Joe Salerno on The Austrian Movement

Joe Salerno in a review essay on Brian Doherty's Radicals for Capitalism. There are so many interesting parts of Brian's story, but Joe focuses on one aspect of that story and one that happened to rely on some interviews over the years that Brian conducted with me when I was teaching at NYU and at GMU.  Joe criticizes my interpretation of the Austrian movement.

I am sure I am guilty of loose lips and also of stating things in an interview less thoughtfully than I hopefully would in an written article, but the context of the discussion between Brian and myself was always one of "how is it that such a powerful set of ideas from Mises and Hayek could have such little impact within the economics profession at large?"  I tried to provide arguments which self-reflect on the behavior of Austrian economists themselves, rather to blame others for our failures.  I don't deny that there are formidable forces to overcome, but I also think this is a very competitive business and "we" have not competed very well.  And I think the evidence is around for us to consider who is competing well or not --- you either publish in professional journals or not; you either get tenure track appointments or not; you either get promoted or not; you either place PhD students or not; you either publish with top publishing houses or not.

It is not that the evidence is murky on this, nor it is really murky that this is the criteria to use in determining whether you are making an impact as a scientific movement in political economy.

Anyway, Joe Salerno --- who I respect tremendously for both the quality of his mind and his deep commitment to Austrian economics --- finds my statements objectionable.  There should be a fair hearing of views within Austrian circles, so for those of you who haven't read them check them out.  I could indeed be wildly off-the-mark, and if so, perhaps Joe will have a better answer to Brian's question as to why Austrian's have found it so difficult to advance their ideas when in fact on both an empirical (collapse of Keynesianism and collapse of real existing socialism) and theoretical (collapse of macroeconomics, and the development of new institutionalism and resurgency of political economy) level the world of academic economics has moved in such a positive direction.

Comments

[John]

I haven't read Radicals for Capitalism yet and read his review already. I feel like I might be biased now (it was pretty harsh). However, two pages does not make (or usually ruin) a book.

[Brian Pitt]

I just read Salerno's comments. And yes, they were pretty harsh! Although I have enormous respect for Salerno, being a frequent reader and a huge fan of classical and contemporary Austrian and libertarian work, it is no wonder why many Austrians are perceived as polemicists!

Having not read the book, I will leave with this question: Wasn't GMU ranked one of the top economics programs, in the South, a few years back?

[Mike]

Yes, that is all well and good Dr. Boettke. But, you seem to want to change the discussion toward the tired subject of the so-called failure of austrian economics in the academic realm. Forget that red herring for the moment as it is debatable and austrian economics is making great strides in educating people who really care about economics. Mainstream economics is nothing more than an intellectual circle jerk that has no real bearing on the real world of human interaction, innovation, and productivity.

Can you refute the substance of the review regarding normativity, methodology and those austrian scholars who were not influenced by GMU, your cult-like attitudes outside the norm of academia, and the influence of the "Kochtopus" on your thoughts and strategy?

[Peter Boettke]

Brian,

Yes, GMU was ranked as the top research productivity university in the south in economics a few years ago. And we have 2 Nobel Prize winners on our staff. But Joe is right that in 1982, GMU was an upstart university with a brand new PhD program. Joe in fact was invited to join the faculty at that time, but turned down that offer to stay at Rutgers.

But the GMU ranking is subject to various interpretations. The NRC ranks GMU in the 40s of departments, that is higher than places like Florida State, Clemson, Georgia and Auburn. But that was done a long time ago. A new ranking will be out shortly and we will see where GMU lands.

Other recent studies, such as by the graduate student at UBC that is reported at PhD.net ranks GMU lower. So rankings depend on who is doing the study, and what criteria they employ. Usually the NRC is considered the best ranking.

To Mike ---

I am not changing the discussion --- the interviews (multiple ones over several years) were always in that context of (a) how did I get interested?; (b) what is stopping these great ideas from advacning in academia?

