Modern Austrian History: A Response to Pete (Part 1)
Over the past few years there has been an ongoing and productive dialogue over the viability of alternative strategies available to young scholars seeking to pursue a vocation in Austrian economics in academia. While there have been disagreements, most parties to the conversation have treated their opponents' positions with respect and scholarly restraint.
I and others have encouraged the view that Austrians need to think of their career choices in light of their fundamental vocation. Those choices may or may not involve managing one's professional choices precisely according to a preset program as required by academic conventions. As part of this, I have suggested a new strategy in which young scholars, depending on their aptitudes and preferences, study Austrian economics, including its technical details, on an independent basis, working with institutions such as the Mises Institute, while pursuing a Ph.D. degree in economics in mainstream programs in the U.S. or in the growing number of programs available in Europe. I have also suggested that young scholars might want to consider enrolling in Ph.D. programs in disciplines that are cognate to economics, including legal studies, management, entrepreneurship, business strategy, organization, public policy, etc.
Pete Boettke has a different view. He has defended the position that young Austrians should pursue a strictly conventional path. As part of this, they would do better by pursuing a Ph.D. at a graduate program with Austrian and Austrian-friendly professors and courses. These debates have been mostly civil. Lately, however, Pete has become increasingly aggressive, if not downright intolerant, of those who propose alternatives to his strategic plan. This has culminated in his vehement and misleading attack on me for a paper I just published that did not meet his approval.
Pete's response to my recent contribution to the Festschrift for Hans Hoppe, "The Sociology of the Development of Austrian Economics," is the worst case of logorrhea I have seen in many a year. He rehashes and repeats facts and arguments that he has made numerous times before, including a tedious laundry list of his accomplishments, which, incredibly, he himself has portrayed in a previous post a few weeks ago as reflective of an academic career he considers "to be a failure." In this verbal spew, however, he completely misses the point of my essay.
Now, before I go any further in my response I want to emphasize that it is directed solely and exclusively at Pete's views, except in the cases where I explicitly mention other people. This caveat should be well noted by the reader because Pete has shown in previous exchanges absolutely no compunction in using his current and former students as well as his colleagues as "human shields," as it were, portraying any criticism of his own views as attacks on them. This rhetorical stratagem inhibits debate on important strategic and academic issues facing Austrian economists of all stripes and I am frankly sick of it. So this one is for you, Pete--and you alone.
Pete's explicit criticism of my article is easily refuted, so I will deal with it in Part 1. Much more interesting and instructive is the subtext of Pete's critique which reveals a perhaps unconscious change in his view of the dynamics of the Austrian economics movement precipitated by the shock of the publication of the Hoppe Festschrift. I will deal with this in Part 2
Regarding my article, Pete misrepresents the "punk project" I was taking aim at. I never said, as Pete claims, that the Austro-punks as individuals have "no future in economics and that there work will lead nowhere." To argue that I did is a gross and willful misreading of my article. Nor did I ever deny that the Austro-punks were bright, would have successful academic careers, publish books, write articles both in Austrian and mainstream journals, win awards, have their works widely cited or be good teachers. I defy Pete to cite any statement in my essay that can be construed in such a way.
My argument was specifically that Austro-punkism represented a meta-economic call to radically reconstruct Austrian economics from the ground up in a way that was inconsistent with the teachings of the acknowledged masters of the discipline such as Mises, Hayek, and Rothbard (See pp. 98-102 of my essay where I identify the meaning of the Austro-punk phenomenon.) In particular, I identified the silly attempt to dispense with equilibrium theorizing in Austrian economics as the essence of the Austro-punk project. My prediction that this meta-economic program would fail miserably has been borne out by subsequent developments. Indeed there was an implicit prediction in my essay that, when it came to dealing with mundane economic issues and problems, the Austro-punks would sell out their meta-economic commitments and, while clinging tenaciously to the term "Austrian economics," fall back on their "equilibrium" graduate school training. Thus I wrote (p. 103): "When pushed to analyze a real-world problem, Austro-punks generally resort to Chicago price theory, Public Choice theory, Game theory, or Transaction-costs economics, depending upon the era and institution of their graduate training." This forecast was also right on the money. In a podcast interview conducted by Russ Roberts, Boettke has characterized research at GMU as "a stew of Menger, Boehm-Bawerk, Mises, Hayek, Rothbard, Kirzner, Lachmann, Alchian, Buchanan, Coase, Demsetz, and North." Also, in enumerating his host of academic achievements--or failures, depending on which of his blog posts that you read--Pete lists James Buchanan, Kenneth Boulding, and Gordon Tullock as "acknowledged masters of economics" that he did graduate work under. Whatever the merits of these eminent economists' contributions, they are not Austrians, and even less hermeneuticians, so Pete illustrates my prediction perfectly, i.e., the erstwhile Austro-punks have abandoned their project of developing a new system or rather non-system of hermeneutical economics and, instead, employ eclectic bits of Austrian and conventional theory when addressing real economic problems.
Finally, I want to call Pete out on his false statement that the Austro-punks never "derided the masters or engaged in gross misrepresentations." Pete accuses me of "pull[ing] a cheap scholarly trick by claiming that he doesn't want to accuse any particular persons and has studiously avoided any reference to particular persons . . . " He adds that "Joe does not provide a single citation of any of the Austro-punks by name of by work." Remember the old Austrian Econ list, Pete? Well, I wrote a follow-up paper to my Austro-punk piece a few weeks later in 1995 naming names and providing quotations from this list. I sent it to Larry White, whose considered opinion in such matters I value, and asked him if he thought I should circulate it. He persuaded me not to on the grounds that it would be unnecessarily divisive. When Stephan Kinsella many years later asked me to include it in my contribution to the Hoppe Festschrift I turned him down because I did not want to embarrass you and others by airing your youthful indiscretions. However, since I refuse to stand mute when accused of rhetorical tricks by someone who seems to have a selective memory or a very tenuous acquaintance with the truth, below I provide excerpts of that unpublished paper which includes quotations. (I had photocopied and still retain in my files about 30-40 pages of similar bilge that was written on the list.) I should here note here that while I do incidentally provide quotations by Steve Horwitz, Dave Prychitcko and Karen Vaughn below, I do not wish to implicate them in engaging in falsehood because unlike Boettke they never denied publicly that they have made such statements. The extract from my paper begins in the next paragraph:
In a lecture given at the Vienna Coffee House sponsored by [Jacob] Hornberger and [Richard] Ebeling's Future of Freedom Foundation in Virginia a few days before Murray passed away [January 1995], Pete was caught on audiotape, in his typically flippant manner, unburdening himself of the following nuggets of wisdom: Murray Rothbard "fudged the data" in America's Great Depression in order to justify his claim that the 1920s was an inflationary decade and that, therefore, the Austrian Theory of the Business Cycle is applicable to explaining the Great Depression; Austrian economists should do philosophy, but they should do "good philosophy" not "bad philosophy like Hoppe." To make matters worse, this audiotape was marketed internationally through FFF . . . .
