Rush to Philosophic Judgment?

In recent debates on this blog several commentators have made reference to the dead-end of the hermeneutic turn in the Austrian school from the 1980s.  But truth is not determined by raising hands.  It is not a function of popularity.

Don Lavoie was a brilliant and deeply committed scholar.  He didn't just randomly pick Gadamer as a philosophic figure to study.  He understood Mises better than all but two other Austrian economists (Israel Kirzner and Richard Ebeling).  Lavoie sought to explore the philosophical foundations of Mises's system and so he was led to the continential philosophy of Mises's youth. The neo-Kantians and early phenomenologists.  He read Mises's student Alfred Schutz and followed up with Husserl.  Trace out from Husserl and the development of phenomenology and you get to Gadamer.  That takes care of Mises, but Lavoie was also deeply read in Hayek and he took that philosophical journey as well --- through Popper, through Polanyi, and into evolutionary rationalism.

All of this philosophic study, Lavoie wanted to marshall to offer a radical challenge to the dominant formalist and positivist paradigm in economics.  Unfortunately, an untimely death prevented this brilliant and caring scholar/teacher from completing his philosophical journey.

But to claim that Don failed is in my opinion a "rush to judgment" that must be resisted at every step.  His journey was not started out of ignorance of a tradition, but because he knew it better than his critics.  It was not started out of laziness with respect to doing economics, but out of a profound sense that unless the philosophic battle was won Austrians couldn't get a fair hearing.  And, he was not defeated by superior intellectual arguments, but instead by the realities of academic administration which consumed his time in the 1990s, and ultimately by cancer that kept him from finishing his philosophical journey.  Lets not just assume because of the sad reality that Don is no longer with us, that those still standing defeated him on scholarly grounds.  I am not saying that Don's philosophical program was perfect, nor that modification (perhaps fundamental modifications) to it would be required to make it be workable in the social sciences.  But to call it a dead-end is wrong.

Don understood that Mises's revolutionary idea was to establish economics as a philosophic science --- a science of human action that respected meaning and intentionality.  And in order to achieve that revolution the phenomenological philosophic turn must be made.  But this philosophic turn doesn't treat the existing state of the doctrine as fixed and complete.  It is an on-going enterprise --- Husserl to Schutz to Gadamer to Taylor to Ricouer, etc.  And since the application happens to be in realm of economics (which is decidely an underdeveloped branch of interpretative social science due to the stronghold that formailism and positivism has had over the discipline), this philosophic conversation has to be joined with an economic one to forge a modern synthesis.  In many ways, Alfred Schutz is the last statement which we have to work from before Lavoie's incomplete writings.  So we have to build from the fragments that Don left us because he never did get to write the book he spent a decade contemplating after his brilliant contributions to economics, the Austrian school of economics, and classical liberal political economy Rivalry and Central Planning and National Economic Planning: What is Left? (both published in 1985).  But that task is best left to philosophically sophisticated economists and social scientists, and philosophers of science who understand the task of the human sciences (as opposed to the philosophy of the natural sciences). 

Lavoie, as Mises taught, took seriously methodological dualism --- as should we.   But that has implications for the way we do our economics, and the way we defend what we do.  Mises understood that, and Lavoie was simply trying advance the Misesian agenda as best as he saw fit given the philosohical developments that took place since Mises came to his methodological position in the 1920s and 1930s.  Lavoie's was not a hermeneutical turn, but a Misesian turn that looked to developments in modern phenomenological hermeneutics to provide philosophical justification for methodological dualism, subjectivism, and process theory.

A very solid treatment of the philosophical issues can be found in a recent paper by Gabriel Zanotti in the Journal of Markets & Morality, published by the Acton Institute. Download zanotti1.pdf

Comments

[Steven Horwitz]

Thanks for this Pete. In my comment on the earlier thread, I wondered whether the costs were worth the benefits of Don's vision. I wasn't clear about the context though: it's still not clear to me that doing that work *as graduate students* was a smart decision. Don's intellectual vision is still one I largely share, but I think it's one that has to be pursued after one is "out there," having become really comfortable with the discipline first.

