Hans Sennholz: In Living Color on the Monetary Writings of Carl Menger

As readers of the blog know, my undergraduate teacher and mentor was Dr. Hans Sennholz.  The days we are living through right now are the days he taught his students about in his lectures and in his books, such as Age of Inflation (1979, rev ed 2006) and Money and Freedom (1985).  Sennholz was a critic of the world fiat currency system.  And in other books, such as Debts and Deficits (1987) Sennholz analyzed how fiscal imbalances and monetary irresponsibility went hand in hand.

Sennholz was a passionate defender of the teachings of the classical economists and the Austrian school of economics.  As a second semester junior and throughout my senior year, I was fortunate to be invited to his "graduate seminar" where the students (mostly from Argentina) that were earning their advanced degree from the International College under Sennholz would meet to discuss economics (Wednesday nights).  We read Adam Smith, David Ricardo, J. B. Say, John Stuart Mill, Carl Menger, Eugen Bohm-Bawerk, and Ludwg von Mises through the course of the year.  We discussed methodology, economic method, and public policy.  It was a great opportunity for me -- not yet a serious student, but still afforded the opportunity to be part of serious scholarly endeavors and witness it without the same expectations that the graduate students faced. I witneessed dissertation defenses and master thesis presentations in addition to our seminar discussions.  I just had to "wear a proper pair of trousers" (I was normally either in doctor pants, sweat pants, or shorts none of which were acceptable to Dr. Senhholz) and "keep up with reading" or as Sennholz characteristically explained "they will kick me out."  I had a wonderful undergraduate experience at Grove City College --- I was President of my fraternity (and all that implies), I was a co-captain of the tennis team (and we were very successful), I was dating my future wife and life partner, and I found my "calling" with economic argument and a career as a professional academic economist.  In short, professionally "I wanted to be like Hans".

Why did this man have such a powerful influence over me?  I think he was a great teacher of economics and he made the discipline come alive in a way that few teachers can do.  He spoke with a sense of urgency about the truth content of economics.  Listening to him made me want to read, and what I read made me want to listen even more carefully.  If a young student had any interest in economics, it would be hard for me to imagine a better "reading course" than I was exposed to at GCC designed by Dr. Sennholz --- first read Henry Hazlitt and Frederic Bastiat, then read Mises and Sennholz, then an indepth reading of the classics I listed above, and then a return to reading Mises, Hayek, Kirzner, Lachmman and Rothbard.  I might not have been as prepared as others entering graduate school for conventional economics --- I had read Mansfield's Microeconomics for intermediate, but my exposure to macroeconomics was reading Keynes (not a textbook) and Galbraith and Friedman.  Nor did I have formal course work in econometrics or mathematical economics as an undergraduate.  No, Sennholz had designed the major at GCC to include a year long history of thought sequence, and requirements in symbolic logic, as well as the economics courses which included principles, intermediate micro, contemporary (which in essence was intermediate macro), comparative, labor, and economic history.  Sennholz's courses ( I took everyone he offered, including futures trading) were mainly discussions of the main policy debates that followed from economic theory --- thus as I wrote in an essay honoring him many years ago now "relevance was a virtue" in his approach to economics.  Before I graduated I had read in economics not just the pro market side, but also critics of the mainline of economic teachings such as Malthus, Marx, Veblen, Keynes, and Galbraith, and not just Austrians but also Friedman, Stigler, and Buchanan on the market oriented side of the contemporary debates.  And we read original sources, not textbooks.  I did have courses in probability and statistics and calculus, but they were not tied to my economics major; just as I took several courses in philosophy and religion as part of my course of study.  Whatever I lacked in background for studying economic modeling and measuring, I more than made up for in my understanding of economic philosophy, public policy, and the writing up of economic argumentation.  This helped me because I understood the intuition of economics and what the modeling exercises were trying to capture and why it mattered for the underlying debates in economic theory and public policy.  And as Dave or Steve can attest to, we became obsessed with economics in graduate school --- including technical economics --- but from this perspective of getting at the underlying intuition (Dave remember the joy we had with Mike Alexeev and general equilibrium theory?  I am serious. Do you remember my presentation of Abraham Wald and the debates in the 1920s and 1930s on existence and stability? Or my paper on Stigler and Becker and utility theory).  As strange as it may seem given his extreme opposition to formalism, it was Dr. Sennholz who turned me on to the study of economic theory, and the urgency of getting the theory right in order to get the world of practical affairs right.