Expressions of Austro-punkism generally involve one or more of the following types of conduct: casual dismissal of the works of the masters (Mises, Rothbard, and Hayek), uncomprehending, if not whimsical, calls for a radical reconstruction of Austrian economics, gross and willful ignorance of basic Austrian works on particular subjects, and the sneering imputation, without substantiation, of other than scholarly motives to the masters as well as to workaday Austrian economists one disagrees with. The following are examples, all culled randomly from discussions on the Austrian Bulletin Board over the last year:
I think there is a strand within Mises that allows the interpretation that Salerno gives to him, but only if you read the passages that Joe uses way out of context, and have a political axe to grind in showing that Hayek and Mises need to be de-homogenized. [Steven Horwitz]
Steve has never seriously engaged my arguments in print yet blithely imputes to me and others who agree with my work, e.g., Rothbard, less than respectable motives for maintaining an intellectual position Steve happens to disagree with.
The great Rothbard possessed many qualities very brilliant (perhaps genius like [?]) ... but a large dose of the political. The political often got in the way of the scholar. . . . [Peter Boettke]
Let's see, now, when Pete and Steve (above) seriously impugn the scholarly integrity of other Austrian economists, there is nary a peep of dissent, let alone outrage, on the list; but when Pete is victimized by the harmless razzing of Hoppe, the Mises Institute is charged with complicity in precipitating an Armageddon of intolerance and factionalism within Austrian economics. Hmm, could it be that the high-flown metaeconomists are held to a different standard than we workaday Austrian economists?
But at the end of the day, Mises and Hayek (and Menger) were economists ... an economics without information and incentives is simply "bad" economics ... in fact ignornant [sic] economics--whether that qualifies for selling out to neoclassicism or not is irrelevant. [Peter Boettke]
So much for those who, like Rothbard and Mises, argue that information and learning processes relevant to the application of praxeological theorems must be drawn from historical disciplines. If it is inconsistent with Stiglitzian economics, it is beyond the scholarly pale, according to Boettke.
But really our capital "theory" is incomplete ... aborted. Hayek's Pure Theory book ... is the first of an intended two volume set. And Lachmann's book is really a prolegomena. [David Prychitko]
Has Dave carefully studied the extended discussions on capital theory in Human Action and Man, Economy, and State, let alone Garrison's writings on capital? Any Austrian economist worth the name should have, and if he has, how can he make such a sweeping claim without references to them?
I want to argue that there is a third way. That third way involves rejecting the equilibrium-bound theories of neoclassicism and versions of Austrian economics tied to equilibrium constructs for a view of economic theory that takes disequilibrium seriously .... [Steven Horwitz]
Ergo, Mises and Rothbard do not take disequilibrium seriously.
I agree that true liberals like us should have no objection to voluntary market experiments like labor managed firms. ... As for why conservatives are generally against worker management I think that has to do with a certain kind of mentality that wants to keep people in line and assert their own authority over others. [Karen Vaughn]
Gee, Karen, quite insightful--but hasn't Mises written a 40-page article analyzing the shortcomings of producer cooperatives? And what about Rothbard's argument that workers prefer capitalist firms because the former would rather rid themselves of the burdens of entrepreneurial uncertainty and capitalist waiting for income? Why doesn't the chronicler of the neo-Austrian School deign to meet or even mention their arguments instead of smearing them as narrow-minded conservatives?
The younger generation of Austrian economists, I would suggest, if they are going to improve the theory must kick the old masters in the head; destort [sic] their teachings; pollute it with ideas from other traditions ... in a word--reconstruct. [Peter Boettke]
In this last quote, Pete, of course, means polluting Mises and Rothbard with the likes of Joe Stiglitz, Douglass North, and Alfred Chandler, his neoclassicals du jour; but if, for one glorious moment, we take Austrian economics as the cozy network of confreres and chums portrayed in Karen's book, and which Pete usually has in mind when he uses the term, then the pollution of the clubby atmosphere of Austrian economics has already begun with the Austrian Scholars Conference--and Pete soon will be getting a lot more pollution than he ever bargained for, and from young and serious scholars whose names he doesn't even know yet.
Comments (68)
GilesStratton
Keep at this long enough and you guys will prove Milton Friedman right.
Published: August 7, 2009 11:49 AM
Troy Camplin
The masters are the masters, of course -- but should the remain unquestioned? Unimproved? One should be careful that one is in fact improving, of course, rather than undoing what the Austrians themselves fixed, and one should acknowledge all the work actually done, but this comes a little close to unquestioned devotion for me.
Published: August 7, 2009 12:14 PM
Wayne
Four cheers for Dr Salerno. There is only so much abuse a true scholar and gentleman such as himself can only take. To date he has ignored it. But enough is enough. Bravo Sir!
Published: August 7, 2009 12:25 PM
Nikolaj
Troy,
in my view there is nothing wrong with the attempts to prove Mises or Hayek or anyone else wrong. I respect immensely Rothbard because he actually proved Mises wrong in a couple of very important things, such as theory of monopoly and monopoly prices, and setting the record straight with banking theory where both Mises and Hayek left some room for misunderstanding in their various works. But those revisions were largely "immanent critique" as philosophers like to say - attempts to show some particular doctrine of Mises was incoherent with that general Austrian methodology and basic principles he devised and professed.
