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Wow. Smackdown. Game, set, and match, Boettke.

I don't really know why Fast Food Nation is considered a liberal book. The author takes a lot of time detailing the favors that the government granted certain industries and corporations – all the subsidies and polices that enabled the fast food industry to be what it is today. The author is also hard on regulators for not doing their job properly, but the overall tone of the book is more historical than preachy. I found it to mesh quite well with my libertarian ideals.

The left lost the intellectual argument decades ago. All they can do is fill their students' minds with emotional appeals and censorship of opposing views. This isn't really descriptive of just a few professors but every leftist professor that I've ever had. They don't want to discuss anything, and they sure as hell don't want to look at the facts and data objectively. As far as leftist professors go, facts, logic, and discussion will not sway them over. These aren't people trying to find truth in the world. They are outright dogmatic propagandists trying to mold their sick world view into their students.


I am certainly persuaded to agree with you about the dogmatic character of many views held and espoused by leftist liberals. They have a neat little ideology, and anything (logic or experiential evidence) that contradicts it is summarily rejected. This, as you correctly note, is not conducive to scientific advancement because competing views and ideologies are not welcomed or considered in great detail.

But the argument extends further to include libertarians, who I consider to be some of the most dogmatic ideologues around. You write that liberals are unwilling (and perhaps unable because of their ideology) to "look at the facts and data objectively." I hope you do not mean to suggest that libertarians can look at these things objectivity, because clearly they cannot. Their entire understanding of the world is based on the assumption that markets are coordinating in the absence of government intervention. This allows the libertarian to blame all disasters, coordination problems, and economic distortions on government intervention while attributing every sign of success to the invisible hand. Now the logic and evidence supporting this simple belief is mistaken for several reasons (in my view). Without going into great detail, I can refer you to some arguments I wrote in the comments section here:


In fact, try this. Go back and re-read your post and just substitute the word libertarian for liberal. Can you not picture someone saying the exact same thing about libertarians?

I think most libertarians (and Austrians) ignore the importance of institutions, ignorance, and the the motives of human action.

Now I am not saying Austrian economics (and what is has become -- libertarian anarcho-capitalism) is totally misguided and should be abandoned. Instead I think the most productive thing one can do is recognize the weaknesses in his chosen discipline and work hard to try to improve them. This is not going to happen by simply repeating things your libertarian professors have already said. I wasted two years doing this. And then I read books like Frank Knight's "The Ethics of Competition" and Thorstein Veblen's "The Theory of the Leisure Class."


Certainly there are ideologues among libertarians. However amongst free market supporters there are an endless amount of people who think some sort of intervention is necessary in various parts of the market. On the other side of the coin, when is the last time you heard a leftist say "market competition is a better way to provide education" for example. "Intervention" enters the vocabulary of free market economists all the time in respect to certain issues showing the evaluation of situations. "Market" does not even enter the conversation among leftists. The question of economics has always been should the government intervene and then prove "why or why not?" The non economist left academia instead asks "We already know capitalism is evil. What kind of intervention is the best intervention? Why or why not is your version of intervention the best?" Markets don't enter their conversation. Even ideologue libertarians must show logically why markets are preferable instead of treating it as a given.

Further, any libertarian who prescribes all successes to the market and ignores all failures does not understand what he's talking about. Most libertarians who actually know what they're talking about don't have such huge problems with things like Enron for example. It came it fell. That's what was supposed to happen. The process isn't always perfect. It is not a question of perfection ever but instead comparison to other alternatives. Which brings me back to the point that economics is always a comparison of opportunities and inherently must consider possibilities of both government and market. It cannot simply ignore and hold constant real alternatives

It is possible to be critical of the dogmatism of some non-left people and you can get classic examples if you cherry pick the literature. That is why the Ayn Rand movement can be seen as a speed bump on the road to serfdom. They will stand in the way of socialism but they cannot create a climate of debate where people who think differently can be persuaded to change their minds in a reasonable and considered way. That is the climate of debate that classical liberals have to promote and you can find it on this site for the most part. Austrian analysis is all about the comparative analysis of institutions and when you go broader than economics to praxeology you are looking at intellectual and religious traditions, folkways, the moral framework, all of the written and unwritten rules of the game of social, economic and political life.