Don had the luxury of being tenured in a department that so prized intellectual diversity, in the words of someone who shall remain nameless, you could really "go out on a limb and hang yourself." The vision Don had, though as Pete argues it was certainly in the tradition of Austrian economics, was one that seemed strange to many, with its invocation of contemporary Continental philosophies with strange names (as if "praxeology" was part of every day conversation - even the Typepad spell check doesn't recognize it). To invest energy in that project as graduate students may not have been the wisest choice, although we seem none the worse for wear.

All of that said, Don's larger vision remains very much a guiding light in my own work.

[Brian Pitt]

Dr. Horowitz: Your comment regarding one's (in)ability to be "intellectually diverse" is a great encapsulation of why I did NOT pursue graduate study in economics (of course only taking mathematics courses through to the level of introductory calculus helped too!)

Dr. Boettke: Am I anywhere near the mark by claiming that in its strongest forms, Verstehen entails reliving the experience of the actor or at least rethinking the actor's thoughts, while in its weaker forms, it only involves reconstructing the actor's rationale for acting?

This is what I receive from a close reading of Max Weber, L.V. Mises, E. Husserl, A. Shutz, F. Hayek, J. Habermas, W. Dilthey, C. Geertz, and even yourself. And yes, I understand (or am at least aware) that "...social life encompasses a vast array of complex structures and cultural dynamics, which successfully enable us to plan our actions... (Boettke, 1990: 41)" Hence, wouldn't the empirical work of a C. Geertz and Derrida get us closer to understanding these cultural dynamics than Gadamer?

[Rafe Champion]

There is a problem at the start of Don's book on the calculation debate (this is a 20 year old memory) where he addressed some of the ideas of Popper and Kuhn. He seemed to be very wide of the mark at that point and this placed a big question mark in my mind, as did his debate with (Steele?) in Critical Review. Some of my thoughts on these matters (not directly related to Don) can be found in a comment on the level playing fields. http://austrianeconomists.typepad.com/weblog/2007/10/competition-and.html#comment-85113090

[Peter Boettke]

Brian,

Lachmann's argument was that the first task of praxeology was to render social phenomena intelligible in terms of purposive human action, and the second task was to trace out the unintended consequences of those human choices. I think that is what drove Lavoie as well.

As for Geertz --- one has to understand that Lavoie did not just fix on Gadamer, but instead had us reading Geertz ("The Natives Point of View"), Ricouer ("On Narrative"), Taylor, etc. Lavoie was just persuaded that Gadamer's Truth and Method laid out the philosophical issues at stake better than alternatives. I, on the other hand, while persuaded by Lavoie about Gadamer's relevance, learned more from reading synthesis works like Bernstein's two books --- Beyond Objectivism and Realtivism, and Restructuring Social and Political Theory.

So my Lavoie inspired turn led me to read sociologists like Peter Berger, and then also the economic sociologists like Swedberg, and to think about ethnography and political economy. I think Swedberg's Max Weber and the Idea of Economic Sociology combines the main insights for the questions I am interested in at this stage of my career.

So in the end, I learn more from social scientists than I do from pure philosophers --- so Geertz rather than Derrida.

But now for a twist on all of that, the social scientist who really excited me after I left Lavoie immediate influence was Jon Elster and his work on "A Plea for Mechanism" was very influential on me in terms of what we had to accomplish even as we made the interpretative turn. So it is that intellectual/philosophical discourse that is what I have been trying to engage in and encourage my students to engage (thus witness Leeson's emphasis on mechanisms in his work).

Someday I plan to write the book, Economics as a Philosophic Science, which will lay out the position clearly --- but in the meantime I am still trying to figure it all out through application and "testing" of it through application.

Pete

[Brian Pitt]

Rafe: Are/Were you stating that Lavoie (1985) was off the mark in paraphrasing Popper (1972) that the interpretation of facts are theory-laden; hence, they must be placed into a conceptual framework to be rendered meaningful? If so, Why?

