There exists today in Anglo-American economics a veritable “conspiracy of silence” regarding the works and achievements of the French Liberal School of Economics. This is at once a sad commentary on the state of disinterested historical scholarship in the economics profession and a resounding confirmation of Thomas Kuhn’s theory of scientific progress and its applicability to the social sciences.
Needless to say, one does not undermine the “conspiracy” merely by displaying familiarity with Say’s Law of Markets in the course of extolling the achievements of John Maynard Keynes; nor even by giving a tolerable rendition of Bastiat’s “Petition of the Candlemakers” to a class of undergraduates, accompanied, of course, by the caveat that it does not apply to the “infant industry” case. Let us then breach the “conspiracy” forthwith and wholeheartedly by setting the School in historical perspective and noting its most prominent members.
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Very informative article! Thanks! I skimmed Schumpeter’s history of economics and found several other things surpising. He seemed to think very highly of Marx as a theorist, and he placed a great deal of confidence in econometrics. In one of the last chapters, he seems to say that the use of econometrics will empower central planners to perform the work of a free market without the “failures.” Knowing something about econometrics myself, I found such statements arrogant and foolish. I guess all of the great ones have some flaws.
Mises was clearly right to distrust Schumpeter. “Great ones have flaws” – eveyone does indeed have flaws, but I do not think that Schumpeter was a great economist.
In modern times there has been a strong effort in France to draw attention to the Liberal (in the liberty sense of “liberal”) school.
I do not know how successful this effort has been.
There’s dream time and there’s wake time, RogerM. Schumpeter’s History was published in 1954, and at the time of publication, there were still high hopes for econometrics revolutionizing economics held by the best and the brightests in, at least, Harvard and MIT.
Daniel,
I don’t see what your point is. The flaws in econometric reasoning go back as far as the Davenant-King “Law” of the late 17th Century. So some academics in the 1950s saw future hopes for this branch of economic science and that made it acceptable to neglect the evidence of the preceding 250 years?
On a somewhat related note, there is a quite laughable article in the recent issue of the Economist on how we cannot live without mathematical models.
Yeah, and the results of that confidence in econometrics and central planning was disastrous!
I really don’t know what you guys are talking about… my professors and, thus, everyone else (media, etc.) STILL believe in econometrics, forecasting, and studies / papers that make absurd conclusions based on bogus models and mathematical equations.
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