As for the left, they have become a forest of dead trees, cut off at the intellectual base but still standing up due to weight of numbers and the linkage of their branches. And public funds.


I don't think nearly anyone in today's system has the incentives to really try to understand politics and economics. As you've mentioned before, educational institutions don't have strong incentives (in the short-term) to really search for the truth in the social sciences. I think this leads to ideologues on all sides. Short of a Policy Analyst Market, I don't know what to do about it.

In my mind, books like "The Theory of the Leisure Class" (which I admit to having only read the cliff notes of), don't really dent Mises' arguments. They show how people can act irrationally based on outdated genes or memes, but I think Mises' arguments went a bit beyond that. What I read in Human Action convinced me that potential profits from comparative advantage is the driving force behind advances in human memes. Or in other words, markets foster self-improvement as well as material improvement.

I recently published a review of Atlas Shugged in the Australian Financial Review to commemorate its 50 anniversary. It is a fine book, I wish more people would read it. But I have to disagree with Pete on this point. I have observed Atlas Shrugged being used as a teaching tool and Pete may well be the exception to the rule, but my impression is that it quickly becomes pure propaganda. (The academic concerned is also a GMU graduate - older vintage than Pete.)

It is not appropriate to prescribe novels* for teaching purposes - unless you're in the English Department (or Literature). Of course, there may be a market for teaching the underlying economics in literature as part of a specialised subject that looks at that issue.

* I gather Pete means 'novel' when he writes 'book'.

I believe Sinclair Davidson has an extremely valid point. Fictional novels are not appropriate as teaching materials. If Atlas Shrugged is appropriate, then a socialist could make a good case for The Jungle. Let's throw away the novels and pick up the real books. If we accept fiction as an appropriate teaching method, the socialists will always win considering that they specialize in fictional utopias.

Further, I find Atlas Shrugged a really roundabout way of teaching something pretty basic. It wastes lots of class time and study time. Its overall theme could be taught in ten pages instead of 900.

I am sorry, but I have been teaching a course using literature to teach economics for 20 years. And I have found the exercise extremely valuable as a teacher of economics. We don't read these books for their contributions to literature, but for their discussion of economic ideas. I'd love to teach Sinclair's The Jungle, or Bellamy's Looking Backward as well. Why not?

Sinclair, Pete, and Vedran,

Taking Dierdre McCloskey's point on the storytelling aspects of economic theory we should ask ---- what is the difference between Samuelson's textbook and The Jungle?

And Vedran seems mistaken when he demands that we throw away the novels and pick up "the real books." I only wish we could know what the real books are; that would certainly save me a lot of time in my reading. And what makes pure libertarianism any less "utopian" than Marx's communist state? The fact that you think the writers on libertarianism are correct in their analyses of economic theory?

And Sinclair, the only reason you think Atlas Shrugged has no place in economics classrooms is that it is often used for "pure propaganda." But couldn't the same be said of mainstream economics textbooks? In fact, the only reason you feel compelled to make this statement is because you are aware of the radical degree to which Atlas Shrugged deviates from the analytical content of mainstream textbooks. But suppose Atlas Shrugged suddenly became the standard to which all other works would be compared. Now Samuelson is the miscreant championing inappropriate propaganda!