I stand by what I said in response to those questions, though if I were to write up a serious history of the modern Austrian school of economics, and its fate within modern economics, I would not doubt be more careful and would have discussed more traditional areas of research within economics that modern Austrians are engaged in (such as money and macro). BTW, just to put things in perspective --- the modal economist writes exactly 0 articles on methodology, everyone of the people that Joe lists have written considerably more methodology than their colleagues in their respective universities. To claim otherwise is to simply reveal and misunderstanding of what is considered methodology in economics.

On my cult-like attitudes --- I don't consider them cult-like, though if I truly was a cult member I couldn't admit them! I do consider them both youthful enthusiasm combined with a very competitive nature.

Let me be clear, I am still enthusiastic about the vision that inspired me to be an economist: Austrian economics, radical libertarianism, and revisionist history. This vision is fundamentally Rothbardian, and my entire career has been spent attempting to figure out how to advance that vision in an academic world that is hostile on almost every margin to that vision. Also I am still extremely competitive. I want Austrian economics to WIN, to control the AER, JPE, QJE, to teach at Harvard, Chicago, Stanford, even MIT. I cannot believe we haven't achieved that, and I refuse to put the blame on others. Because as any competitive person will tell you, if you want to get better you have to look in the mirror and take responsibility for failures on yourself. Taking that responsibility is a first step toward the improvements required.

Finally, for young Austrians the criteria of what it takes to win this game are objective and obvious for anyone IN THE GAME. My point in the interviews was, in my perhaps poor way, to tell younger people to GET IN THE GAME.

Pete

[Steven Horwitz]

As far as the accusation of "cult-like" behavior goes, let me just note that Joe Salerno is currently the president-elect of the Society for the Development of Austrian Economics, an organization founded by "GMU Austrians" including Pete. Joe's contributions to Austrian economics are deserving of that recognition, whatever I might think of his analysis of Pete's comments.

By contrast, when Pete spoke at a Mises Institute event a few years ago, he was the recipient of hisses and raspberries from members of the audience.

For Joe to throw around the accusation of "cult-like" smacks of some serious chutzpah.

[Matt C.]

I found Dr. Salerno’s comments to be, well, bitter. It seemed as though he had an ax to grind. I have watched and listened to his lectures and I have found them to be very educational and I enjoyed them very much. Unfortunately this article has left a bad taste, for lack of yet another and better cliché metaphor. I was willing to give him a pass over the previous debate here on this blog and at the Mises blog, but this time of attack could have been handled very differently. He seems to take everything personal. I don’t know what you did to him when you were younger Dr. Boettke but it seems you have really pissed him off and he hasn’t forgiven you yet.

I would also like to point out that in Tyler Cowen’s interview with Russ Roberts found here: http://www.econtalk.org/archives/2007/09/cowen_on_your_i.html
He states that he has come to really appreciate the ideas of subjective value from his Austrian roots.

[Peter G. Klein]

Steve, that is not quite correct. Pete has spoken at several Mises Institute events (most recently, the Austrian Scholars Conference in 2003) and has been treated no differently from any other conference participant. You're referring to an incident, about ten years ago, when Pete was a roundtable participant (along with Roger Garrison, Larry White, Salerno, and myself) in a session on the future of Austrian economics. At one point in his remarks Pete described Ludwig Lachmann as an exemplar of "philosophical sophistication," to which an audience member -- a single audience member -- responded with an audible raspberry. There were no hisses or catcalls or anything else. The implication that Pete (or anyone else) is unwelcome at the Austrian Scholars Conference is pure fiction. I'm sure Pete will be happy to confirm this.

[Matt C.]