Dr. Boettke: I too enjoy the work of Swedberg (sans his call for rational choice theory unifying theory and empirical research in sociology!). And I particularly enjoyed reading the work that you referenced. But what is most interesting about the Swedberg(s), Lavoie(s), Schumpeter(s), and yourself is that you all believe(d) that one should always strive to establish a symbiotic relationship between theory and empirical research, where each contributes to the development of the other.

[Joe Salerno]

So, according to Pete, Don Lavoie and Richard Ebeling--both of whose publications indeed show an excellent grasp of Mises's thought--have a better "understanding" of Mises than Rothbard or Hayek or even Guido Huelsmann, who is trained in philosophy and spent the last 5 or 6 years of his life writng a 1,000 page intellectual biography of Mises. Couldn't a case at least be made that the latter were equal or superior in their grasp of Mises's thought to Don or Richard? And what are Pete's criteria and evidence for making such a sweeping statement? Moreover what special competence or private source of knowledge does Pete himself possess in distinguishing between and ranking scholars on such a complex matter as their cognition of another scholar's mind and work? How much thought and study has Pete devoted to this issue? Without cogent and convincing answers to these questions, I am afraid Pete is once again engaging in ill-considered and unscholarly pontification a la his characterization of Austrian economics in the Doherty book.

[Ludwig van den Hauwe]

As far as I know none of the guys you mention has had any formal philosophical training. The one outstanding contemporary philosopher who got it right on Mises is Barry Smith. Mises´s methodological self-awareness is confused. He refers to Husserl but also to Hilbert. There seems to be some "mathematics envy" in Mises. He says "We can develop praxeology as a purely deductive science like logic and mathematics" but he offers nothing of the sort. One could claim that for this reason alone Human Action is a failure. Now if you look at what he actually did, it is more like Husserl than Hilbert so yes Peter Boettke has a point.

[Rafe Champion]

Thanks Brian, as I wrote, it was a memory from scanning Don's book 20 years ago. Along with "Human Action" it was payment in lieu of cash for an essay in an early edition of "Critical Review" with articles on lit and culture theory. My problem with Don was not the theory-laden nature of facts, which is not controversial, but the consequences that are supposed to follow and it was my view at the time that Don had taken a seriously wrong turn. In fact I felt that so strongly that I put the book aside (to read "Human Action") and did not get to find out what he had to say about the calculation debate.

The piece in Critical Review introduced Bartley's ideas about rationality and the limits of criticism as a rejoinder to the deconstructionists.

Another piece on a related theme is more relevant to this discussion because it invokes the thoughts of Karl Buhler and Rene Wellek along with Popper's theory of objective knowledge as an alternative to the deconstructionist turn which overlaps with hermeneutics. It flags a theory of language devised by Buhler that places language in a biological and evolutionary context.

http://www.the-rathouse.com/popunchanged.html

For more on Buhler and Wellek http://www.the-rathouse.com/Revivalist_winter.html

This is a shorter version of the Critical Review article.

http://www.the-rathouse.com/bartdeconstruct.html

[Peter Boettke]

A few responses:

Ludwig --- I majored in economics and philosophy in undergraduate school and also studied philosophy (at least sat in some classes) in graduate school. But yes you are right that I am no philosopher, and you are right that Barry Smith is a very good philosopher.

Brian --- I hold the strict Misesian line that theories are never defeated by empirics, but instead that theories are proven to be applicable or inapplicable to given situations. We learn from engaging in that act of historical interpretation, but it does not prove theories to be right or wrong --- that is a matter of logic. So I apologize if in some writings I communicate the wrong message ... no doubt I am not as clear as I should be in some writings. Also I am mostly arguing what I consider to be a very poor interpretation of the great contributions of Ludwig von Mises that have been allowed to circulate.

Joe --- we really shouldn't be engaged in our own version of "fight club". As a scholar I am asked to make judgments, as are you. It is my considered judgment that you are challenging. You are entitled, though I am not sure you are justified in your characterization of my statements. You are the editor of the QJAE, I am the editor of the RAE, I have been teaching Mises and Austrian economics for close to 20 years at the PhD level, you have been studied Mises and the Austrian school for 30 years or more. I respect (though disagree) with your positions, you obviously neither respect nor agree with mine.

