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View Diary: “Condensing Friedrich Hayek: How Popularization Radicalized Austrian Economics” (99 comments)

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  •  A last word (0+ / 0-)

    You claim (as bare assertion) that  creationism is to biology as the Austrian School is to economics. Therefore, all it can teach us is something about the myriad ways in which their peers, and even non-economists "embarrass" them. On straightforward historical grounds this is dubious— this could only seem true if you take your bearings entirely by the DK boards.

    The Austrians have certainly made their marks on economics, of which the most obvious signal was Hayek's Nobel Prize—not exactly the sign of rejection. IMO, you would do better to reconsider your willful ignorance. Or, if not, I can only say that I would myself be deservedly embarrassed to write about things that I had only a partial understanding of and which I had already decided was unworthy of anyone's time.

    •  Yes, like Professor Krugaman (0+ / 0-)

      "But the Hayek thing is almost entirely about politics rather than economics. Without The Road To Serfdom — and the way that book was used by vested interests to oppose the welfare state — nobody would be talking about his business cycle ideas."

    •  Or perhaps Greg Mankiw on Von Mises (0+ / 0-)

      "The truthful, if slightly embarrassing, answer is that I have not read the book. "  

      "Second, at the mainstream schools where I have spent my education and career (Princeton, MIT, and Harvard), the economists of the Austrian school like Mises are often viewed as fringe figures. Rightly or wrongly, they rarely show up on reading lists. I am confident that while I was a student at Princeton and MIT, I was assigned not a single article by an economist in the Austrian tradition."

      So if I am willfully ignorant than I am in good company.

      •  Krugman (0+ / 0-)

        has for Nobel company Hayek and, ahime!, Friedman. That merely puts him on equal terms with them. Whatever "the Hayek thing" might be, Hayek's nobel prize was not for The Road to Serfdom, but for his work in monetary theory—but possibly that had escaped Krugman's attention. BTW, the Nobel jury was so unbelievably stupid, they jointly awarded the prize that year to both Hayek and Gunnar Myrdal. What fools you must think them.

        Greg Mankiw has the decency to admit that his ignorance is embarrassing and the humility to acknowledge that the schools he studied at might have been mistaken to have omitted study of the Austrians. You, instead, unashamedly proclaim your righteous ignorance. This already is an indicator of problems.

        However that might be, my own error was to mistake your writing as a sign of either interest or competent study of a subject on which, it now appears, you falsely led your readers to think you owned some actual expertise. Not a mistake I'll make in future. Please just ignore me and go back to your comfortably blinkered world.

        •  Since you're a fan (0+ / 0-)

          Please enlighten all of us.  What CAN the Austrians teach is?

          •  All I can say (0+ / 0-)

            is a tiny bit about what reading these guys makes me aware of. What reading them (or anything) can teach us is mostly to be more fully aware of our own (usually unexamined) premises.

            Caveat: I'm not an Austrian or any other sort of economist. My background is academic political philosophy. All of what I'm about to say is tentative and unquestionably in need of more research and refinement.

            Some of the most interesting notions to me about economics came from reading Rothbard's An Austrian Perspective on the History of Economic Thought and Raico's Classical Liberalism and the Austrian School (both of which I downloaded from free sources on the net). I didn't know much about this point of view, and I was genuinely surprised to see what little honor Adam Smith (a political philosophy perennial) was given. Part of the ground for this is that Smith, a professor of moral philosophy, believed that he was expounding an economic system morally superior to mercantilism on grounds of freedom; Smith called what he outlined a "system of natural liberty" founded ultimately on what he saw as the moral mainspring of humanity—natural pity or empathy.

            The Austrians don't want to have much to do with this. They turn to the French/Continental traditions of the Spanish Scholastics and the French Physiocrats and the 19th century intellectual wars that followed in the wake of the French Revolution. To be really brief, the Austrians emphatically wish to be social scientists, not moralists—to the extent that some believe that there is such a thing as a scientific basis to what they call Classical Liberalism.

            Oddly enough, for all the talk of Keynes around here, most working economists honor him more in the breach than the observance. They are much more interested instead in what they take to be their research as part of a genuinely neutral, value-free science of economics expressed in mathematical form. To cut a very long discussion into a snippet, few of either the Keynesians or these modern mathematical economists have much sense of or interest in their own history, much less the arguments that led up to the WW I (ca.) development of the Austrian school. Instead, they see themselves as scientific refinements of the traditions of Ricardo, Smith and Mill. But it is precisely in the early history of the Austrians, not the English moral economists, where you see the arguments meant to  undergird the development of (supposedly) truly scientific social science. In a way, I have come to see these mathematical moderns as in a way (unconsciously) sharing some important parts of the Austrian epistemological view even while disregarding its substantive conclusions. As they attempt this, they may not fully understand what they are doing or the theoretical problems they ignore (and ignored theory has a way of coming back to bite you in the ass).

            To put all this in a nutshell—reading the Austrians helps me think about the foundations of modern mainstream economics, as well as about what economics might be able, in principle, to understand and to effect. Despite the "we're all Keynesians now" mantra, there are a good many issues that remain unsettled, in much the same way that the some core discussions between Bohr and Einstein remain live issues in physics, despite the fact that most research proceeds on the hypothesis that Einstein will be eventually vindicated.

            What I am certain of, though, is that dismissively swatting the Austrians aside on the supposition that somehow "everybody" knows better, is a kind of unjustified intellectual arrogance that is based, so far as I can tell, on a shaky idea of both the so-called school (there is a fair amount of variation among the Austrians) and a kind of hyper-politicized caricature of various policy prescriptions. To bring up just one thing mentioned earlier in the thread, I don't particularly see that either Reagan's or Thatcher's policies should be linked to the Austrians, as opposed to, say, the Friedmanites or even unreconstructed Smithians.

            This is long enough, I hope, to give at least an idea of why I think reading these Austrians is useful. Of course, if you believe that economics really is now a science on the model of chemistry or even engineering, then there might be little point. I myself am doubtful about that characterization—and on that point I think I could probably find a great many mainstream economists who would (regretfully) support me.

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