The problem with prevailing approach of "Northern" Austrians is that they completely abandon basic framework of Austrian theorizing, while at the same time claiming they are "Misesians" or "Hayekians" still. I don't want to judge - maybe Austrian hermeneutics is superior to Misesian praxeology, maybe Rothbard really fudged the data to deceive people into believing 1920s were inflationary decade, or maybe Friedman was right that Great Depression was caused by Fed not inflating enough. They are free to belive that and argue openly accordingly. But they are not free to claim that Rothbard fudged the data on Gd to falsely blame inflation for it, and that Austrian explanation of GD was bunk, and that basic tenets of Austrian methodology are wrong, and at the same time to claim they are Austrian economists. That's contradictory.
Published: August 7, 2009 12:29 PM
Wayne
Get ready for a deluge of abuse from anonymous cowardly GMU students on here to defend their deity Boettke.
Published: August 7, 2009 12:31 PM
Nikolaj
Troy,
in my view there is nothing wrong with the attempts to prove Mises or Hayek or anyone else wrong. I respect immensely Rothbard because he actually proved Mises wrong in a couple of very important things, such as theory of monopoly and monopoly prices, and setting the record straight with banking theory where both Mises and Hayek left some room for misunderstanding in their various works. But those revisions were largely "immanent critique" as philosophers like to say - attempts to show some particular doctrine of Mises was incoherent with the general Austrian methodology and basic principles he devised and professed.
The problem with prevailing approach of "Northern" Austrians is that they completely abandon basic framework of Austrian theorizing, while at the same time claiming they are "Misesians" or "Hayekians" still. I don't want to judge - maybe Austrian hermeneutics is superior to Misesian praxeology, maybe Rothbard really fudged the data to deceive people into believing 1920s were inflationary decade, or maybe Friedman was right that Great Depression was caused by Fed not inflating enough. They are free to believe those things and argue accordingly. But they are not free to claim at the same time to claim they are Austrian economists or "Misesians". That's baseless.
Published: August 7, 2009 12:33 PM
Ohhh Henry
Quite aside from most of the above discussions, on the question of how best to practice and advocate Austrian economics, I would like to recommend a short story by Ray Bradbury, "The Man the Rorschach Shirt".
In this story a man practices psychiatry informally by wandering around engaging people, listening and talking to them and trying to help them improve their lives and improve the world - but without renting an office, hanging a diploma on the wall, taking appointments, publishing academic papers, etc.
This option is open to everyone with knowledge of Austrian economics, and in many ways it is the most desirable way to share one's knowledge because there are only so many academic positions in the world, many of these positions are tainted by government ownership or subsidies, and by extension almost the entire world of government-funded academia is somewhat disreputable and can be a difficult place in which to thrive without compromising principles.
Furthermore the essential facts of human action and therefore of Austrian economics are quite simple and easy to understand and explain. If we are to make any real headway in educating the world, much of that education will necessarily consist of making basic, simple points to ordinary people in non-academic settings. Meaning, in conversations with family members and colleagues about practically any subject in the field of public policy or finance, by participating in blogs, adding succinct comments to online news stories which illuminate the fundamental, simple facts of economics, and so on.
Future von Mises' and Rothbards will find their way through the minefields of academia one way or another. For the rest of us I recommend a lifetime career as a part-time unlicensed instructor in the science of human action. Speak the truth, live the truth.
Published: August 7, 2009 12:40 PM
Lee Kelly
Oh, for Pete's sake! Just kiss and make up.
I shudder every time someone calls Mises, Rothbard, or Hayek (who I like much more) "the masters." In fact, it bothers me that the Ludwig von Mises institute is named after Mises, and that the Austrian economics tradition is named by nationality of its founders.
Anyway, it seems to me that Boettke, Prychitko, etc., disagree with the Rothbardian interpretation of Mises, and also have some objections to Misesian epistemology and methodology. There is also some controversy with regard to fractional reserve banking and monetary expansion. But, for the most part -- and to almost everyone outside of the Austrian economics club -- they are Austrian economists.
I suppose that within Marxist circles there are people arguing about whether someone is a true Marxist, a Stalinist, a Trotskyist, or whatever. But, for everyone else, they are broadly in agreement on most issues -- they are all communists of one stripe or another.
Though one thing that strikes me as inconsistent, (and perhaps this is merely on the part of Boettke et al.), is that they both explicitly disagree with the masters' work, and try to reinterpret it for their own purposes. That seems rather schizophrenic, unless they just honestly believe their reinterpretation is correct.
But whatever. While I think Austrian economics is great in many respects, I think it also has a lot wrong with it. In my opinion, if it is to progress, and become a stronger program, it needs to evolve some of its core propositions. But if the teachings of "the masters", worts and all, define it forever more, then I hope it dies quickly so that something better can take its place.
Published: August 7, 2009 1:31 PM
EIS
Salerno is absolutely right; Pete Boettke on EconTalk said that he doesn't see why the monetarist explanation of business cycles and the ABCT can't work together (?!?). These so-called Austrians continuously claim that Mises and Hayek, in the latter part of their careers, supported FRB (!!?!). They claim that the supply of potential loans should expand to meet increased demand, that it's "elastic." This is not Austrian economics, I don't know what it is, but it's definitely not Austrian.
Published: August 7, 2009 1:32 PM
GilesStratton
Wayne:
"Get ready for a deluge of abuse from anonymous cowardly GMU students on here to defend their deity Boettke. "
Need one be a student at GMU in order to defend Peter Boettke? I don't attend GMU, I study economics over in Europe and yet I would go out of my way to defend Professor Boettke who I see as a principled academic who has done a great deal of work in furthering the Austrian school and has cultivated a great number of top students who are working to do the same.
As for the term "rude", what do you call comments such as the one above made by Lord Buzungulus? Scholarly?
[redacted]
Published: August 7, 2009 1:51 PM
John
Way to go Prof. Joe!
I can't access the online version of it, but Boettke's journal has papers in the September edition by a commies.
[redacted]
Published: August 7, 2009 1:56 PM
J Cortez
I realize that Salerno is for the most part going after Boettke and people like him, but it's still hard for me not to see this as another GMU vs the Institute argument.