But you know all those journal articles and book chapters you complained about for being methodological, they were mostly about Mises and his position on methodology and method, including the essay on Mises for the Handbook of Economic Methodology (edited by John Davis, Wade Hands and Uskali Maki) and an even more recent essay "Was Mises Right?" published in the Review of Social Economy. These pieces were not self-published, they met the critical test of referees, etc. If they are so wildly off the mark, write up a comment straigthen me and the economics community out and increase the line on your CV. It is the way science progresses. BTW, I also just edited The Legacy of Ludwig von Mises, 2 volumes. But that is all just bean counting, but you did raise the issue and I just want to point out that while I may be wrong or right from your perspective it is not accurate for you to say that my opinion is unscholarly, though (like yours) it is a strongly held opinion. I am not offering just a mere opinion, but one based on close to 20 years of study of Mises and Misesian scholarship, and conversations with those who studied with Mises (of course mostly with Sennholz and Kirzner, but others as well including Lachmann and Rothbard and Bettina and Percy).

Do you deny what Mises wrote in Epistemological Problems, or in Theory and History? Or that Rothbard himself recognized the phenomenological aspects of Mises's thought, etc.? I mean you don't deny that he had paper in that Nathanson book do you? I know Murray said that the good parts of phenomenology were already in praxeology and that the modern phenomenological philosophers didn't have much to add, but still the historical point is clear.

On Huelsmann's biography of Mises, I am just reading it now (it arrived from Amazon 2 days ago). I have very high expectations for the work and look forward to reading it carefully. I think Huelsmann possessess a very good mind and he is seriously committed to the subject so I am excited to read it to see if he found anything new.

I will say this, however, I was disappointed that it was published by the Mises Institute and not a major university press --- Princeton, Harvard, Chicago, Michigan, Stanford, etc. I think this will ultimately limit the impact of the work unfairly. That is too bad. But I am hoping that the book is awesome and that it will have a huge impact on the profession of economists and intellectual historians. Robert Leonard's major work on Red Vienna (Cambridge) will be coming out and Mises is not as important a player in his story as I would like to see, so Huelsmann's book could be important if it accomplishes what I hope it does.

The motivation for writing what I wrote was that people were saying that Lavoie's agenda proved to be a dead-end and that it was some sort of deviation. I wanted to counter that --- Don was not a deviationist, but a Misesian, and Don's project did not end in a dead-end, it suffered the fate of many projects when it becomes identified with a person and that person passes. There were no doubt major problems with the way Don set up the project that need to be worked out, but Don has been so influential on a variety of research directions in modern Austrian economics --- from work on non-positivistic and non-formalistic social science, to the analysis of socialism and interventionism, to the examination of the mechanisms of anarcho-capitalism.

Don Lavoie's research and teaching should be remembered in our circle and that is all I was trying to defend against what I considered to be false claims.

[David J. Heinrich]

It seems difficult to believe that Levoie understood Mises better than Rothbard, who Mises personally commended.

But, on a more critical note, I think Rothbard had excellent criticism of hermenetics, which to my understanding seems like a philosophical justification for moral relativism. There was some consulting company that came to Simon to do a conference on leadership (I forget their name). But they were affiliated with Mike Jensen, and had hermenetical philosophical background. In any event, while they had some useful things to say, the philosophical underpinnings was BS. They talk about "stories", w/c of course implies things such as rapist and rape-victim, just "his story" and "her story". And all that stuff about meaning being unknowable.

PS: The company was Landmark Education Business Development.

[David J. Heinrich]

other bothersome things mentioned in that seminar include quotes such as, or something to this effect, "forget about if it's true or false, just think about if it's useful," or "it's useful". Of course stating something is useful is a true/false statement.

One of the papers I read for the seminar is available here:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=278955

[David J. Heinrich]

My prior comments aside, I do think there are some things of value in the paper I linked to for example; they just need a better philosophical foundation, and some refining. A complete purging of the relativistic hermenetical style of language would be a good, if superficial start, to at least get the right mindset...