I just thought of something that I should have also added. It seems as though Dr. Salerno does not take into consideration the environment in which Dr. Boettke finds himself when he critizes the “miraculous” change in approach. From what I understand from reading both Dr. Salerno’s critique and this very blog Dr. Boettke was heavily influenced by Hans Sennholz in his undergraduate years and then your graduate years under the influence of yet another Austrian. Then Dr. Boettke goes to NY and then comes back to GMU with the addition of Buchannan and Smith. Also the additions of Williams, Cowen, Boudreaux, Roberts and Caplan. This would seem to create an environment of discussion that would allow new ideas that could be applicable to Austrian economics. Whether those ideas are controlled by the Koch brothers, who were highly influenced by Mises, or not. How is that bad for Austrian Economics? Why complain about private monies trying to expand the growth of libertarian ideas? It is possible that the Koch brother’s themselves realized that they were much more enthusiastic and it gave others the perception of radicalism. I know that people look at me like I have just killed a new born when I say that I am an anarchist. Ideas change incrementally, even socialist understand that they can’t just go in and move the political center to the left. What Austrian, and for that matter general libertarian ideas, have to do is show people the error of their ways. The younger generations brought around the ideas of socialism in the 60s and 70s and the younger generations are beginning to see the value in libertarian ideas.

[Stargeezer]

Many Europeans and most Scandinavians might argue with the statement that real existing socialism has collapsed. (I think.)

[matthew mueller]

This was originally posted at the Division of Labor blog in response to White's post, but I want to also make it available to readers of this blog.

It must be remembered and continually emphasized that Austrian economics is primarily a methodology, or a way of theoretically thinking of, and practicing, economics. There are of course core ideas that define this particular perspective, but there is no Austrian orthodoxy. No aspiring Austrian economist need conform to certain standards or views in order to be welcomed into the camp. Each thinker classified as an Austrian wrote from his perspective alone, and to suggest otherwise would be to force an understanding of their writings as something that represents other people, or an ideology, which implies a level of uniformity within Austrian economics that simply does not exist. For me personally, I am not interested in speaking on anyone's behalf; I speak for myself.

To recognize that there exists no an Austrian orthodoxy does not prevent us from pointing out errors others have made in their research. Indeed, as Thomas Kuhn pointed out years ago, true scientific progress can occur only in an environment in which there is passionate and vigorous debate over fundamentals.

Many young Austrians (especially the students of Boettke at GMU) seem to believe that the best way to pursue economics is to apply a common Austrian tool kit to current problems in hopes of finding an "Austrian" solution. This is entirely wrong-headed. No fresh and new discoveries can be made in science when the methods of investigation are already spelled out. Such an approach would lead to nothing more than "mopping up activities" or "puzzle solving activities" where the solution is already anticipated in advance. As Caldwell described it, such an approch "does not seek to produce novelties" because the rules have already been clearly specified. We always want to be alert to certain anomalies which can potentially switch, change or even subvert the existing paradigm. Of course such attempts will be resisted and there will ensue a bitter debate over the fundamentals of methodological perspectives. But this is what should be happening. We ought to desire a proliferation of competing views at all times.

I congratulate Joe Salerno for his constant criticism on any Austrian who is not associated with the Mises Institute. I disapprove of the attempts by everyone else to question the appropriateness of these criticisms. Critical dialogue is the most effective way to advance any methodology.

So Horwitz's post which complained about hissing and crying is also entirely wrong-headed. We want all the hissing and crying that we can get! Never be afraid to carry a critical attitude wherever you go. And most importantly, never be afraid to express discontent or criticism of another's work! I am afraid most Austrians working today are guilty of this.

[Steven Horwitz]

If I overstated the negative response to Pete's talk (as I was not there myself), then I apologize. But even one raspberry is one too many if we are serious about intellectual discourse.

I will keep to the view, however, that Joe's attack on Pete is below the belt, as did Larry White over at DoL, both for the accusation of "cult-like" and for suggesting Pete's changing view of the best way for Austrians to succeed was a result of the changing ideas of those who provide some of his funding. I find that to be a smear of the worst sort. Since when is correlation causation, for one thing?

I will also maintain, contrary to Mueller, that "hissing and crying" at someone offering a scholarly presentation is utterly inappropriate and smacks of "cult-like" behavior far more than anything Pete said in his comments to Doherty.

Finally, for the record, I claim no monopoly on the "best" way for Austrians to succeed. I largely share Pete's agenda, but more fundamentally, I think that Austrians need to display the virtues of reason, clarity, relevance, tolerance, open-mindedness, and the strong, though rebuttable, presumption of good faith with respect to those who disagree with them that should characterize scholarship by anyone and everyone. Within those bounds, let each Austrian economist find his or her own path.