Still, while I usually don't like seeing that argument happen as I see it as useless, I think Salerno is completely correct here. It's one thing to have differing opinions on what students should do career-wise, but for one person (or group of people) to perpetuate inaccuracies is just cause for them to be attacked. This is no petty argument, Salerno has said something substantive.
In regards to the Econtalk interview on business cycles, I was wondering why Roberts didn't talk to Roger Garrison, who in my mind does a the best job explaining the process.
Published: August 7, 2009 2:26 PM
buz
The current Boettke vs. Salerno disagreement seems to be based on little that is important. It is not clear that they have all that much real disagreement on educational and academic issues. If young readers see that the economists who've studied Austrian writings the longest are spending their time on these sorts of arguments, they might decide they want nothing to do with Austrianism and that they will study something else. Personally, I think that "promoters" of the ideas of Mises, Rothbard, Hayek and related writers would be at their most effective, both in academia and outside, if they did something like this.
1. Make the most important readings available, cheap and easy to access
2. Provoke people into reading them, and help them decide which documents to choose
3. Leave them free to arrive at their own conclusions about the ideas
4. Don't expect people to 'convert' to any doctrine, don't expect them to oppose "non-Austrian" ideas, and don't expect loyalty to anything, and don't act like people are breaking a rule when they read and agree with some ideas from Samuelson, Krugman, or Stiglitz (for example).
The emphasis should be on reading, thinking, and ideas, not on loyalty, advocacy or opposition to anything.
Many people have never read ideas like those those written in Hayek's "Use of Knowledge in Society" or Sowell's "Knowledge and Decisions". Just getting those ideas into one's head for consideration makes a difference. Getting someone to be for or against a document or person without having read them, as sometimes happens, is a different thing, and in my opinion not as good.
Published: August 7, 2009 2:49 PM
Stephan Kinsella
A reminder for posters to post civil comments. Some comments that were personal or incivil (most directed toward Dr. Boettke) have been redacted or deleted. Let's stick to substance, please.
Published: August 7, 2009 3:47 PM
Misesian
Here's a thought. How come Boettke and company never sneer at Tom 'never published anything' Palmer for not regularly publishing in their approved journals but constantly pontificating on economics and political philosophy?
Oh I forget. Palmer - like them - is a DC establishment 'Austrian'.
Thanks heavens for the Mises institute.
Published: August 7, 2009 5:28 PM
Ball
I don't know where this bickering will lead, but i'll have to count myself as firmly within in Joe's position, at least so far as his arguments go (although perhaps not in tact). His advice to scholars, his understanding of Mises' methodology (and why it is distinctly "Austrian" and superior), and, to some point, his characterization of the re-constructionists.
On theory, Hülsmann's article has yet to be addressed by any of them, to my knowledge.
My main concern is where this will lead. My hope is some will consider the error of debating the Austrian perspective within a construct where it cannot be used to make real events better understood. I'm not sure it will, though. The more the debate devolves into personal invectives and measuring of CVs, the more I fear reconciliation cannot be achieved.
Can't we start with some common ground before pointing out our differences?
Published: August 7, 2009 5:42 PM
Ball
I think one area of common ground is accepting that there have been many insights on the subject of economics which Austrians cannot claim are theirs, and must not fall into the "Not invented here" syndrome. The solution, however, is not to try and meld the various schools of thought and their differing methodologies and world views, but to adopt these insights within the (causal knowledge) framework of methodological individualism. This is truly the only way to make such insights understandable, even if they were first realized by people who don't know money from a hole in their head.
The obverse is also true. Understanding genuinely Austrian insights requires understanding Austrian methodology. If you do not believe that Austrian methodology is the method whereby social sciences are understandable, then how can you claim to be of the Austrian school or tradition? Next we will hear of Keynesians who aren't in favor of government spending and don't believe in concepts such as aggregate demand.
Published: August 7, 2009 5:53 PM
Misesian
Ball has a point, but we must remember that Dr Salerno has long bit his tongue in the face of repeated vitriolic attacks from Boettke, Horwitz, and other GMUers.
I for one am glad to see that Dr Salerno has decided enough is enough and that it is time to rebut their childish arguments.
Left libertarianism is a baneful influence. The Mises Institute is one of the last best hopes of Western civilization and the Austrian tradition.
Published: August 7, 2009 5:54 PM
Ball
Misesian,
I'm not sure you can characterize them all as left-libertarians, or even that political in their writings.
I also don't think the 'left' moniker is one I would want to disown wholly. At the risk of going off on a tangent, the original left, above all, were against privilege. I think many people who believe in self-ownership are concerned (to say the least) that land ownership (and ownership of perhaps other key resources) can create a form of aristocracy or privileged class which creates a disadvantage to other people in a manner distinctly different that natural ability or environment.
I'm not saying I believe any of that, but it shouldn't be dismissed out of hand, especially since we cannot ever rid ourselves of politics and that wealth can only buy so many material things, after which the only things for sale are favors and connections. Try to get a job anywhere without these social factors being highly influential, if not paramount.
I think the discussion here, however, ought not focus on the politics, but on our common interests of truth, knowledge, and calling a spade a spade (and perhaps helping scholars gain success, and as you put it, save civilization).
Published: August 7, 2009 6:08 PM
Misesian
Actually, to add to what I just said, I head that a lot of the work done by GMU "Austrians" (especially "The Invisible Hook" and "After War") was actually stolen off some of Rothbard's notes.
Published: August 7, 2009 8:02 PM
Richard
"these so-called Austrians continuously claim that Mises and Hayek, in the latter part of their careers, supported FRB (!!?!)"
Didn't Hayek say that abolishing FRB would be impractical? I know Mises was firmly anti-FRB but Hayek I'm not so sure. Can't remember what he said in the denationalization of money.
Published: August 7, 2009 8:21 PM
Misesian 1
Where is the evidence that stuff is ripped off from Rothbard's notes? Sounds like bunk to me.
Published: August 7, 2009 8:53 PM
newson
to richard,
the early mises (tmc) wasn't especially hostile to frb, the late mises (ha and beyond) was.
the gmu crowd draws inspiration from the early mises for this very reason.
