In recent days, we have been treated to a bizarre spectacle in the Austrian blogosphere: a metaeconomist who has never contributed anything of substance to economic theory casually denigrating the achievements of a truly great economic theorist, William H. Hutt. Hutt was one of the greatest economists of his generation, which included Lionel Robbins, Arthur Marget, Friedrich A. Hayek, Fritz Machlup and Gottfried Haberler. Hutt obtained his highest academic degree, a B.Com (Bachelor of Commerce and Administration) from the London School of Economics. Yet the eleven books and countless aticles he published over a span of more than 50 years represented the consummation of the great Austrian-oriented LSE tradition that began with Edwin Cannan and included Robbins, T.E. Gregory, George Thrirlby , Arnold Plant and other eminent contributors to Mengerian causal-realist economics.
Let us dwell on this puzzling incident for a moment because there is an important lesson to be learned from it regarding contemporary economics. A metaeconomist is someone who discourses about the proper way to discourse about economics. He approaches theoretical controversies from “above the fray” as it were. From this Olympian vantage point, he pronounces on the outcome of these controversies according to esoteric, ahistorical and abstract standards that are irrelevant to the aims and purposes of the participants themselves. As a result the metaeconomist is reluctant to articulate and defend the standards he is using in his evaluations because he really knows very little of the content of the debates in question. A casual judgment is substituted for serious argument. Mundane economists, in contrast, are interested in grasping and explaining the economic reality unfolding in the everyday world around them. Their criterion for judging an economist as great, mediocre or just plain silly is concrete and practical: the achievement of said economst in discovering and advancing economic principles and theorems which elaborate the essence of the true causal laws actually operating to bring about the sequence and concatenation of complex phenomena observed in reality (Menger’s causal-realism).
So when a metaeconomist, who has never done research in the field, delivers himself of the opinion that Hutt’s critique of Keynes “was weak compared to the advocates of [Keynesian economics],” we should be properly skeptical and first test his claim against the opinions of the mundane economists who have made contributions in the area.
Let’s perform such a preliminary test. Axel Leijonhufvud, the innovative monetary theorist and interpreter of Keynes’s economics, is a good starting point. In his discussion of job search and information costs in the labor market, he wrote: “In my [earlier] book I cited Professors Armen Alchian and Kenneth Arrow in connection with the analysis . . . . I would here like to make retribution for the worst sin of omission that I have so far found myself guilty of: Professor W. H. Hutt’s Theory of Idle Resources (1939) ought to have been my locus classicus in this discussion.” Locus classicus? This is indeed high praise from an acknowledged master of the field. The profoundly original economist Armen Alchian “around UCLA apparently used to say that Hutt’s Idle Resources was one of the three most important books on economics.” Leland Yeager, a monetary theorist and critic of Keynes of no mean stature, said that Hutt’s “theory of cumulative deterioration in a depression is remarkably similar to the theory of Clower and Leijonhufvud.” The eminent labor economist, Morgan Reynolds called Hutt a “great–and greatly neglected–economist.” Perhaps the greatest economist of the twentieth-century, Ludwig von Mises concluded his review of Hutt’s critique of Keynes and te Keynesians, Keynesianism: Retrospect and Prospect with the following assessment: “Professor Hutt’s contributions to economic science were long since highly appreciated by all serious students of social problems. His rank among the outstanding economists of our age is not contested by any competent critic.”
As I mentioned, this is only a preliminary test. Ultimately the truth or falsity of competing claims among scientists cannot be established by appeal to authority but must be sorted out in one’s own mind. For those who are curious about Hutt’s achievements and his stature as an economist, I recommend you start with the following short articles and the references cited therein: 1 2 3 4 5
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great stuff. here’s a plug for rafe champions essays on hutt, too:
http://bit.ly/8v19u1
from paper # 4, steve horwitz:
“Rather, once we understand the role of money in making possible the translation of our productive powers of supply into the ability to demand from other producers, we can see that the root of macroeconomic disorder is most likely monetary, as too much or too little money will undermine that translation process.”
a good paper but for this ending, which seems only credible if you subscribe to the freebanking school.
it’s the process of money creation, who creates it and how, and not the quantity of money per sé that creates error cycles.
“… a bizarre spectacle in the Austrian blogosphere: a metaeconomist who has never contributed anything of substance to economic theory casually denigrating the achievements of a truly great economic theorist …”
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May I ask you the name of that “Austrian metaeconomist”? Also, what exactly did he write or say?
My only criticism of Hutt is that his “Keynesian Episode” can be a bet heavy-going at times. That isn’t to deny though that he is an excellent economist.
Joe,
Thanks for saying explicitly what you believe — that I have never made any contribution to substantive economics. I appreciate your candor. Though I don’t think “meta-economist” is actually an appropriate label for someone who has written 3 books on the economic history of the Soviet Union, its collapse and transition. But ok — meta-economist it is.
But also it is somewhat unfair that you failed to quote my full point about Hutt (who I think is awesome for the record). Here is my quote from a blog comment section: “Hutt was the better critique of Keynes, but even there he was weak compared to the advocates. So his argument had to be improved upon, and was by thinkers such as Leijonhufvud.”
Leijonhufvud is precisely the person you then go and quote against me.
Anyway, lets just be clear — the discussion was motivated by Mario’s post, we all discussed the issue at ThinkMarkets and The Austrian Economist. We have differences of opinion. Austrian economics is a broad tradition. You belong to one side of the tradition (Brooklyn/Vegas), I belong to another side (LSE/NYU/GMU). It is not meta-economics versus mundane economics, both are trying to make substantive contributions to economics and its applications.
You think my contributions are non-existent, I think you have made us think seriously about some important issues.
Lets leave it at that.
Congratulations, Joseph. You just became a meta-meta-economist, looking down from an abstract and lofty perch on the methods of the meta-economist.
I’ve heard it’s turtles all the way up, too.
Does that make Andy Stedman a meta-meta-meta-economist, looking down on the methods of the meta-meta-economist? In which case, does commenting on Andy’s post make me a meta-meta-meta-meta-economist?
In recent days, we have been treated to a bizarre spectacle in the Austrian blogosphere
Not as bizarre as this post!
Joe – if you’re referring to Pete why don’t you have the conviction to say so? Why don’t you link to what’s been said so that the rest of us can judge whether it’s denigrating?
here’s a good short paper by p. lewin on hutt’s insights into apartheid. thanks to rafe champion.
http://www.utdallas.edu/~plewin/Hutt.pdf
This is absurd, Joe.
Saying “Person A’s argument against X is weaker than Person B’s argument against X” is hardly casual denigration. Offhandedly saying that someone has never contributed anything to economic theory looks an awful lot like casual denigration.
As a student of Pete’s, let me just add that he passes out copies of Hutt’s Economists and the Public to his students and explicitly instructs them to follow Hutt’s advice: never water down your message for policymakers, just speak the truth.
I just remembered it’s Politically Impossible, not Economists and the Public. My mistake.
Did Boettke steal your girlfriend?
Guys,
Stop.
This is hilarious. Dr Salerno always wipes the floor with Boettke and Boettke always comes back for more like a dog that has been spanked on the nose with a rolled up copy of Human Action
Pete’s always gushing about how Tyler Cowen (occasionally) returns his calls. Pretty pathetic.
http://austrianeconomists.typepad.com/weblog/2009/12/one-of-the-most-creative-young-economists-around.html
Said meta-economist is mentor of that fine economist. It is an open Mason secret that Pete will soon be joining the Chicago faculty.
Has Levitt even heard of Joe Salerno? Joe who?
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