It's when Austrians go beyond those boundaries that I think it right to call them out on it. The insinuation in Joe's review that Pete's "evolution" is driven by a desire to please those who pay the bills, absent more evidence than correlation, goes over the line.

The Kochtopus argument was bullshit when Murray started it in the 80s and it's bullshit now. My salary isn't paid by Koch (other than some fraction what I get on the side from teaching IHS and Mercatus seminars), yet my thinking is reasonably close to Pete's and has probably changed over the years as well. I've had one conversation with Charles Koch in my life, so where the link between Koch and my thinking? If that link isn't there, why assume it is for Pete?

Is it possible that people's ideas change and evolve as they interact with more people in the profession and other academics and begin to see that the game (as Pete calls it) isn't what you thought it was in grad school?

[Fritz]

I can see no good reason as to why anyone at GMU (Prof. Boettke included) should care one whit what the kooky cultists at the Mises Institute think about the GMU approach to Austrian political economy.

Prof. Horwitz is absolutely right and I applaud his sentiments above about hissing and cat-calling, etc.

[Peter G. Klein]

Moving beyond the specifics of this case for a moment:

I'm puzzled by the general reluctance of scholars familiar with the public choice literature to discuss the role of institutions in the development of doctrine. Politicians, journalists, and other "second-hand dealers in ideas" respond to incentives; don't we? After all, ideas don't develop in an institutional vacuum.

Of course, "externalist" explanations for the history of ideas cannot constitute the whole story. "This cancer research was funded by the tobacco industry, therefore the results are suspect." On the other hand, purely internalist explanations aren't sufficient either. I'm sure Steve Horwitz enjoys reading Dan Klein's EconJournalWatch as much as I do. It is full of articles about institutions -- funding, access to journals and other resources, and the like. Consider Dan's work on the SSCI, or Larry White's paper on the influence of Fed funding on research in monetary economics, or E.C. Pasour's piece on the role of the USDA in funding agricultural economics research. And, more generally, Austrian economists have long maintained that state control of higher education and research funding has something to do with the obscurity of the Austrian school.

So, what role to institutions play in explaining the development of Austrian economics?

[matthew mueller]

Here is the main point. Joe Salerno has presented an argument which contradicts the statements Boettke made in his interview with Doherty, and even directly challenged the intellectual honesty and scholarly productivity of those associated with Koch.

Predictably, what have been their responses? To castigate him for advancing such views! I am deeply disappointed by this. No one (as far as I can tell) has even begun to assess the merits or failures of the arguments Salerno actually articulated. Instead, they referred to his "cult-like" behavior and academic bias. But as Mises wrote in Theory and History, bias does not matter. It does not matter what influenced Salerno to write what he did. Instead, what matters is the content of his statements. Granted Salerno is bias in his criticisms, it still stands that he has produced an irrefutable argument.

No view or methodology can ever be conclusively established as certainly true. Once we recognize this, it will become increasingly evident that we need to welcome and encourage criticism wherever it might manifest itself, even among intellectual compatriots. I am not "wildly-off-the mark" when I say Mises was incorrect in everything he ever said. No one can exhaustively discover truths about the world. All statements are subject to refutation. But this is possible only in a milieu which encourages critical dialogue.

When someone advances a position, let us not welcome it as definitive; that will accomplish little. Our first task should be to try to falsify or refute it. This can only take place in an environment of incessant hisses and cries.

[Steven Horwitz]

Peter,

I'm happy to engage in those investigations, but accepting the argument that "institutions matter" requires more detailed evidence than Joe offered. Pete's gonna hate me for saying this, but without a detailed look at what he said at various times and how that might have related to Koch money, all Joe has, at best, is correlation.

I'd venture to guess that the formative events in Pete's change of views were his year at Hoover and his time at NYU, both of which were periods that involved him having to deal with the best and brightest of Economics and related disciplines. I'm guessing that changed his thinking about what Austrians should be doing.

And all of that was while there was little to no Koch money involved.

