More at Cato Unbound

Steven Horwitz

In addition to an earlier reply to Bryan Caplan, I now have a second follow-up piece posted there with one more to come Tuesday morning.  I argue in the second piece the following:

More precisely: the world is full of puzzles that we do not understand. Austrians think those analytical propositions are necessary (though not sufficient) for good explanations of those puzzles. What sorts of arguments and evidence are needed to offer persuasive accounts of those puzzles in ways that render them no longer puzzling? Different puzzles will require different propositions, which will require different methods and empirical evidence to render them intelligible.

One way to put this argument is that what makes a piece of economics “Austrian” is not so much the particular method that is employed, or even the philosophy of science that guides the investigation (as if every economist has thought about this), rather it is the substantive propositions about the economy that are being deployed and/or argued for in that piece of work.

UPDATE:  the third piece is now up.

Comments

[Greg Ransom]

I'm pleased to see Steve embracing the position I've pushed in this space & elsewhere for many years -- that good explanations come first, and methodological rules get articulated later in support of the explanatory practice -- a conception found in the work of Kuhn, Hayek & Wittgenstein on the primacy of practices and exemplars over articulated rules when it comes to science, language, and norms.

[Greg Ransom]

Someone needs to say it.

Bryan Caplan is not a "fun friendly" guy when it comes to shoving knives in the back of the Austrians:

http://www.cato-unbound.org/2012/09/18/bryan-caplan/austrian-exceptionalism/

Steve Horwitz here make it plain, Josh Barro is WRONG about most Austrian economists working in the academy, most are doing empirically based narrative science:

http://www.cato-unbound.org/2012/09/18/steven-horwitz/more-on-the-austrianness-of-contemporary-austrian-economics/

But Caplan, still evidently viewing the world from his teenage brain of 30 years ago, wants to propagate and enforce a false alternative narrative:

"Why didn’t Steve tell Josh, 'You’re complaints about Austrians are entirely understandable. You’re right about most of us. But you’ve overlooked a growing number of exceptions'?"

Horwitz didn't tell Josh that, because it's not true.

And Caplan is well aware of it -- but is purpose is to drive a few more knives in the back -- Caplan is bullfighting, waving a dishonest red flag, and sticking knives in the back.

"Fun" stuff.

Oh, so "friendly".

What Caplan falsely _says_ he wants is for Austrians to stop talking to each other and to stop talking about 'philosopy' or 'methodology' ... and to do economics.

But look what he actually wants:

"The people Steve should be criticizing are typical Austrians who make empirically minded Austrians like himself look bad."

In other words, he his deep passion is to encourage a circular firing squad with Austrians talking at one another and tearing each other apart on issues of 'philosophy' and 'methodology'.

Nice guy.

He

[Greg Ransom]

Sorry for the rant, but I find dishonesty reprehensible and I particularly find dishonesty in the service of damaging & shutting down a scientific research program particularly reprehensible.

I call Bryan Caplan dishonest because:

1) He ignores or intentionally misreads Horwitz's actual remarks.

2) What he says he wants -- focus on economics and not infighting and not philosophy, methodology & Misesian Kantianism -- is repeatedly betrayed by what he constantly demands: he constantly demands from Horwitz more Austrian infighting and more discussions of apriorism, methodology and philosophy.

3) Caplan constantly does a "plague on all your houses" routine -- lumping anyone and everyone into an "Austrian" playpen with a crude caricature that does not in fact come close to characterizing the work of most of those painted Caplan intentionally paints with crude Mises/Rothbard red paint.

Well, enough rant.

Caplan may be a wonderful person hang with.

But his decades long behavior visa vi "Austrian" economics is a thing of embarrassment -- and not worthy of a serious scientist, if you attend to the vast chasm between reality of the science done and the caricature of "Austrian economics" Caplan constructs to belittle and damage a scientific research program.

[Mario Rizzo]

I think philosophy and methodology are fine -- either first, second or last. I think that economists would gain much if they were more self-aware. I always liked Keynes's comment to Jan Tingbergen on econometrics. More or less Keynes said: "You want to get the job done;' I want to know whether it is worth doing in the first place." Sure, economics cannot stop at methodology -- a little experience doing economics would be helpful too. But we have too many people who jump in to the swamp without looking first.

[Allan Walstad]

From 1st reply to Caplan:

"Pete Boettke offers ten propositions that constitute the Austrian understanding of the market. Among them are claims about the importance of limited/subjective knowledge, entrepreneurship, competition, the heterogeneity of capital, spontaneous order, economic calculation, social cooperation, and the non-neutrality of money."

I would argue that the insight into the centrality of such issues stems precisely FROM Austrian method, as distinguished from mainstream neoclassical method. In other words, this is an example of how method in fact does come first.

[Rafe Champion]

C Wright Mills was a loose cannon politically but he was good on intellectual craftsmanship.

"Three kinds of interludes - on problems, methods, theory - ought to come out of the work of social scientists, and lead into it again; they should be shaped by work-in-progress and to some extent guide that work. It is for such interludes that a professional association
finds its intellectual reason for being."

http://www.the-rathouse.com/2010/Intellectual_Craftsmanshp_C_Wright__Mills.pdf

[Allan Walstad]

From second follow-up piece:

"Instead of fighting over what Mises really thought the right way to do economics was, let’s go at this another way: method should follow from the pre-analytical vision and the analytical propositions it generates. That is, method comes last, not first. "

It is of course possible to waste time and effort on competing hermeneutics, but I would resist the notion, which seems to be implied here and throughout Steve's comments, that Austrian method is just whatever the current crop of professional Austrian economists (as approved by Steve) choose to call it. Sorry, but Mises and the earlier Austrians did apparently think method was important, and they did leave us a reasonably distinct one. Nobody is chained to it, but I suggest that if there are those who feel free to make it up as they go along, at some point they should also feel free to make up a different name for the school to which they claim membership.

[Steve Horwitz]

I am not arguing it should be made up as it goes along. My original piece outlined a case for what Austrians think good work is. My point was simply that endless debates about the a priori have a huge opportunity cost and that if one accepts Austrian theoretical propositions, some methods will be clearly more helpful than others.

[McKinney]

I think Steve is doing a great job responding to Selgin and Caplan. I don’t understand why Selgin limits Austrian econ to just Mises. Hayek and Lachmann were certainly inside the envelope of Austrian econ and offered some empirical support for propositions.

Of course, one would have to be pretty dull to not find some empirical support for one’s proposition no matter how nutty. Even Marxists can find empirical support. The important question is how realistic are your assumptions behind the empirical work? Austrians understand that while mainstream ignores it.

Hayek has an interesting list of the differences between Anglo and Austrian econ in the opening chapters of Pure Theory that still apply today.

[McKinney]

Caplan: “3. Economists use multivariate statistics for a reason: to adjudicate between multiple competing hypotheses.”

Caplan advertises his bias here. The intention of statistics was provide a method to adjudicate, but that’s not what they do. As Leamer has pointed out many times, it’s easy to get the results you want if you break the rules and most economists don’t even know the rules exist. And as Kling has pointed out in macro, the circular reasoning involved should shame most macro economists, but it doesn’t.

[McKinney]

I really liked Davies' response. But in response to Krugman I would ask what is sloppier thinking than math economics with unrealistic assumptions?

I don't think translating prose into math systems adds much. But I would like to see Austrians use more econometrics more is that young people are weaned on statistical analysis as the acid test of truth. As they get more experience, they'll understand how easy it is to lie with statistics, but until then we need to talk their language.