The power of Veblen's writing consists, in my view, of his remarkable ability to question and analyze the nature of human motives and conduct. Mises, brilliant as he was, simply took this for granted. Read the first 100 pages of Human Action and you will find at least a dozen pleas for the need to take the ends of human action as given. This is a fatal error. Mises, along with most mainstream economic theorists, believes that the task of economic science is to arrange institutions in such a way as to best fulfill human wants. This seems simple enough. Humans have wants, and economics is concerned with the satisfaction of these wants. But then read Frank Knight's "The Ethics of Competition." Very briefly: It is inappropriate to take human wants as given, because they are always changing. Moreover, individuals never really aim at satisfying wants, but are concerned instead with discovering new wants. This is a remarkable insight that has not been sufficiently appreciated. And Knight quotes Veblen many times in his writings.

And finally Rafe,

I think you are absolutely correct in writing that "Austrian analysis is all about the comparative analysis of institutions." When taken on purely relative terms, a very powerful case could be made in favor of laissez faire capitalism. But, and this is going of Frank Knight again, individuals are never really concerned with the relative values of competing possibilities, but instead try to behave in a manner consistent with certain social ideals. This is the basic theme behind Knight's excellent essay "The Ethics of Competition." He writes that if we take economics as a science that is conerened with maximizing production, then laissez faire is the best alternative. But this is not how economics should be evaluated. If we compare the results of laissez faire capitalism to its social ideals, it fails miserably --- so Knight argues. And I think this is the approach many economists should adopt.

(My apologies for the lengthy post).

I think that Sinclair Davidson and Vedran's concept of teaching is flawed and somewhat scary. While I generally stay away from fiction in my personal reading, I find it distressing that people think that greater truths cannot be understood through fiction. I wouldn't support economics or any other discipline save English being taught fully by literature, but I think elements of it can be implemented successfully.

For example in an American Political Theory course I studied Henry Adams' Democracy: An American Novel, but by their logic this was a mistake. I couldn't disagree more.


Why not? Opportunity Cost. My copy of Atlas Shrugged is 1084 pages. Do you think a student could learn more about free market economics from Atlas Shrugged or from 1084 pages from Various non-fictional economics books on my shelf (including easy reads like Armchair Economist, Bastiat's the Law, Henry Hazlitt, etc.)


You're once again assuming that libertarians think everything would be perfect and wonderful in a libertarian society. This simply isn't true. You're attacking a strawman. As I understand a purely libertarian society, you would still have to bust your butt to put food on table and raise a family. There would be rich; there would be poor. There would be Enrons and scammers and all kinds of things. It's no utopia. At best pure libertarianism would make many peoples lives better but I don't believe anyone has suggested utopia of any sort.

Why isn't libertarianism utopia? Because no one has ever said that it would be. It's pretty simple. Don't just reverse words in a sentence and think you have a point.

Or Maybe I just think I breathe oxygen because I follow scientific analysis? But who knows perhaps I am horribly mistaken and will never possibly grasp reality hence I cannot make any clear statements about libertarianism. Extreme subjectivism is mental poison

Robert Porter,

I'm not saying that greater truths cannot be learned from fiction. I think you can learn from Atlas Shrugged. But fiction teaches both Greater Truths and Greater Untruths. These truths or untruths can never be resolved internally in a book. They must be evaluated with outside knowledge and information.

There is something problematic if a person becomes a socialist and then quotes what happened in The Jungle to explain the real world. From fictional books, you can understand general concepts but not what is actually occurring in the world around you. And this happens all the time!!! And that is what I think it problematic with teaching fiction. A fictional world internally consistent my not present the actual reality of business whether in Atlas Shrugged or the Jungle.

(One could argue that government intervention is not nearly as harmful as Atlas Shrugged would have you think. If your ideas of capitalism and intervention were based on that book, you would simply be wrong about many things. Would you understand the basic concept of capitalism? Yes. Would you have enough to carry an intelligent conversation on specifics or truly defend capitalism? no)


I did not mean to give the impression that I believe libertarians write as if their aim is to achieve perfection in markets. Educated libertarians, I acknowledge, are well aware of the complexity of the economic system and cling mightily to the persuasive theories of Misesian speculation in human action and Hayekian spontaneous order.

