The Austrian Economists

Pirate An-arrgh-chy: Part I in a Series of III

Ahoy! I am writing a series of papers on the law and economics of pirate organization. (Yes, I'm serious).

The first in this series is titled, "An-arrgh-chy: The Law and Economics of Pirate Organization." You can download it here.

Be on the lookout for number two in this series sometime this fall, ye scurvy dogg.

Addendum: The first paper is still a work in progress. The second paper will provide a rational choice-look at 'famous' pirate practices. The third paper will provide a map allowing the reader to locate sunken treasure.

New Paper on Media and Policy Ownership

Peter Leeson and I have a new paper forthcoming in the European Journal of Law and Economics entitled, "The Reformer's Dilemma: Media, Policy Ownership and Reform."  The paper can be downloaded here.  Here is the abstract:

Current proposals for strengthening policy ownership in reforming economies are fundamentally flawed. Modeling the reform process as a prisoners’ dilemma demonstrates that political agents must overcome this conflict of interests before present proposals for bolstering ownership will work. A politically autonomous mass media is one important mechanism enabling political agents to do this. Reforming countries without free media face an uphill battle overcoming the problems associated with transition. We test our theory by investigating the relationship between media freedom, foreign aid, and economic development in 26 post-socialist transition countries. The results of this analysis support our theory.

This paper is part of a larger project on the role of media in social and institutional change.  Pete and I are currently co-authoring a book on the topic entitled, Media, Development and Institutional Change.

Moral Philosophers in an Age of Scientism

I think a great book in the modern intellectual history of economics and political economy could focus on Kenneth Boulding, Albert Hirschman and Tibor Scitovsky.  F. A. Hayek and James Buchanan could be used to frame the discussion, but the intellectual biographic case studies of Boulding, Hirschman and Scitovsky would put a fine point on the fate of political economy conceived of as a branch of moral philosophy during the post WWII era.

I studied with Boulding at GMU in late 1980s, and I corresponded with Hirschman and visited him at the Institute for Advanced Study in Princeton in the early 1990s, though I never met Scitovsky.

The Social Science Research Council has now established the Albert O. Hirschman Award for Interdisciplinary work in the Social Sciences.  The winner for 2007 is Dani Rodrik. Rodrik is a very worthy winner of this award --- a very creative and provocative thinker.  And now a blogger as well.

Thanks to Tyler for the pointer.

Mises Institute Strikes Gold

As readers of this blog experienced in the recent past, there are differences between the approach to teaching, research and the promotion of Austrian economics in the contemporary academic world and public mind between those associated closely with the Mises Institute and those not as closely tied to the Mises Institute.  A lot of this discussion is counter-productive I would argue, but some of it goes to the very core of our enterprise.  But that is not what I want to talk about today.  I obviously have my disagreements with certain positions associated with the Mises Institute and they are on the public record.  But today I want to stress why I spend my time trying to fight this battle within the Austrian ranks.  In order to do that I have to explain why I think the Mises Institute is so vitally important to the Austrian/libertarian movement.

First, let me make a non-economic point, but instead a libertarian point.  After 9/11, the Mises Institute was the only libertarian organization that held steadfast to the anti-war stance.  For that, they earned a certain respect in my mind which would be very hard to erode. Libertarianism is an anti-war, pro non-intervention political philosophy.  Why some have attempted to torture the tradition to come with arguments that are pro-war I don't know.  Just admit that you find the libertarian principle too difficult to adhere to in the modern world and move on.  Or, stick to your intellectual roots and do not justify military intervention as a solution to the problems we face in the world today.  Second, an intellectual history point instead of an anlytical economic  point.  The Mises Institute understands and promotes an aggressive appreciation of the works of Ludwig von Mises and Murray Rothbard.  For that, again they deserve a tremendous amount of recognition for their good judgment.  Mises is, in my opinion, the greatest economist of the 20th century, and Rothbard is the most inspiring (though I really like Hayek too!).  Third, the Mises Institute has been amazingly entrepreneurial in making material (lectures, articles and old books) available to young students throughout the world.  Liberty Fund and the Mises Institute make the literature of liberty readily available to a new generation and they continually do so every day.  Just today, I was altered to the existence of The Economics of Inflation by Costantino Bresciani-Turroni (with a foreward by Lionel Robbins) on the Mises Institute website.  This is a very good book on the inflation in Germany and the consequences of inflation on the social order.  It is also a very good "teacher" of how to do empirical applied political economy.

Not only Mises's writings, but those of several major and lesser known figures in the Austrian and libertarian movement are kept "alive" electronically by the Mises Institute (and credit must go to Jeff Tucker here).  What a great resource for students of economics!  I may disagree with this or that reading offered, or this or that interpretation of the work of others that is promoted by particular scholars associated with the Mises Institute, but one cannot deny the great service done for Austrian economics, political economy, and truth by making all these works available to subsequent generations of students and scholars world-wide.

The reason I choose to fight what might appear as senseless battles over labels and approaches is because the Mises Institute is a major force for good in the world of ideas and policy affairs.  I share that commitment to both a consistent and uncompromising libertarianism, and to the advancement of the teachings of the Austrian School of Economics.  The goals are shared in common between what I am trying to do here at GMU and what the Mises Institute is doing, the means suggested for the most effective way to achieve those ends is where we differ.  If our goals differed, I would never bother to fight battles over labels, etc.