Published: August 7, 2009 9:24 PM
Lord Buzungulus, Bringer of the Purple Light
newson,
You are right, there is indeed tension in Mises' work on this issue, as well as on socialist calculation. I would think the objective should be to resolve these tensions, not to selectively draw from one era over another in the hopes of painting a picture of seamless progress within the school (apart from Rothbardian deviations), which again, you rightly note is the M.O. of many GMU school Austrians. Scholars like Huelsmann have made great strides in addressing some of these questions (e.g., on error cycles), and there should be great annoyance when people like Horwitz try to avoid serious debate between the two camps by appealing to allegedly spotty publication records by LvMI scholars as a sort of filter for disregarding that work.
Published: August 7, 2009 9:34 PM
Ashton
If these are the most damning quotations you can come up with, then this argument is even more pathetic than I thought.
Published: August 8, 2009 12:43 AM
Lord Buzungulus, Bringer of the Purple Light
Steve weighs in:
http://austrianeconomists.typepad.com/weblog/2009/08/correcting-the-factual-record.html#comments
He's right that he has responded to Salerno on the dehomogenization debate. But again, where's his critique of Huelsmann's paper, "Knowledge, Judgment, and the Use of Property?" Where's a response to this paper by *any* GMUer?
Here's a convenient link, if anyone needs it:
http://mises.org/journals/rae/pdf/RAE10_1_2.pdf
While he's at, Steve might also want to address Huelsmann's work on revising ABCT, since Steve is a more-or-less conventional adherent of that theory.
Published: August 8, 2009 7:31 AM
Ozzie
Also, you might all want to recall that Boettke seriously dissed Dr Ron Paul (who after all, wants to get back to hard money) while fawning all over Sarah 'I worship the state and fiat money' Palin on his blog at one point!
Published: August 8, 2009 7:37 AM
Ashton
"Where's a response to this paper by *any* GMUer?"
What exactly is so important that it needs to be responded to? It's more of the same about how knowledge isn't primary. At least he didn't presume Hayek was an idiot like Hoppe did.
Published: August 8, 2009 9:00 AM
Lord Buzungulus, Bringer of the Purple Light
Ashton's response speaks for itself.
Published: August 8, 2009 9:22 AM
Troy Camplin, Ph.D.
I think this discussion begins to make sense of the responses I received regarding some queries I made about getting a Ph.D. in economics (I already have one in the Humanities) at GMU and here. So far as I can tell, only GMU and NYU offer a Ph.D. that would allow focus on the Austrians. Inquiring here as to what to do, it was suggested that a Ph.D. anywhere in general economics was better than a Ph.D. that focused on the Austrians. In light of comments made here, was that meant to discourage my going to GMU? When I inquired at GMU, Caplan strongly encouraged me, but Boettke recommended a postdoc, suggesting Mario Rizzo (who said NYU unfortunately didn't have the funds at present for a postdoc position). All of this leaves me wondering what on earth I really should do. I would love to do a postdoc -- but where, and with what money? And after the last year and a half of unemployment, where the only money I made was to talk about Hayek and spontaneous orders, I am thinking I ought to get a degree in economics. But where? And, I am wondering, too, about the advice I received now.
Published: August 8, 2009 12:06 PM
Ozzie
Anyone hear Boettke's response? Or am I just imagining the choir of crickets!!!
Published: August 8, 2009 5:20 PM
buz
Troy,
When answering these sorts of questions, people will tend to have natural, honest and respectable biases, incentives, and agendas. People who work and teach at a university cannot be expected to give the same answers as those who don't work there. I don't think it's accurate to say that NYU would let you focus on Austrians. They have a highly ranked, very selective modern conventional graduate program, and a non-credit seminar offered on the side, and a small number of people there who've studied Austrian ideas. In the US and Canada, I think it's a mistake to deny that GMU is a serious option, that is up and running right now, for people who want to be studying and writing "Austrian" ideas and do not want to do the full conventional training, as there is not enough time to devote a full time effort to both. I don't know if this is true, but I've heard West Virginia University might have side options that could be compared to the non-credit Austrianism seminar at NYU. My opinion is that a Ph.D. in economics is a sensible investment mainly for people who'll be seeking academic jobs after that. I consider M.A. programs in economics in the US rarely, if ever, worth it. If I wanted to be a free-market/libertarian guru or activist I probably would not do any graduate degrees in economics; I'd just look for work that pays immediately, perhaps with political organizations, and read what I need on the side. If you haven't studied mathematics in a while, and your first Ph.D. was in a non-mathematical topic, there might be valid concerns, both by the admissions committee and by you, that you wouldn't be prepared for the typical econ Ph.D. program. In that case, GMU and other places with a greatly reduced emphasis on mathematics might become the better options. Some people fail exams and have to leave mathematical programs, and probably could have finished at places like GMU. If I were in your situation I probably would not do a second Ph.D. at all, especially if my age is over 40. If I had to do one in economics in the US or Canada, I would consider GMU the main option and WVU an alternate. I barely know the names of the options outside the US and Canada, but apparently there are options in other continents, some of which would allow focus on the Austrians. If you are over 40 and your math background is still minimal, I'd probably rule out all econ Ph.D. programs except for the least mathematical ones, such as GMU and departments in other continents that are studying the Austrians. Also, before you decide to apply to conventional econ Ph.D. programs, go to an academic library and read the exact textbooks you'd have to study at a conventional econ Ph.D. program, which is what NYU is, so you'll know what you'd be getting into. Some people do that, and decide they don't want to do it. You'd have to do the stuff in a micro textbook such as that by Mas-Colell/Whinston/Greene or Jehle/Reny, or like this free online book:
http://arielrubinstein.tau.ac.il/Rubinstein2007.pdf
That is just for micro, but also read the common macro (Romer, Sargent, Lucas) and econometrics textbooks that are assigned at conventional econ Ph.D. programs. You might also post about your unconventional background/situation and ask for advice at this board
http://www.urch.com/forums/phd-economics/
Which has people far more knowledgeable than me, and is devoted to these types of issues. Best of luck.
Published: August 8, 2009 6:08 PM
Troy Camplin, Ph.D.