I mean, err, consider the possibility of the throwiness of that story...

[Ludwig van den Hauwe]

Peter,
Yes, I think Rothbard was right in linking praxeology to phenomenology. His paper in the Nathanson book is right on target. Mises, on the other hand, was wrong in making certain claims on behalf of praxeology, which is one reason why Human Action did not really make it in the mainstream. If praxeology is to be a deductive science like mathematics, then the true heirs of Mises are Debreu , Arrow...

[Peter Boettke]

David,

I don't want to defend hermeneutics, but make a point of clarification. Lavoie was defending "phenomenological hermeneutics" --- it was Gadamer's unique blend of Husserl and Heidegger. Lavoie was not a relativist and neither is philosophical hermeneutics. See Richard Bernstein's Beyond Objectivism and Relativism for at least a presentation of the position you want to attack.

Also on Mises's endorsement, yes Rothbard was a valued student of Mises, as was Sennholz, as was Kirzner. Have you ever asked yourself why Kirzner was the one who got the job at NYU even though he graduated from NYU?

Kirzner was Mises's direct PhD student and he was a very close associate. As Israel has said about his own work, everything he has done was in the attempt to elaborate Mises's system. And Mises recognized Kirzner in this regard. So the question of heir to a system is very much a contested issue. I'd say you have 3 major competitors to that system: Hayek, Rothbard, Kirzner --- and I think it is a huge mistake to believe there is only 1 path.

Talking about interpretation and subjective meaning and intersubjectivity does not commit one to relativism, but it does commit one to methodological dualism and the Austrian school agenda in economics I would argue.

Ludwig ---

It depends on what you want out of the deductive system and whether you are worried about a theory of human action, or a theory of automa. Mises argued that we had to worry about the starting point, and it couldn't just be a set of arbitrary axioms. He is clear about this in Human Action, and it is where he ties to phenomenology ---- reflections on the essence of human action. Arrow and Debreu represents a deductive system, but not one concerning human action. At least that is how I would start this conversation.

See my paper "Man as a Machine" -- as an attempt to get at this. Another paper which is interesting along these lines is Mittimier's "Mechanomorphism" in the feitshrift Kirzner edited in honor of Lachmann.

Pete

[Virgil Storr]

As someone who's carefully read both sides of the hermeneutics debate, I'm struck by several things.

First, the two sides consistently talked past each other.

Lavoie's 1985 essay on "The Interpretive Dimension of Economics," the one that Rothbard criticized so forcefully in the RAE, was largely an attack on formalism and positivism in mainstream economics and a celebration of praxeology for being a science that was principally concerned with "grasping the meaning of action." There are dozens (hundreds?) of quotes from Mises that say just about the same thing. It was also an attempt to defend Austrian economics from an attack that was being aimed at economics in general from without; by then, the so called interpretive turns was well underway in all the other social sciences and certainly in the humanities. It was an attempt to say the critiques of economics from without that we aren't like our brethren in the mainstream in important ways and that we share some of your frustrations with them.

Additionally, Lavoie claimed that Gadamer was a useful club for us Austrians to use against our brethren in the mainstream, especially on the grounds of should we be concerned with prediction or understanding. I happen to agree with Lavoie that Gadamer's work on understanding largely jives with Mises' discussions of meaning, say, in _Epistemological Problems_. But that's neither here nor there.

This last claim about Gadamer and Mises' views on understanding being largely consistent was arguably the claim that got him into hot water. Victory against the mainstream if it meant embracing the nihilism of hermeneutics was a victory that wasn't worth having. For his efforts, Lavoie was described as a "renegade Austrian" and "an ex-Misesian" who was so afraid of mathematics that he would accept anyone as a friend who said that math was their enemy. Although I disagree with the notion that Gadamer was a nihilist, he actually criticized nihilism and nihilists quite strongly, I agree that if Lavoie had embraced nihilism he would have deserved to be criticized and that Gadamer is all too easily confused with true nihilists like Deridda.