However, almost all libertarians will argue that a free market is the best possible alternative presently available to us --- in fact your status as a respectable libertarian rests fundamentally on the acceptance of this basic principle.

But let me repeat something I wrote in my earlier comment, and this gets back to Frank Knight. He wrote that:

"in regard to the larger and higher questions, the ultimate problems of moral and social life, the formulation of ideals is a necessary step."

He then goes on to describe the allocative and productive efficiency of capitalism "relative" to socialism and interventionism and concludes:

"such a position is entirely sound; but it is not a statement of a sound ethical social ideal [because] ... the conditions of life do not admit of an approximation to individualism of the sort necessarily assumed by the theory."

This is a fascinating argument. So even if libertarianism and capitalism succeed in making, as you put it, "many peoples lives better", that is still beside the point because the real question concerns the "ethical significance" of this theory if it is indeed true. I have never been so persuaded by an "absolutist" type argument before. Why has Frank Knight been so neglected?

And about "extreme subjectivism." I strongly disagree with your description of this term as "mental poison." Let me briefly explain why, but only briefly, just because subjectivism is so easy to attack but very difficult to defend only because those who feel disposed to attack it consider the very concept absurd.

Hamyln wrote a great book on the history of western philosophy, and a central theme in the book was the importance of scepticism for the advancement of philosophy generally. For example, he argues that the ancient Greek sceptics gave rise to what we now call "epistemology". Thus, without scepticism we would not have epistemology because people would simply take the existence of knowledge (and its precarious nature) for granted.

I would caution you against downplaying the importance of scepticism and "extreme subjectivism." Without the challenges of these concepts, our knowledge of the world would be in a very deplorable state today.

I should be clearer - I'm not suggesting teaching should be propaganda, I'm saying the instances where I saw Atlas Shrugged being used were propaganda. Of course, propagandising is not limited to Atlas. That particular academic turned classroom experience into propaganda - a real problem for the department.

Picking up on the oppourtunity cost aspect - I'm sure every economic lesson in Atlas can be found in Mises' Anti-capitalistic mentality at about 100 pages. The time saved can then be spent reading Buchanan's Cost and Choice also about 100 pages, and so on.

matthew, what if we take economics and praxeology as the sciences that study the way economic and social systems work? When we understand how they work we have a better chance of getting what we want out of them.

You may not learn a lot of good economics from popular fiction and movies but you can sure find out how a lot of bad ideas get spread around!


I understand what you mean when you say it was an error of Mises to take all ends as given. However, I'm not sure his goals when formulating his epistemology were the same as yours when you were reading it. As I understood Human Action, he was simply drawing a line around what his economic framework would try to explain. That is something all theories must do, since in essence they try to simplify reality.

You are of course correct when you state that treating ends as given misses the how people's wants are shaped by their environment, and vise-versa. I don't think this was lost on Mises. I was specifically mentioning passages later in Human Action, where Mises tries to show that gains from trade are the reasons these ends become more peaceful and egalitarian: Respect for others is essentially required to profit in a market economy. This isn't true of systems based on conquest. Or put in more modern terms, power produces perverse incentives, and incentives matter.

I'm not sure what you mean about capitalism maximizing production. It was my understanding that arguments for it proposed that it maximizes subject value, which may be production, or some social ideal, or whatever.

I don't think comparing the results of a proposed economic system to some 'ideal' or 'ethic' is valid in a general sense. No system of any sort exists for normative reasons. Normative reasons are arguments used to persuade people to do different sorts of things, and thats about it, in my opinion.

Re-reading Pete's post I see the magic name of Dickens. This is a good point of entry to the way that writers have so often misrepresented economic issues.

