Klein and Briggeman on Kirzner, Coordination, and Discovery

As many of you know, Dan Klein has been a critique of Israel Kirzner’s view of coordination for a long while. I was at NYU when in 1997, if my memory is correct (and Pete B. and Mario Rizzo remember this too), Klein presented at the Austrian Colloquium his first paper on various concepts of coordination (Schelling coordination, etc). Kirzner didn’t like the paper at all and even wrote a note that he distributed to everyone at the Colloquium explaining why Klein had it wrong (something Kirzner had never done before to my knowledge). Since then, Dan Klein has elaborated his criticism further and his latest paper co-authored with Jason Briggeman is now available as a working paper soon to be published in the Journal of Private Enterprise. I gave Dan comments on a former version of the paper (co-authored with Aaron Orsborn) back in February ’08 that I posted on this blog.

Comments

[Mario Rizzo]

I am sure that Professor Kirzner did not do the same anytime since Dan spoke either. Dan Klein is a person with too many ideas. He should stop thinking and rest.

[Daniel Klein]

Fred notes that my paper with Orsborn is coming out in JEBO, but it is only resubmitted.

[Daniel Klein]

BTW, since Fred and Mario have alluded to the 1997 paper and NYU seminar, I'd like to say that the tone there was entirely friendly -- "we Hayekians" -- and I was quite surprised by the vigor of Kirzner's reaction. In the paper (which as published in Consti PE 1997) I linked to Kirzner only to offer a clarification of his coordination talk. The tone was the same in my papers on discovery; I was clarifying this and that, I thought, affirming Hayek by affirming Kirzner. But I later realized that the "clarifications" really touched something much deeper, addressed in the new paper, and I realized it largely in the reception I got from the Austrians, or maybe I should say lack of reception. I came to wonder whether they are more interested in preserving their Austrian identity than in improving their ideas. The style of the new paper is rather fiece, I'm afraid.

[Peter Boettke]

Dan,

Not sure what you mean by lack of reception. Lack of being persuaded yes, but lack of reception no. People have created opportunities for fair hearings of your ideas, and in fact respected your presentation. Also, a 90% approval doesn't mean a rejection, it just means that they can go with you only 90% of the way. You often demand 100% --- it is more or less a 0-1 decision in your mind.

On the current paper, I had in mind several times to engage you but (a) juggling too many balls, and (b) not sure I could work the engagement productively (my fault not yours). But here is my "problems" with your paper (based on a reading many many months ago) --- (1) I think you are too literal when you look at the word coordination, in fact, there are substitute words that have the same meaning at different times in the literature (different words meaning the same thing, just as sometimes we have the same word meaning different things) --- cooperation and coordination are two such words and cause confusion. In Adam Smith's woolen coat is there not coordination when he discusses the social cooperation under the division of labor?; (2) I think you are unfair to Kirzner as a result of (1) and attribute to him attributes which in my experience the man is incapable of holding. I am not saying Kirzner is a saint, but he is the closest thing I have ever met to a man who holds the virtue of scholarship as sacred. I just don't see the reason why it makes your argument stronger to attribute less than the highest of scholarly standards to Kirzner.

I am happy that your work on coordination is getting a hearing. If it helps others understand better the nature of spontaneous order, then you have a solid contribution. But I am not sure in the process of introducing your own language, you don't also now introduce some new stumbling blocks to our understanding. Rather than play the language game on the concepts, I'd prefer if you used examples and more examples. This is an unfair criticism of you because you have used vivid examples in the past to capture the reader, but I think these papers on Kirzner are almost devoid of vivid examples. Instead, you discuss word choice and word meaning and word usage.

Finally, why do you think the identity issue is important for many of us? What do we gain from it? We must believe that there are ideas in this tradition which we think are good and valuable for understanding. When we find them wanting, we move away from them. Otherwise, explain the relative importance of different thinkers within the Austrian movement itself, or the relative importance given to different thinkers outside of the Austrian school that are treated with great respect (e.g., Ronald Coase, Harold Demsetz, James Buchanan, Armen Alchian, Leland Yeager, etc. to name but a few).

Why the uncharitable interpretation that this is another sort of rent-seeking game tied to an academic identity and not a sincere (if blinded) commitment to a certain research program in economics and political economy?

I just don't see the value added of the way you ultimately turn the argument. The fierceness might be pleasing to some, but doesn't it turn off some of the people you want to persuade.

But let me close again by making my first point. I believe that several platforms within the self-identified Austrian movement have in fact be open to your criticisms and appeals as well as arguments you have put forth in print. If individuals were more interested in preserving an identity and the purity of that identity don't you think you would have confronted more barriers to the platform?

If 100% convincing is the only way you will be satisfied, then I suspect you will be disappointed in every engagement. But heck with a 90% persuasion rate, I would actually saying you are doing better than almost everyone.