Well, today I stumbled upon a talk of his from right after I graduated from GCC in 1983. Thanks to the Mises Institute Media Project, you can see Dr. Sennholz discuss the monetary writings of Carl Menger.  I remember hearing a version of this lecture at GCC.  I think you can see in this lecture both his engaging style, but also this point about the urgency of the truth content I was stressing above, and also the connection between theory and practical policy which Sennholz always taught.  Bad theory results in bad policy; good theory guides good policy.  Enjoy!

Comments

[Brian Pitt]

Question: Did your initial exposure to economics at GCC, and being mentored by Sennholz engender your interest in bridging the human sciences?

[Peter Boettke]

Brian,

No, that was in a Religion and Philosophy course taught by Reed Davis. Dr. Davis had us read Michael Polanyi's The Study of Man, and I was reading Hayek's critique of scientism at the same time so that just started me down a certain intellectual path. Then Don Lavoie's influence on top of that as soon as I went to graduate school. Don's impact on me was huge.

Pete

[Dave Prychitko]

If anybody is interested, my interest started as an undergraduate, too, as I was exposed to Habermas in a social and political philosophy course.

Also, in grad school Thelma Levine's course in the sociology of knowledge. Lavoie made the great leap forward by bringing it all together in the context of the Austrian School (with some influence from Lachmann as well) and then finally an examined study of the Yugoslav Praxis Group as I turned to work on my dissertation. Finally, I'd have to mention Arjo Klamer and his comparison of formal economics and formal art.

[Peter Boettke]

Arjo Klamer was significant. The argument about the intellectual parallell between scientific movements and art movements was a fascination. In fact, as Dave probably remembers, I had the great idea of writing the paper "Equilibrium, Kirzner, and Mondrian's Victory Boogey Woogie." When I was at NYU, and MOMA had the Mondrian exhibit I visited the exhibit several times.

This is also why I was very impressed with the work of Robert Leonard on Neurath.

Pete

[Mario Rizzo]

Pete,
Yes, I remember the Mondrian Period. I think you told Kirzner that his entrepreneur was "Mondrianic" or some such word.

[Dave Prychitko]

Mario -- yes, that's right. It was when we visited the Mondrian exhibit in NYC. And yes, Pete, I certainly remember your paper title -- one of the best.

[Peter Boettke]

I still want to write that paper!!!

[Steve Horwitz]

Well I can say this: that is DEFINITELY one title he did NOT steal from me, nor that I will steal from him!

[Alex]

"This helped me because I understood the INTUITION of economics"
Greate!!!
I think many people grow as austrians through Theory of Money, and very often from B.A. level.

[Dave Prychitko]

Now, where Lavoie had it wrong: sociobiology in the National Economic Planning: What is Left? book. Why? He did the reverse anaology an argued that market prices are like ant pheromones! He took an ant colony and pointed toward the market economy. That discussion in his book should be reduced to a footnote -- an outright error. No wonder nobody ever picked that one up and ran with it.

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[Dave Prychitko]

Reminds me of yet one more influece: McCloskey's Rhetoric of Economics.

[Ian Dunois]

Hey Dave,

I just began reading Lavoie, but I first read that analogy in a recently published book, Price of Everything by Russ Roberts. I do think it falls short but I think as an analogy it helps the everyday layman learn how market prices help steer the economy. In explaining it to those who don't comprehend I find it very useful.

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[jack preston]

Dr. Sennholz was truly inspiring,even though he failed me on my first mid term because I was 15 seconds late to class. I remember he failed another guy for wearing sandals the same day. I ended up taking all of his classes.
this is surely the times he predicted. The central planners have destroyed our financial system and plan a remedy of more of the same. Its like trying to stop a person from drinking by getting him addicted to heroin. Thats where we are at. Buy GLD,ABX,AUY,GG.

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