The genteel middle classes and especially the literarati came to share the views of the aristocracy and the radical critics of trade and industry. Charles Dickens is just one of a galaxy of writers, poets, cultural commentators and even historians who failed to understand the nature of the processes that were at work and misrepresented either explicitly or by implication the reasons for the comparatively tough living conditions of the factory workers and other urban dwellers. The qualification 'comparative' is important because the baseline for comparison was usually the situation of the well to do, or else a sentimental and unrealistic image of the lifestyle of rural villagers and farm workers.

The case of Charles Dickens is instructive because he has lent his name to the "Dickensian horrors" of the time and because he actually experienced some manual work, unlike most of the educated commentators. Like the case of the Tolpuddle Martyrs, it is instructive in a different sense than that intended by critics of the system. Dickens spent 6 months at the age of 12 in a small blacking (boot polish) factory, owned by a relative, where he earned six shillings a week, working with a team of boys pasting labels on tins. This was a tragic decline for Dickens who had been living in ease and comfort because his father (John) enjoyed an income of 350 pounds per annum in the Navy Pay Office. Dickens senior had ideas above his station, possibly because he grew up in contact with the grand house of Lord Crewe where his father was the head butler. John Dickens and his wife habitually lived beyond their means and they spent almost six months in Marshalsea debtors prison until a relative left a legacy that paid off the creditors. For some reason Charles was not immediately released from the job and he believed that his mother actually wanted him to stay on, presumably because he was supporting himself with his earnings. A system where a 12 year old child can do that is not all bad.

During those months Charles visited his parents daily but he lived in desperate uncertainty about his future. The experience was so traumatic that the theme of the abandoned child is a recurring motif in his books. The horror of the experience had nothing to do with the work itself which was light, safe, and indoors. It was the violent reaction of a highly imaginative child to the sense of being betrayed by his mother and father, and "cast down" from his proper station in life. This was entirely the fault of his parents and it had nothing to do with his own working conditions or the industrial system at large. When Charles left the factory he completed his secondary schooling with three years in a private college.

From an essay based on a piece by Arthur Koestler, another literary gent. http://www.the-rathouse.com/2007/BH_Appendix.html


Once again you assert that Austrians pay no attention to the ways in which people's ends are affected by social institutions. So I will repeat a challenge in a different thread that you never responded to. Let me know if you think the analyses below are adequate.

And would you find the following quote to be a good example of understanding that individual preferences are affected by existing institutions?

"Community of language is at first the consequence of an ethnic or social community; independently of its origin, however, it itself now becomes a new bond that creates definite social relations. In learning the language, the child absorbs a way of thinking and expressing his thoughts that is pre-determined by the language, and so he receives a stamp that he can scarcely remove from his life."

or this?

"In this sense, the tastes of man, as is also true of his opinions and beliefs and indeed much of his personality, are shaped in great measure by his cultural environment."

Dr. Horwitz,

I'm sorry I did not respond earlier to this point. That is probably because I am in complete agreement with it. And I did not mean to suggest that all Austrians pursue their research in the same way and under the same rigid parameters --- I think your willingness to entertain my comments illustrates this point. I am sure that there are many Austrians who would rather lynch me!

Now the relationship between social institutions and individual choice and action is complicated. While I do consider these quotes of yours to be "adequate", I think more needs to be said in order to give a complete picture of the extent to which individuals not only are influenced by their environment but also understand, empathize, and grow in it.

I'll just give a couple of examples.

Jack Knight wrote an excellent book "Institutions and Social Conflict" in which he makes the argument that the traditional conception of social institutions providing collective benefits is mistaken. He views the conditions leading up to rules, and the outcomes produced by those rules as the process of conflict between parties and individuals with widely differing interests. Therefore, institutions should not be studied according to their ability to provide benefits -- through the creation of families and language -- but rather by their distribtional consequences. A remarkable argument.

And I have to mention Knight again. Even if you recognize the dependency of the individual on social institutions, it is still incorrect to treat these wants -- which are shaped by an individual's "cultural environment" -- as given or facts that can be applied to an analysis of market phenomena.