I've been looking for work that pays for over a year and a half now, and I've come up with nothing. I've tried places like Cato, etc., and the response was "We don't have the foggiest idea what to do with you." I had one college tell me I didn't have enough philosophy for their program, and another one tell me I had too much for theirs. I've had an English dept. tell me I was overqualified for a position that required a Ph.D. So what is someone who has a Ph.D. in the humanities, a M.A. in English, and a B.A. in recombinant gene technology, who has a book out on systems philosophy (Diaphysics), published on game theory and literature, has published poems and short stories (and had a play performed -- and win the festival it was entered into), and presents conference papers on spontaneous orders to do for work? I don't know. And, so far, nobody else has been able to tell me, either. All I've been able to come up with is getting a Ph.D. in something else.
Published: August 8, 2009 9:07 PM
buz
That is quite a diverse background. It's like you're so unpredictable that one cannot safely make any conclusions or suggestion about your predicament. I'm kinda skeptical of the idea that your best option is to do a second Ph.D., in economics, especially if you might not be that interested in an academic economics career after that. But, if you had a funded spot in economics, then it might be better than being the stereotypical guy with a Ph.D. in humanities who drives a taxi cab, and gets featured in jokes about the Humanities. And, if you're very interested in economics, of the sort emphasized in that department and Ph.D. program, then that is something. If your economics interest is very specific the Austrians, then the risk is that you'd get your second Ph.D. in a special type of economic thought that isn't valued by anyone who hires people. Then you're the guy with two Ph.D.s and whose best option is to drive a taxi cab, who is featured in jokes that are both about Austrian Economics and about the Humanities. If I had that many degrees in things that aren't necessarily valued by employers, my instinct would be to look for work as a teacher at some level of education. But you might have tried that already.
Published: August 8, 2009 10:29 PM
Not a GMU student
This is just getting out of hand. I don't think there was any need for this response.
I think the LvMI needs to really assess what offenses they are willing to metaphorically kick people out of the tradition for. I love Hayek and Mises, but I am methodologically opposed to praxeology, do think Rothbard plays with data and source material, and agree with the free bankers (pro fractional reserve). I also think that Friedman's account of the great depression *may* be reconcilable with the Austrian position. And this is from someone who was once a 100% Rothbardian.
If that "kicks me out" of the tradition, then so be it, I'm not big on labels anyway. But of course, I'll still be exposuing ABCT, Mises, Hayek, and even certain scholars from the LvMI.
Published: August 9, 2009 12:12 AM
newson
to n.a.g.s:
you've proved salerno's point. once austrianism can mean anything, it means nothing.
Published: August 9, 2009 2:41 AM
Vanmind
Dear prospective PhD student,
Please consider, instead, leaving high school once and for all.
Published: August 9, 2009 6:15 AM
Roderick T. Long
I ain't touching this dispute, nohow. But I have a question: what is the title of Mises' "40-page article analyzing the shortcomings of producer cooperatives"?
Published: August 9, 2009 10:56 AM
Lode Cossaer
Could anyone please explain the relevance of this discussion?
The important point I see, is simply that there is a difference between ´AE´ and ´AE mixed with other disciplines´. That is true and is a difference we ought to bear in mind. Neither of the 2 things are bad, imo. I I like Mises work and GMU work and I love the discussions between them, when they are actually discussing AE.
Or am I missing something important?
Published: August 9, 2009 12:50 PM
Sid Vicious
Lode, there is no relevance, although it is entertaining I admit. Even if you are inspired by and use insights from Austrian economists, the LvMI'ers don't like when you use the word "Austrian" if you are not sufficiently loyal to the canonical texts. I say let them have the label then. Is there really anything else at issue here other than their views about graduate school?
Published: August 9, 2009 1:51 PM
Ozzie
It is also noteworthy that many GMU economists (Vernon Smith and Don Boudraux spring to mind) have frequented Bush Whitehouse parties and like to have the ear of important Republicans.
Can anyone imagine Dr Hoppe or Dr Salerno accepting an invite to a DC political class cocktail party?
Published: August 9, 2009 2:38 PM
EIS
Newson said; "to richard, the early mises (tmc) wasn't especially hostile to frb, the late mises (ha and beyond) was. the gmu crowd draws inspiration from the early mises for this very reason."
This is a claim made by many so-called "Austrians,"
and yet, I can't find any justification for it whatsoever; it simply doesn't exist in either Hayek or Mises' earlier works. Here are some quotes:
"The doctrine of the elasticity of fiduciary media, or more correctly expressed, of their automatic adjustment at any given time to the demand for money in the broader sense, stands at the very center of modern discussions of banking theory. We have to show that this doctrine does not correspond to the facts, or at least not in the form in which it is generally expounded and understood." Pg 339
“It was the aim of the Currency School to prevent the periodical recurrence of general economic crises by setting a maximum limit to the issue of uncovered bank notes. An obvious further step is to close the gap that was not reckoned with in their theory and consequently not provided for in their policy by limiting the issue of fiduciary media in whatever form, not merely that of bank notes. If this were done it would mean it would no longer be possible for the credit-issuing banks to underbid the equilibrium rate (natural rate) of interest and introduce into circulation new quantities of fiduciary media with the immediate consequence of an artificial stimulus to business and the inevitable final consequence of the dreaded crises.” Page 439 (All forms of money, in the broader sense, should be fully covered; what’s that sound like to you?)
Here's Hayek:
"Nevertheless, it is perfectly clear that, in order that the supply and demand for real capital should be equalized, the banks must not lend more or less than has been deposited with them as savings. And this means naturally that they must never allow the effective amount of money in circulation to change.... The banks can either keep the demand for real capital within the limits set by the supply of savings, or keep the price level steady; but they cannot perform both functions at once." Page 218, Lecture 1, Prices and production. (Couldn’t be more clear)
"If it were not for monetary disturbances, the rate of interest would be determined so as to equalize the demand for and supply of savings. This equilibrium rate, as I prefer to call it, he christens the natural rate of interest. In the money economy, the actual or money rate of interest ("Geldzins") may differ from the equilibrium or natural rate, because the demand for and the supply of capital do not meet in their natural form but in the form of money, the quantity of which available for capital purposes may be arbitrarily changed by the banks, causing disproportionalities." Pg 215, Lecture 1, Prices and production, F.A von Hayek
Basically, you can be an economist and support FRB, "stable price" mandates, and a pure mechanical approach to quantity theory, but you cannot consider yourself an Austrian. It seems that neo-Austrians are more interested in receiving Nobel prizes than actually spreading Austrian economics; that is, free market economics. It is true that Mises believed that FRB would eventually collapse on itself through a free banking system, but this does not mean he supported FRB (that's like saying Marx supported capitalism).
