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« 10 Austrian Vices and How to Avoid Them | Main | Austrian Vice # 11 »


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@leeson & klein:

are you really suggesting that 'Austrians' would have a better standing, if they cut off both of their legs (capital theory and subjectivism) and both of their arms (market as a process - i.e. the concept of disequlibrium - and spontaneous orders). Oh, I am sure: mainstream economics will embrace all those "Austrians" who act according to their standards. but those of us, who do not want to win the current 'modl'-contest, may keep the austrian heritage alive until the next scientific hype (or 'paradigm' if you want) has washed up all those you compromised their principles to false axioms and poor measurement for majorities sake.

I'm surprised how much I agree with Klein. Nonetheless, I can't refrain from commenting:

1. Right on. The most valid criticism against saltwater Austrianism is the (as yet) uninformative debate over whether the market attains to an equilibrium.

2. Klein's conclusion here stems from the confusion of a universal and its historically contingent manifestation, the identification of which is thymological (contextual, subject to error, etc.) rather than praxeological. What constitutes discovery is certainly relative to the knowledge of the agent in question, but that in no way impugns the universality of the theory, it merely makes its application contextual. Essentialism is the heart of Austrian economics, in that it treats those categories as really present in action, but the fact of subjectivism renders their manifestation relative to context. What we want to avoid is a naive application of such universal categories to history.

3. It's fair to say most Austrians don't have a non-normative standard for coordination, but I don't think that's fair to Hayek. His basic point that voluntarism preserves and aggregates local knowledge while coercion destroys it seems like a perfectly reasonable basis for a theory of coordination. Klein is correct, however, that this doesn't imply the existence of no disharmonies, but the point that (I believe) the Austrians have made is about what sorts of processes contribute to or alleviate those disharmonies.

4. Though I disagree with this point in principle, in practice I don't think I can counsel differently. I think I would put it this way: practice subjectivism, but try to avoid preaching it (too much). Ardent subjectivism makes us good economic historians, balancing thin methods with thick.

5. Fair enough as a generality. But some of us still think of Menger as the head of the school, and we're not budging on the name.

6. I think this is actually closely related to my response to point 5: "truth-seeking" is conspicuously absent from Klein's list of potential motivations. I think that is problematic.

In general, it is difficult not to sense the palpable disappointment of older Austrians that the Uncle Milty/Mises paradigm has not yet paid off--that paradigm being that men share the same basic values but disagree on positive science, and so economics can win the battle for liberty. I think they're just being impatient. I also believe that the truth is worth having for its own sake. But I'm a strange one.

Pete Leeson should add never use the words thymology and praxeology to his list of suggestions!

If the market does not attain an equilibrium what can we say about the welfare properties of markets?

I agree with the points mentioned by Leeson and Klein. A very minor comment for the blog-readers. Do not mistake mathematics (an a priori method) with econometrics.
'Ask yourself': why did Hayek answer in an interview in the late 70s he wanted to have again the chance of talking to Keynes and Schumpeter if they were alive?. Why he did not say Mises or Wieser?

#12 - never ever use the words thymology or praxeology. Shleifer & co would have no clue as to what the hell you mean. & they are the folk you should be hoping to influence rather than folk at the ASC.

A quick caveat - only talk about Aristotle if you want to take part in the Nussbaum-Sen capabilities conversation - but nobody cares about Menger's essentialism (or Menger full-stop to be honest).

All young Austrians should heed the advice of Prof Leeson & Prof Klein.

I am rather taken aback at the candidness with which Prof. Klein rightly admits that the Austrian plan coordination stuff is more a leap of faith than well-reasoned position.

I can live with this post.

Klein's Point 6 is something like "do you still beat your wife?"

The purpose of economics, including the Austrian variant, is to better understand the world. It's positive science. Klein's first proffered purpose, building a scientific edifice for LF econ, is an impossible and illegitimate enterprise. His second simply requires some philosophical analysis of others' equally impossible and illegitimate enterprise. Economics is positive science.

Re Klein's point 1: it's quite unclear what he means, but it's also quite clear that equilibrium and disequilibrium are meaningful & important terms -- enough so that Stigler, Friedman, Becker, and Lucas all insist that economics must be about individual maximizing AND equilibrium. For reasons I do not understand they also insist any discussion of disequilibrium is unscientific. But given what one must assume to be happening for the various equilibrium constructs to hold, it's obvious to me that to understand the world we also have to understand disequilibrium. Hence my interest in Austrian economics.

Re Klein's vice 5: Lewis Haney's ancient (1920s) History of Thought text has whole chapter on the Austrian school that makes it clear there was a subjectivist, equilibrationist, capital heterogeneitist school long before Rothbard & Kirzner. I've heard elsewhere this idea that some students of Mises invented the Austrian school -- the idea is simply wrong.

Is Charles Steele related to Remington Steele? That hot blonde from Last Picture Show was in that show right? Or am I confusing Charles Steele with Bruce Willis?

I've posted a reply to Adam and Charles Steele:

Nice perfume, he said.

Somehow time I climbed on is not present and, asking questions, found interesting and not so interesting answers. One of which was - « FailureAccident on the Chernobyl atomic power station, 4 power unit ». I became interesting and thumbing through sites was simply horrified. One I the fellow worker, in the past the meter man, has told about the friend which was the liquidator of consequences of this failureaccident, the truth or not I do not know. But spoke that - « firemen which extinguished a fire there, by turns washed in a showersoul groups, and muzhiks because of an irradiation were shone in darkness, but to live ithim remains few hours ».

You can be lucky!!!

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