"Last Knight" Live Blog 10 -- Ransom
I've always viewed Schumpeter as the bogeyman of economics. Not Keynes. Not Samuelson. Not Frank Knight. More than anyone I've blamed Schumpeter for making a positivist approach to economics the de facto "scientific" conception of the discipline and for making Walrasian economics the paradigm for how to model economic phenomena "scientifically". Schumpeter is the Austrian who rejected Menger's explanatory strategy and embraced Mach's vision of science. Schumpeter is the Austrian who brought Mach with him to Harvard, and derided "old fashioned" Austrian economists among his grad students. Without Schumpeter you don't get Samuelson -- and the rivals to Keynes and Knight get taken seriously in America.
That, at least, is the cartoon of Schumpeter I like to imagine. So I was shocked to find Hulsmann crediting Schumpeter with the insight that when we express our economic valuations in action this can best be understood as an "exchange".
Let me explain. One of the things I've always liked about this notion is that it moves choice theory out of the realm of the "introspection" of inner states and inner magnitudes, and it brings it out into the public realm of interpersonal experience. It's the sort of move the later Wittgenstein would approve -- we're no longer gazing at our own private "util" in a box and we're no longer trying to measure a private "util" with a private "util" measuring stick. We're using a well-established social tool -- the shared language and experience of public exchange and all that goes with it -- and we're using that common public thing to talk to ourselves and others about a real fact about our inner lives as acting beings. We're not spinning a phantom 5th wheel, we're turning a door on real hinges. A "util" is a phantom, a 5th wheel -- but like the magician waving his cape, this 5th wheel often bewitches economists. An "exchange" however, is no phantom. It's something we're all familiar with and it's something even a 1st grader could tell about.
What shocked me is that I've always attributed the "exchange" insight to Mises, and I never would have imagined that that an economist working under the influence of Mach -- the very king of "perceiving" the contents ones own little boxes -- would have first made the decisive move outside the marginal economist's private little boxes full of "utils" and into the publicly shared language of "exchange" as a way to think and speak about private economic action. Schumpeter did it before Mises, and Mises developed the idea from Schumpeter. And I'm just astounded.
Note to self -- you really do need to read Schumpeter's Nature and Essence.
Comments (2)
I finished reading Hulsman's Life of Mises just last night. I have also read the live blogs devoted to the book. The live blogs are interesting (keep them coming) but I think the authors may be failing to see the forest for the trees.
The last paragraph of the preface gives an excellent outline of the purpose of the book. I quote here; "The main point of a Mises biography...is to come to grips with a figure who, without any significant institutional backing, by the sheer power of his ideas, inspires more than 30-years after his death, a growing international intellectual movement". Hulsman gives his answer to this question in the epilogue. In short, his answer is the "extraordinary vigor of the ideas that inspire it [the Misesian paradigm]”, especially as presented in Human Action.
In my (lay) opinion, Hulsman succeeds brilliantly. The issue is not whether Hulsman could have expanded on certain issues. No doubt he could have done so, but we have to remember that time is scarce for both the author and the reader. The book is superbly written, reads easily and is beautifully produced; but the book is already so long that the size alone may deter some from tackling it. The more interesting point is this: where will this book fit into the Misesian literature of the future?
I predict that this work will have its most important affect on young students who only exposure is to Mises.org, and who may have read introductory material such as Mises’ Economic Policy - Thoughts for Today and Tomorrow (my personal favorite introduction to Mises). I find it difficult to believe that any young person who is intellectually curious and has sentiments favorable to freedom and classical liberalism would not find this book to be fascinating; he or she would also be find plenty of incentive to read deeply in Mises works. This book is likely to have a beneficial influence on the Mises movement (if that is what we want to call it) that is second only to the publication of Human Action itself.
One of the problems faced by new readers of Mises is that he refers to personalities, issues and ideologies that strike them as foreign and irrelevant. This book lets the reader understand the context of Mises work and thus allows the reader to better evaluate the truth, relevance and importance what Mises has to say. This book will, by providing that context, make Mises much more accessible to new readers.
Henry Hazlitt said of Mises’ Human Action that it should be on the shelf of every thinking person. It became and still is the gateway to classical liberalism for most Americans; Hulsman’s book should be on the shelf of every educated person; it will be an important gateway to Mises works. Twenty years from now, it will be clear that the publication of this book was an important milestone in the continued revival of the Misesian paradigm.
Published: September 27, 2007 3:31 PM
The live blogging devoted to new releases is absolutely genius. How great to read chapter aby chapter reactions and analyses. I wish I could get to this book. But there's Rothbard's "Betrayal" and some Flynn books to get through first.
Published: September 27, 2007 4:45 PM