But there it was, one side thinking they had found a powerful ally in the fight against positivism and formalism and the other side thinking that anyone who embraced hermeneutics was embracing nihilism. Arguably, neither side was willing to accept the other was anything but confused.

The second striking thing about the debate is that the hermeneutical economists never really responded to the charges leveled against them.

I think there are several possible reasons why. First, the historical connection between the Austrian school and hermeneutics seemed clear (Pete's point above). It didn't seem the subject of debate. Second, Gadamer was no nihilist (see above). Third, they must have thought their Austrian credentials, as it were, were in tack. Don, after all, was a South Royalton Austrian. Forth, the hermeneutical Austrians held their attackers in really high regard, disagreeing on their assessment of hermeneutics but agreeing with much of their economics. Fifth, the attacks were often quite vitriol and its difficult to respond to vitriol attacks (saying "i'm not an ex-Misesian" is kind of like saying "i'm not a crook").

Whatever the reason, rather than defending themselves point by point they opted to push ahead; exploring, for example, how Gadamer might help clarify the way prices work (i.e. signals that need to be interpreted) and trying to extend and clarify their positions.

This, in my opinion, was a mistake. If for no other reason because it makes it easy to characterize the hermeneutical Austrians as deviants who were resisted and roundly defeated.

The third striking thing about the debate or at least the way its described is that it imputes motives to the hermeneutical Austrians that are just off base. Let me ask it this way, What do people think winning the debate would have looked like for Lavoie? Some seem to assume that he would have wanted to replace _Human Action_ with _Theory and Method_. This couldn't be further from the truth. In the 90s, long after the debate, Lavoie was assigning and recommending _Human Action_ to students he taught in the Cultural Studies and Public Policy Ph.D. programs at GMU. His hopes were nothing like than throwing out _Human Action_ (a book that he loved) and I'd argue that, if judged on terms he would have accepted, time has actually proven him right. It seems clear from reading those articles and his subsequent work on culture was that what he wanted was to find the strongest philosophical support possible for doing "applied work" in economics that looked more like economic anthropology or old school history than it did like econometrics. Perhaps, the reply might be Mises' epistemological arguments were enough and that we've always had a tradition of doing that kind of applied work in Austrian economics. But, it's also clear that Lavoie's embrace of hermeneutics was at least part of the reason that his students (and their students including those who are critical of the interpretive turn) have been so committed to doing "applied work" that tries to grasp the particular meanings that particular people or groups of people attached to their actions.

[Virgil Storr]

Of course, I meant Gadamer's _Truth and Method_ above(not _Theory and Method_). And, I apologize for the other smaller typos.

[Ludwig van den Hauwe]

Peter,
You say it depends upon what I want out of a deductive system. Anyway praxeology does not have the structure of a deductive system. I guess with all your philosophy background you will grant that point. Still there may be some system, but it´s a description of (possible) systems that exist in the real world, not a formal deductive system. Moreover I think you are nowhere without some kind of model and I have serious doubts about the possibility of constructing a model by mere reflection from your armchair about the implications of the notion of human action. You must get beyond mere "meaning analysis".
In Mises the model of the economy remains rather implicit; it´s already more explicit in Hayek and Garrison. If geometry, algebra, other mathematical tools etc. can help make the model more explicit I do not see where the problem is.

[David J. Heinrich]

Prof. Klein,

I didn't mean to say Rothbard was the only heir (excluding Hayek, Kirzner, Sennholtz), just that I didn't see how understood Mises better than (for example) Rothbard.

I've found the book you referred to on the UOR's library webpage, but before I go there, are there any papers online you'd recommend? (preferrably ones that don't suffer from the incomprehensibility Rothbard ridiculed in Heidegger and Gadamer.

[Jeffrey Friedman]

As the editor of Critical Review, which was a primary outlet for Lavoie and the "Lavoie boys" (including Pete) during their hermeneutical phase, I have one thing to offer.

I've been re-reading those early issues of Critical Review from 1987+, because coincident with our 20th anniversary, Routledge will now be publishing CR, and I wanted to write an intro to the first Routledge issue that explains the journal's trajectory over that period.

