want to know the truth and the more they want their preconceived ideas supported.

There is some support for that in public relations research. People choose what they consider to be true for emotional reasons and then search for rational backup.

World views are very difficult to change. According to one researcher it takes a significant emotional event, some kind of disaster, to get people to reconsider their world views.

Scientists are no different.

It took the stagflation of the 1970's to get people to read Rizzo and Discroll's book. It took the current depression to get people to reconsider mainstream econ.

Remember in the late 90's when some mainstream economists declared the end of the business cycle?

And it was the Great D that caused people to abandon good economics for Keynes. As in politics, the incumbent economics gets the blame for any disaster.

Professor Rizzo,

Such is the plight of an Austrian interested in epistemological things. I remember all too well coming away fascinated by Coase's papers and then going to "NIE" panels and discussions at Washington University only to find the rooms filled with non-english speakers interested in mathematical models.

I would also quibble somewhat with the impact Austrian economics has had on "social policy" generally. Basically, Austrian economics is identified with libertarian ideology. That is how policy makers and news/current events-type thinkers view it. Remove libertarianism from the Austrian programme, and a lot of its interest would disappear. Have you been to any of the Mises Institute summer programs lately? It is all about anarcho-capitalism and free markets! Poor David Gordon has stopped giving lectures on Mises' praxeology because, frankly, nobody cares.

For example, Professor Boettke referenced a very nice piece by the Skarbeck's that was featured in the Atlantic. It was an excellent article. But the readers of the Atlantic correctly identified it as libertarian ideology, even though it is premised on fundamentally Hayekian concepts. Now, I would argue that one could be a Hayekian without subscribing to the libertarian ideology, but in the social policy context, that is just not possible. We will never make a positive impact if people just consider Austrian economics to be a form of libertarianism.

FWIW, austrian away, I have never considered myself a libertarian, except for about 15 minutes as an undergraduate *before* I knew anything about Austrian economics. OTOH, the identification you note has not prevented Austrian economists from contributing to the good changes in economic ideas since 1980 or so.

"contributions" and "good changes????" All I have seen is the wonderfully rich tradition of Austrian economics becoming increasingly swallowed up by the Chicago rational choice and GMU public choice literature.

Now that is not to say that the new Austrian literature is no good. Nobody is really in a position to suggest that. I am just saying that Austrian economics, properly understood, is something entirely separate from the theories of constrained maximization (a la chicago) and improper incentives (a la public choice). We need to go back and read our Karen Vaughn, our Ludwig Lachmann, our Fiona Maclachlan, and, hell, our Greg Hill (who appears in Critical Review).

Well, austrian away, I remember what it was like way back when. Maybe you do to; I don't know how old you are or what you do or do not know about academic economics. But I really don't know how you could have been in the game since 1980 or before and not have interocular trauma from the austro-friendly changes since then. Sure, sure, we've still got plenty of work to do. But it's a different world.

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