Published: August 9, 2009 3:39 PM
Bruce Koerber
Classical Liberalism Protection
Sunday, August 9, 2009
Recognizing The Mises Institute As A Foundation For Classical Liberalism.
There is no doubt that the Mises Institute is centered and focused and is providing a foundation for the future of classical liberalism.
However, there is a doubt that there is a perpetual thread of classical liberalism that can be attributed to Peter Boettke or to George Mason University for that matter.
If for no other reason, the proper relationship would be one of humble appreciation of the Mises Institute and all that it stands for by Peter Boettke.
Is that possible? Isn't hermeneutics a manifestation of ego-driven interpretation?
Published: August 9, 2009 5:16 PM
Martin
I think Bruce is on target here. As any former Boettke student will tell you (I've met a few and they are quite candid here), Boettke's psychology is a bizarre mix of massive ego (I am a demi-God) and total self-loathing (due to his weight problem perhaps?).
Thanks heavens for Joseph Salerno.
Published: August 9, 2009 5:30 PM
Troy Camplin, Ph.D.
My interest in economics is quite extensive. I was introduced to economics in an intro. to philosophy class I had at Western Ky Univ. with Ronald Nash. Because of his class, which spent a great deal of time on the philosophy of economics, I began reading economics on my own. This led to my taking an intro. to econ. class, which led the Econ. Dept. at WKU to give me their free market scholarship. I used ideas form Hayek and Mises in my dissertation, and I have attended the Fund for Spontaneous Orders conference, which I will be attending again this Fall, and a colloquium on Hayek this past June. I am interested in self-organizing systems -- which comes from my interests in biology and economics. As a scholar I am interdisciplinary in scope. It's not that I'm unpredictable -- in fact, I am predictably interested in the nature of self-organizing systems, no matter what that system may be -- but more that people don't know what to do with an interdisciplinary scholar. Unless you can be pigeonholed, nobody wants to talk to you. Never mind that an interdisciplinary approach will give you insights that a narrowly disciplinary approach will never be able to give. Which is why interdisciplinarians like Stuart Kauffman, J.T. Fraser, F. A Hayek, Frederick Turner, Darwin, and Goethe have had the most profound insights. Interdisciplinarians certainly need the disciplinarians' work, but at the same time, we need those capable of integrating -- of seeing how the world as a whole works. Everybody reveres these people, but nobody wants to hire them. Not that I think I'm in any of these people's league, that's for certain. But I do use their methods in my work. In the end, I love economics, and I think I would do well in an economics program -- but I also know myself well enough to know that I would need to be in a program using methods with which I agree (and math is more simplifying than the scientism of which Hayek complained -- and has only very limited value in helping one to understand the nature of the economy as a complex system). If anyone has a better suggestion for me, I'm all ears.
Published: August 9, 2009 5:56 PM
Martin
Will part 2 be posted online in the near future?
Published: August 9, 2009 6:32 PM
Lord Buzungulus, Bringer of the Purple Light
Martin,
Ouch! But, in light of the blog post Prof. Salerno alludes to, where Boettke characterizes his career as a "failure" (one of the most bizarre confessions I've ever seen someone make about themselves; I mean really, show some dignity), what you write there sounds accurate.
Published: August 9, 2009 6:44 PM
newson
to eis:
mises, referring to the frb banker(tmc 1980, p.299):
"is therefore in a position to undertake greater obligations than he would ever be able to fulfill;it is enough if he takes sufficient precaution to ensure his ability to satisfy promptly that proportion of claims that is actually enforced against him."
this is one example of the tmc mises (the bolding is mine), who appears less than totally hostile to frb. in tmc, he supports free banking with the view that without special privilege, banks will be constrained in issuing fiduciary media. it seems he is content that the process be limited, not that it is wrong in and of itself, as per rothbard.
i'm not especially familiar with hayek, though my understanding is that he was resigned to the fact that frb was here to stay, after centuries of practice.
for the record, i oppose frb, and think the free-bankers are selling a dud product. but the money equilibrium crowd do base their arguments mainly on tmc, which allows them more wiggle room than ha.
Published: August 9, 2009 7:06 PM
buz
It might help to make a distinction between a mere interest in economics, and an interest in that which is written in typical academic economics departments in 2009 (not that there is zero overlap between these things). It is possible to be very passionate about economics, and to love reading Adam Smith and Hayek, but to want nothing to do with the stuff done in Ph.D. econ programs. The number of Ph.D. econ programs that do eclectic Hayekian no-math stuff is very small. Your appropriate options might be rather few. Maybe GMU, Claremont, maybe a few other unusual or heterodox departments, and then some Austrian options in other continents, which are often in non-English speaking countries. If you do an econ Ph.D., then write an interdisciplinary, no-math, or Hayekian sort of dissertation, you might not have any of those job options for which an econ Ph.D. is needed. Then you'd be in the situation where it wasn't worth all the work you just did.
I believe econ Ph.D.'s make sense mainly if you think you'll be serious about going on the academic job market, or something else for which the econ Ph.D. was needed, and you will be serious about giving your prospective employer what *they* want, even if much of it is not what interests you the most.
One thing about academic jobs is that they are sometimes discussed as if they were completely different from all other jobs where someone writes you a sizable paycheck, and I don't think they are that different. I used to work at a giant retail store, and the message board conversations that aspiring econ professors have about their job market papers and publications are not that different from the conversations of department and store managers about how they try to meet their quotas and company requirements.