Looked at from the perspective of a common thread that started with Hayek and led to Critical Review's current focus on the electorate's and the elites' ignorance of economics, the connection to hermeneutics seems clear: the social and economic problems that social democracies try to solve are subject to conflicting *causal interpretations,* and the complexity of the society and economy that throws forth these problems guarantees that the conflicting interpretations about their causes will not be easy for anyone--even an econ Ph.D.!--to resolve. Hence the likelihood that social democracies will produce bad public policies.

In the previous issue of CR, I had a little debate with Kirzner where I tried to extend the interpretivist line that I've been applying to politics back to Austrian economics itself. Kirzner seems to resist the idea that entrepreneurs have to interpret profit opportunities and that, just like political entrepreneurs and voters, economic entrepreneurs can be *wrong* in their interepretations. (That's why they so often lose money, I would think.) Austrian entrepreneurial theory, it seems to me, can't blithely rely on entrepreneurial "alertness" to profit opportunities, as if the latter simply announce themselves to the world with no need to be interpreted.

Critical Review openly applies Austrian insights to politics, but in telling political scientists that if they want to understand the source of manifold political errors (and misunderstandings), they need to take an "interpretive turn," I wonder if I'm not just seizing on the word "interpretation" and inappropriately linking it to Austrianism via the old hermeneutical turn of Lavoie & Co.

Since I, too, found the relativistic implications of hermeneutics alienating, I have not read in that tradition beyond what I published in CR (except Taylor and the other communitarians, about whom I wrote my dissertation, and who are, as philosophers, charlatans--precisely because of their inability to dodge relativism). So any reactions from the hermeneutically inclined would be appreciated. If you want to do so privately, email critical.rev@gmail.com

Jeff

[Ludwig van den Hauwe]

Peter,
I still add that I am reading Debreu for the moment and it´s not about machines or robots. It´s about what Hayek calls the Pure Logic of Choice. It´s not quite correct either to say that the axioms are "arbitrary"; "conventional" would be better perhaps. It´s not true that Mises was against the use of equilibrium constructs; in fact, what you find in Mises instead is a vigorous plea exactly in favour of the use of such constructs...
Now suppose that Debreu had arrived at the conclusion that however "arbitrary" the axioms you choose, it is never possible to prove the existence of a competitive equilibrium. I guess that conclusion would have interested even you...

[Peter G. Klein]

Pete:

I'm puzzled. You frequently exhort Austrian economists, on this blog and elsewhere, to do more and better applied work and to avoid "meta-economics." Yet here you are, endorsing Lavoie's excursion into Continental philosophy with nary a qualifier. "Don understood that Mises's revolutionary idea was to establish economics as a philosophic science --- a science of human action that respected meaning and intentionality. And in order to achieve that revolution the phenomenological philosophic turn must be made."

Well, could you give one or two specific examples of applied work in industrial organization, economic development, monetary economics, finance, labor, or any other field that benefits from making the "interpretive turn"? The lesson from Lavoie's project can't simply be "do more case studies," because there are scores of ethnographers, sociologists, anthropologists, historians, and even economists who do excellent field work without having read Gadamer or Husserl. In short, why should the applied economist care about any of this?

[matthew mueller]

Peter Klein,

Mises also recognized that the academy generally does not favor innovation and daring. The purpose of the academy has always been to rear disciples who hopefully develop into obedient imitators and routinists. But the true scholar is one who defies these standards and rules. And in the context of economics, I believe it is one who is not afraid to make "the interpretive turn."

Is there "excellent field work" being done in applied economics? I would disagree. To the extent that they regard the philosophical implications of their work and findings to be unimportant and not entirely relevant, than perhaps there is some plausibility in your argument. But this does little to support your case. Insisting on ignorance as a way of defending your view of economics only begs the question. We realize that all economics begins with methodology. So there must be some reason that the people working in finance, labor, and industrial organization insist on keeping philosophical discourse out of the workplace. What could be the reason?