But our goals don't differ, and the job they are doing in making material available to students and scholars is amazing and vital to our common cause.  So I acknowledge the great work that they do, and I respectfully ask my friend Joe Salerno to just have patience with me (and my former students) as we pursue common goals with different means (at least on the academic front).  You can correct us for errors you think we are making, but don't deny that our goals are aligned --- consistent and persistent libertarianism, and the advancement of the core ideas within the Austrian tradition of economic scholarship.

Enterprise Africa! in New York and Washington DC

My colleague Karol Boudreaux and her team are presenting the fruit of their research tomorrow in New York (see here). They will also be in Washington DC the rest of the week. Karol has done important research in various parts of Africa over the past two years showing how the enterprising spirit is alive among Africans and in what way it can contribute to development and the reduction of poverty.

The event in New York is jointly organized by The Mercatus Center at George Mason University, by Africa House at New York University, and by the Stern business school at NYU. William Easterly will be speaking tomorrow in New York and Pete Boettke will also address some issues in the field of development. The event tomorrow has more than 250 people registered, including many economists from NYU, and people from various international agencies.

The work of Karol and her team is very important as it shows that not only small pockets of entrepreneurship can exist in terrible conditions (something social scientists have known for a long time), but also that entrepreneurship, under small improvements in the institutional environment, can be more systemic—i.e., occur on a wide basis touching the lives of many. Indeed, in my view, one of the keys to understanding development is to explain the mechanisms by which entrepreneurship moves from local to systemic. It is a very difficult problem, and Karol’s work has moved us a little bit further towards a solution.

Another Look at Hurricane Katrina…

Peter Boettke is the director of a five-year research project at Mercatus and GMU on “crisis and response in the wake of hurricane Katrina” (see here). This study of post-disaster recovery will examine how different social, legal, political, and economic institutions engender different types of response, and how they may have affected different communities before, during, and after the hurricane. One of the first to notice the capacity of some societies to recover was John Stuart-Mill in his Principles. He noted that after a disaster, some countries often rapidly recovered. In such cases, population numbers and people’s human capital were essential (book I, chapter 5).

While economists try to examine responses to hurricane-related disasters, other scientists (literally) travel in the eyes of hurricanes to understand better how they form and how we can predict their path. As I was browsing for Katrina-related material on the Internet, I came across pictures of its eye taken from a plane. NOAA (which is part of the US Department of Commerce) sent a plane in the eye of Katrina. The pictures are very impressive...

LSE and cosmopolitan liberalism

I have yet to confirm this independently, but I was told today by a very reliable source that Chandran Kukathas will be assuming a chaired professorship at the Londson School of Economics.  In my opinion, Chandran is the most sophisticated voice for cosmopolitan liberalism in the field of political philosophy today.

Robert Nozick was the great libertarian political philosopher of my youth, but Chandran, David Schmidtz, and Loren Lomasky hold that title today.  Chandran's move to the LSE is a great accomplishment for him, and a great opportunity for the ideas he has devoted his life to advancing.

Congratulations to Chandran and the LSE.

Experimental Research on the Division of Labor

One of the major areas of research at GMU is work on generalized increasing returns.  James Buchanan has been exploring the returns to the work-ethic for over 20 years, and Vernon Smith has been examining Adam Smith's proposition on the division of labor and social cooperation for as long.  Vernon's colleague Bart Wilson presented their joint research on this today in the Workshop in Philosophy, Politics and Economics.  Bart is an absolutely first-rate presenter and this work reflects both a profound appreciation for the Smithian (Adam that is) insight into the division of labor, and the amazing creativity required to design experiments that attempt to capture and test those critical insights.

That makes 5 since 2000!

I forgot to mention Jonathan Klick in my list of GMU PhDs since 2000 who are teaching in PhD granting domestic institutions.  Jon received his PhD in 2001 and his JD in 2003, and he has an amazing publication record.  While he teaches in the school of law at Florida State, he also has an appointment in the economics department and serves on dissertations, etc.  Sorry I missed this one, and I apologize if I am missing any others.

In fact, if you are a GMU graduate from our economics program and teaching in a PhD granting institution, please alert me to your position, etc.  We need to get an accurate placement accounting for our website in the department.

Congratulations Dr. Smith!

Jen Smith is one of the most enthusiastic graduate students I have ever had the opportunity to teach.  She approached her studies with great joy and was constantly looking for new and interesting ideas from conventional and unconventional sources.  She certainly surprised me on more than one occassion with her source of ideas she wanted to explore.  But upon examination the unusual source of her course of study would often lead her to intriguing points and suggestive directions of research. 

Jen successfully defended her PhD thesis today (see picture on the left with Prof. Richard Wagner and Dr Frederic Sautet who were on her committee with me).  Her work addresses the contrast between tribal orders and the extended order of modern society.  In the process she tackles fundamental questions in anthropology through the lens of economics.  Jen also suggests ways in which the economic analysis of development can be improved through addressing questions of the minimum values and norms that underpin the social order of a modern market economy. Congratulations to Jen.

Jen has recently accepted a job as a research analyst at the Center for European Policy Analysis in Washington, DC.  This is a relatively new "think-tank" and Jen will be responsible for economic policy research.  Good luck to Jen and others at CEPA in their important work on studying the future of Central Europe and the EU.