As a funded econ Ph.D. student you might live on $23,000 per year, work well over 60 hours per week, and have to work very hard on difficult things. Pretty much any physically able male can make more than that working a less than huge number of hours, at work you don't have to think very hard about, if they're willing to be a laboring *participant* in a mixed-market spontaneous order economy instead of just reading, writing, and talking about them. Especially if your age is over 40 and mathematical economics is not your cup of tea, as I suspect might be the case, I doubt an economics Ph.D. is a good option that you will look back on as the best decision you ever made, as either a human capital investment or in the intellectual sense. If you do a Ph.D. in economics based on an unconventional no-math approach, you could end up in the situation where you have a Ph.D. but can't read and understand the leading academic journals in the subject in which you have worked so hard to get a Ph.D. This outcome should be regarded as highly disappointing, and I don't understand why some people choose an educational strategy that leaves them in that situation.
If you can't think of any better options than an econ Ph.D., I don't think that is a good enough reason, because the other options still exist even when you don't think about them.
Published: August 9, 2009 7:41 PM
jeffrey
some goofy formatting, Rod, but here it is
http://mises.org/mmmp/mmmp18.asp
Published: August 9, 2009 8:06 PM
buz
I'm doubtful that there's a hiring bias against interdisciplinary scholars. Some of the more successful academics of whom I know, in a variety of subjects, had a background in multiple subjects, and used multiple subjects in their work. There might be interdisciplinary people who don't get hired, but I doubt it's because of being interdisciplinary.
Published: August 9, 2009 8:37 PM
Troy Camplin, Ph.D.
That's been my experience, and that's what the people hiring me told me. I suspect the academics you know were hired in a particular discipline and then proceeded to use an interdisciplinary approach for their work. That's what all the interdisciplinary scholars I know did.
Published: August 9, 2009 9:35 PM
EIS
Newson,
The quote you provided is extremely vague and was made by Mises in 1980, and yet you claim this is the "TMC Mises." The quotes I provided directly come from TMC, and nowhere does he defend FRB throughout the entire book. In fact, TMC explains how fiduciary media is solely responsible for business cycles, and how it stems from FRB. Basically, he spends about 200 pages explaining that the currency school didn't go far enough, that all forms of money should be fully covered (100% reserve). If I'm wrong, please show me, I have TMC right in front of me.
Published: August 9, 2009 9:58 PM
newson
to eis:
the page number is from the 1980 edition of tmc, but the words are those of the original. on the mises pdf version of tmc it's to be found on 271/498, the book page is 267.
Published: August 10, 2009 12:37 AM
newson
"The progressive extension of the Money Economy would have led to an enormous extension in the demand for money if its efficiency had not been extraordinarily increased by the creation of fiduciary media. The issue of fiduciary media has made it possible to avoid the convulsions that would be involved in an increase in the objective exchange value of money, and reduced the cost of the monetary apparatus. Fiduciary media tap a lucrative source of revenue for their issuer; they enrich both the person that issues them and the community that employs them."
tmc (pdf from mises.org) p323 (327/498).
like i said, not exactly hostile.
Published: August 10, 2009 1:23 AM
Stephan Kinsella
Bruce Koerber: "If for no other reason, the proper relationship would be one of humble appreciation of the Mises Institute and all that it stands for by Peter Boettke."
Bruce, have you seen Boettke's post here?
The Mises Institute Does Amazing Work
Published: August 10, 2009 10:15 AM
N.A.G.S
"to n.a.g.s:
you've proved salerno's point. once austrianism can mean anything, it means nothing."
Okay, fine. Like I said, I don't really care that much about titles anyway.
But what does that make me? A "mainstream" guy who believes wholly in ABCT, takes subjectivism and radical uncertainty seriously, and views Hayek and Mises as the supreme economists of the 20th century?
Does that even make sense?
Published: August 10, 2009 2:00 PM
Lord Buzungulus, Bringer of the Purple Light
I see over at the GMU blog Steve has deleted any posts challenging him to respond to Huelsmann's work on the dehomogenization debate. What a coward that guy is.
Published: August 11, 2009 6:59 AM
Jane
Readers may want to check out the GMU Boettke blog. They are having a Murray Rothbard lovefest!
I bet the great man is turning over in his grave. Shame on them.
Published: August 11, 2009 5:52 PM
Heretic
"Shame on them"? Are you serious? Should they have gotten permission from the Mises Institute first?
Published: August 11, 2009 8:18 PM
Jane
Heretic
If they wanted to aspire to any degree of moral behavior, the answer is clearly yes.
Dr Rothbard would surely not be happy at the mockery they are making of his radically moral anti-state agenda. Would he approve of Boettke's sucking up to statists like Edwin Feulner of the evil Heritage Foundation and the 'how many Republican's can we buy today' Kohk brothers.
Boettke is a disgrace. And notice he is too cowardly to even address Dr Salerno's objections to his leftist agenda.
Published: August 12, 2009 4:43 PM
Jane
& now we have the all-too typical and less than edifying spectacle of 'austrians' disparaging and mocking Mrs von Mises
http://austrianeconomists.typepad.com/weblog/2009/08/two-more-old-pictures.html
Is there no depth to which these so-called 'austrians' will sink? One would have sincerely hoped that Dr Damico would have known better than to join the rest of the 'lets hang out in a sewer' collective.
Published: August 12, 2009 4:54 PM
Daniel J. D'Amico
Uh... Hi Jane,
I don't mean no harm to poor ol' Margit. I got nothin' but love. Heck I posed the idea to Nick Sensation back in the day, that we should release a cover track of the Dirtbombs - Motorcity Baby in her honor. When they sing, "motorcity baby" we would sub in "Margit von Mises."
Check 'em out here:
http://www.youtube.com/watch?v=ZCL6DLVmURY
And BTW for those not in the know, "I'm just saying" is the new JK... Gawsh, chillax!
Published: August 12, 2009 9:01 PM
Leo
Will Professor Salerno post part 2 in the near future?
Published: August 17, 2009 9:23 AM
Gene Callahan
Kirzner's "intellectual terrorist" remark was dead-on.
Published: August 20, 2009 8:54 AM
David Gordon
The remarks by Joe Salerno which Professor Kirzner criticized seem to me well within the bounds of scholarly exchange. I doubt that Kirzner would have used the same language about much sharper remarks by Mises.
Published: August 20, 2009 2:53 PM
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Published: August 23, 2009 12:48 AM