Pete

[Frederic Sautet]

Dan,

I have corrected my post and removed the sentence about JEBO.

Let me tell you that I have always taken your critique of Kirzner's coordination very seriously. I hope I am not reading your work with the hope of preserving some identity rather than advancing knowledge. I don't think I am. I think your critique is profound and challenging. I disagreed with your interpretation of Kirzner's view and I still do.

I am really glad you are publishing in this field, as this contributes to the strong internal debate around Kirzner's work. He has been attacked by fellow Austrians on many fronts, including his concepts of discovery, alertness, and coordination. This shows the importance of his work and unlike you I think many are paying attention to what you are saying, just as people are paying attention to Joe Salerno's or Peter Klein's critiques of Kirzner's discovery concept.

[Daniel Klein]

Pete,
You, Fred, Mario, and others certainly have been generous in providing platforms and in creating the institutions within which those platforms function. Lord knows Mario and Israel have been major benefactors, intellectually and institutionally, to me personally. After scrutinizing Kirzner's work, I can't feel that the criticisms Jason and I make are misplaced. I'm sorry, he just keeps shifting around to preserve certain Mises-style conclusions and forms of theorizing. And yes I think you, Fred, and others sort of play along. You and Israel need someone like me to attempt a real fierce criticism. The coteries that promulgate intellectual identities seem to become incestuous and intellectually negligent, and leading figures become validators of the circle. Groupthink. So I don't accuse Israel of some special lapse in intellectual integrity. I just think that "school" leaders such as he sort of end up going a little crazy to keep the distinctive school of science going. It's a process, first infatuation and commitment and then steps dealing with problems, in Kirzner's case steps forming a jungle labyrinth that grows increasingly abstruse. I've come to the view that the only way to get through it is with a machete. Gentle criticism like those of Martin Ricketts and Brian Loasby have been given a platform, but side-stepped by Kirzner and sloughed off and forgotten by the circle.

You know I think I've got cause: The Misesian image of science just isn't good for the cultural enterprise that is liberalism, and hence isn't good for humanity. So I think I can justify becoming fierce even with friends.

I'm glad I've got friends to argue with. Please remember that throughout our paper Jason and I repeat the theme expressed here in our abstract:

"Beyond all the criticism, however, we affirm the basic thrust of what Kirzner says about economic processes. Once we give up the claim that voluntary profitable activity is always or necessarily coordinative, and once we make peace with the aesthetic aspect of the idea of concatenate coordination, the basic claims of Kirzner can be salvaged: Voluntary profitable activity is usually coordinative, and government intervention is usually discoordinative."

[Peter Boettke]

Dan,

Very well.

I don't necessarily Kirzner as engaged in an act of intellectual contortionism to save Misesianism, but instead caught between two worlds of trying to square Stiglerian price theory with Misesian process analysis. That is his dilemma and it is what balls him up I would say. Ultimately, his theory of entrepreneurial discovery was first stated as the reconciler of Arrow's "theoretical lucuena" in price theory that he (Arrow) first identified in the Mo Abromowitz book in 1959 I think.

To me, the central mystery of economics (not Austrian, just the discipline) is the social cooperation under the division of labor and in anonymity. As Smith put it, we stand in need of the cooperation of millions at all times for our daily survival, but scarce in a lifetime do we have time to make but a few close personal friends. How is it that we survive and in fact thrive? Through the division of labor and trade. Again, Smith's woolen coat and Read's I, Pencil are getting at the same point.

Now once we start pecking away at this, the fundamental insights of economics start to emerge --- the importance of background institutions (property rights), the role of ideology (liberalism), the function of tying the rulers hands (constitutions), the efficiency properties of the market (relative price adjustment) and the wealth creation capacity of mankind (entrepreneurial discovery and mutual benefit), etc.

Is that Austrian? NO, it is just good economics. Did the Austrian tradition contribute to the evolution of GOOD ECONOMICS? Of course, and in my judgment perhaps more than any other contemporary school of thought. And who are the greatest representatives of the Austrian tradition? Well in my opinion it is Mises-Hayek-Kirzner, and probably in that order. Do Mises-Hayek-Kirzner make some mistakes in presentation? Of course, all authors do. Is it valuable to point out mistakes? VERY valuable.

But Dan, I think the mistakes are not in the carelessness of words, but instead relate to the choice of words used to relate to a conversation they were engaged in which we are no longer privy to. That is what we need to focus on --- the conversation THEY were trying to engage (which is not abstract but always contextual) and what terms were being used. Once we are privy to that context, then we can examine the word usage and the appropriateness.

So I don't see Kirzner has shifting ground to preserve Misesianism, but instead trying to take different slices of an argument to bring Misesian market process theory to new and different conversations (whether those conversations are neoclassical, or subjectivist, or Post Keynesian, or New Institutional, or Public Choice).

The audience one is directed to impact the way one argues.

Pete