I think the current practice of applied economics would collapse if they read people like W.V.O. Quine, Roy Bhaskar, W. W. Bartley, Nancy Cartwright, Uskali Maki, etc. etc. Admittedly, their efforts largely have been directed at the philosophy of science, but it is not difficult to take the leap into economics. In fact, most economic professors of economic methodology are well-read in this literature, and for good reason.

In short, I think it is a poor argument to suggest that just because people working in the field of economics today are ignorant of the developments taking place in the philosophy of science and hermeneutics must mean that these things have nothing important to teach us or contribute to economic science.
I would approach the argument a different way. Assuming that some economists are familiar with this literature, why is it that they persist in remaining silent over the possible connections it has with economics. Or what would happen if we began introducing these subjects into the economics classroom?

[Peter G. Klein]

Matthew:

I didn't say that applied economists are in fact better off not knowing any philosophy. I simply asked for examples of applied economics research that builds specifically on the literature and concepts cited by Pete. Can you provide names or references?

[David Gordon]

As the title of his principal work, Truth and Method, suggests, Gadamer wished to contrast science, which proceeds methodically, with non-methodical truth. It is difficult to see how this view can provide the basis for praxeology, which Mises took to be the science of human action. The unfolding of the concept of action that Mises carries out is not at all like Gadamer's textual hermeneutics. I'm not familiar with any evidence that Mises read Gadamer. He had a low opinion of Heidegger, Gadamer's teacher and the main influence on him.

For Husserl's influence on Mises, the case is better, but not I think decisive. Mises read Husserl and in Human Action cited a famous paper by him on temporal consciousness, but he also read many other philosophers whom he cited when he thought their views supported his. Mises cited Meyerson and Cassirer, but this hardly makes him a disciple of either. Husserl took meaning and intentionality seriously, but he is hardly the only philosopher to do so.

[Lawrence H. White]

I was the first person to mention Don Lavoie in the comments to Pete's earlier post, so I guess Pete’s criticism of a “rush to judgment” is at least partly meant for me. So nobody has to seek it out, here’s what I wrote:

"Here’s an alternative hypothesis. The hermeneutic diversion (led by Don Lavoie) turned out to be a waste of time. (I voiced my concern that it would while it was going on. Pete used to refer my concern as “the White critique”: for graduate students in economics the opportunity cost of studying Gadamer exceeds the benefits.) That it failed to produce useful output gave Boettke (and the Kochs) good reason to decide to change course."

By the way, this was meant as a defense of Pete’s apparent change in outlook. To compound the irony, it was an attempted application of verstehen.

Pete now defends Lavoie’s hermeneutic turn thusly: “It was not started out of laziness with respect to doing economics, but out of a profound sense that unless the philosophic battle was won Austrians couldn't get a fair hearing.”

I didn’t suggest that Lavoie or his students were lazy. (Nor that he picked Gadamer at random.) My claim was rather that their efforts in hermeneutics produced less valuable output than they could have in alternative employment (hence “waste”). How do I propose to measure value of output? Exactly as Pete would have us measure it: by “bean-counting” journal and book publications, and impact on the economics profession.

To be clear, I am not saying that nobody should ever study hermeneutics. My advice applies at the margin: an Austrian graduate student who -- once he has read what Austrian economists have written on methodology -- is choosing between work in economics and work in meta-economics is best advised to focus on the former.

The hypothesis Pete attributes to Lavoie, that “unless the philosophic battle was won Austrians couldn’t get a fair hearing,” is basically false, in my view. The key to “getting a fair hearing” from mainstream economists is – as I thought Pete would agree, in light of the advice he has given as noted by Peter Klein – not to stress meta-economics or philosophy but to provide better explanatory conjectures (and refutations) for phenomena that interest economists (or to interest them in phenomena for which one has better explanations). I don’t see any evidence to support the view that the best way to advance Austrian economics is to have more grad students try to “win” the “philosophic battle” in the sense of trying to convince established economists to drop their methodological commitments. It is not helpful advice.

I counted Don Lavoie as a friend. (Trivia: He left NYU just as I was arriving, and he kindly helped me find an apartment. In fact, I moved into the apartment he was vacating.) I too admire and recommend his first two books. There is no personal disrespect intended in any of the above.