So the mere 'recognition' of this point I have recently been emphasizing is not sufficient. An "adequate" appreciation and acceptance of this view would, I think, do a great deal in transforming the direction of one's research project. And judging by my impression of the recent literature on Austrian economics, I don't think many have accepted (or sufficently understood) this argument yet. For example, most of the recent graduates interested in Austrian economics --- brilliant students --- are basically anarcho-capitalists who use Austrian economics to apply their philosophical views to real (and imagined) problems. Austrian economics for them is simply a heuristic device intended to promote views and theories that overlook many important insights that Austrian economics has labored so intensely to develop.


First, one of the problems I think in reading your post is that you constantly point to a literature that many of us not only know, but have attempted to contribute to, while you think somehow that this is all new to us. I think this is a function of too narrow an understanding of what Austrian economics is.

Second, you make blanket statements about recent Austrian PhDs, but you don't mention any research that they have done or papers that you particularly object to. Why the silence on that? Again, without specific recognition of what arguments you are criticizing and what aspects you are criticizing it is hard to figure out what is what.

Third, I think Steve Horwitz's point is a little more pointed than you acknowledge. You tend to make criticisms of Austrians, then Steve points out that in fact Austrians have explicitly written on the topic and acknowledged your point. And then you shift intellectual ground. It is sort of like wrestling with jello.

Fourth, there are plenty of Austrians who do bad work and we should be critical of that bad work. But schools of thought should be judged by their BEST scholars, not their worse. But it is my impression that Austrians when the charge of dogmaticism, or ignorance is raised are always accussed of practices that only the worst in the tradition practice. Why not just focus on the best scholar in the modern Austrian tradition -- Israel Kirzner --- and see where he goes wrong? He does go wrong? But other great scholars in the Austrian tradition have tried to address those problems. For example, see Mario Rizzo's preface to the second edition of The Economics of Time and Ignorance.

As I have said before Matthew, you are an amazingly well read student and I think you have a great future in academia. But I do also believe that your reading and critical skills will improve drastically in graduate school. Learning to think seriously about social issues is an acquired skill --- there is a reason we go to graduate school (besides getting our academic union card) and there is a reason why mentors matter. And finally there is a reason why WRITING disciplines our thinking. You have to learn how to construct an argument that passes a peer review test. This is a conservative influence in academia (as Polanyi (and Kuhn) put it however, this is the essential tension in science --- the play betwee originality and conservativism). Scientific contributions are judged by at least 3 critera -- (a) plausibility, (b) interest, and (c) originality. Learning how to write artiles and books that make a scientific contribution is a very important skill. And unless you engage in that process, as my colleague Dick Wagner often stresses --- reading and thinking without writing is really little more than day dreaming.

You have a great future in front of you, but I think that future will be even brighter the more you focus on the best in the traditions you are engaging in critically and the more charitable you are in the interpretations of the works you are reading, and finally the more transparent you are in your criticisms.



Actually, I don't suggest reading Atlas Shrugged because it is written by Ayn Rand, a non-academic. As we all know, non-academics have no chance in making contributions in economics.

By the way Matt, neither of those quotes were from me.

The first was from Mises in *Nation, State, and Economy* and the second was from Hayek in *The Non-Sequitur of the Dependence Effect."

Beyond that, I second Pete's points. On one hand, you freely admit, and this is a good thing, that you haven't read as much as you'd like to in AE. But on the other, you make these sweeping pronouncements about how everyone has it wrong. Well, you can't know if everyone has it wrong if you haven't put the sort of time in that Pete's talking about.

It's that juxtaposition that probably bothers long-time scholars like us.

Matthew, How can you say that think most libertarians and Austrians ignore the importance of institutions, ignorance, and the the motives of human action? Have you not heard of Hayek, Mises etc?

Ayn Rand was a hack and incapable of writing sophisticated pro-capitalist fiction. Garet Garrett, on the other hand, was talented and capable of writing sophisticated pro-capitalist fiction.

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