So I don't necessarily object to Joe's question, but he provides no evidence for the answer he offers other than correlation of a sort. And if my guess above is correct, even Joe's correlation is off.

If you're gonna do history and show that institutions matter, go get your hands dirty with the documents you need to really nail down your argument.

[Matt C.]

Mr. Mueller-
Your point is well taken on the importance of criticism, but it does appear to come at a personal bent, rather than an objective stance. The true problem with the criticism, and this is a valid criticism, is that Dr. Salerno is objecting to a several page dialogue in a book that was not even written by Peter Boettke. If in that short amount of space, by no means exhaustive, Dr. Boettke might have made statements that Dr. Salerno believed incorrect there is certainly validity in criticizing him. But, the main point that Dr. Salerno seems to have a problem with is completely one sided. The criticism on the amount of coverage deal specifically with "Austrian Economics" is small, but to put the vast majority of blame on Dr. Boettke is incorrect. A much more balanced critical book review would have put the majority of onus on Doherty for not getting more than one perspective on why Austrian economics has not broken into the "mainstream."

It also important to note that Mr. Doherty did bring up those in the Austrian school in other sections of the book, of which Dr. Salerno does not mention. Doherty does mention them for their participation and influence on others and what would become the libertarian movement. He may have shorted the Austrian school in that specific section, but by no means did he say that the Austrian school did not have an impact outside of a small group.

[cuhel]

Sour grapes on Dr. Salerno's part that he is not at GMU and not riding the alleged Koch money train?

Incidentally, who funds the Mises Institute and what is there agenda? How about all that Mises Institute pro-Confederacy and racist stuff that Professor Tom Palmer (www.tomgpalmer.com) has so ably and amply documented.

Mike writes "Mainstream economics is nothing more than an intellectual circle jerk that has no real bearing on the real world of human interaction, innovation, and productivity."

Thisis just silly. Shleifer etc are far more Austrian than the self-styled Rothbardian Austrians when it comes to the substantive questions they investigate. No aprioristic armchair theorizing but extremely high quality empirical work addressing the issues Hayek was concerned with.

The Boettke way is the future of Austrian economics. The Mises Institute way is the future for an ever-irrelevant bunch of Misesian priests prattling away to one another and a bunch of u-grads who do not really know any better but likely will as they grow older and read more widely.

[Peter Boettke]

Matt Mueller ---

Not sure that I ever did anything but invite others to read Salerno's critique and to suggest that we should discuss these issues. Can you show me where I ever said anything bad about Joe?

Second, I agree that scholarship should "hurt" --- there should be conjectures and refutations. But I also believe there is scarcity in time (research and otherwise) and thus scholars do not have to respond to every attempted refutation -- both in journals and certainly in less serious outlets like newspapers and blogs. Otherwise we would be chasing after critique after critique. That doesn't get us anywhere either. We must pick the battles we want to fight. And unlike what you say, when the really good economists wrestle they so so with civility and not with an edge of suspicion and disrespect. One of the best pieces of advice IHS ever gave students was, "always present your argument as if your opponent was sitting in the front row." You can be critical, but you can also be civil.

BTW, Horwitz is right IF my views have changed it is because of the amazing experience I had at NYU and at Stanford, and more recently at LSE. I learned so much from not only Rizzo and Kirzner at NYU, but also my other colleagues, and certainly at Stanford guys like Weingast, Greif, Milgrom and Lazear were amazing to learn from, and finally Tim Besley at LSE was phenomenal to learn from. I want the students I teach in Austrian economics to be able to experience those sorts of intellectual environments that one finds at NYU, Stanford, and LSE. And I would love it if all the best Austrian economists could experience those sort of environments of learning and engagement. We will advance our common cause when we attract individuals who can routinely "walk in those worlds" easily. It requires certain skills and luck to get the opportunity, but then you have to make the most of the opportunity once it is given to you.

I have mentioned this book before but I will again --- people should read Randall Collins, The Sociology of Philosophies (Cambridge University Press). I may get myself in hot water on this, but I really believe the self-critical reader will see that many of the behaviors that have plagued different philosophical movements are behaviors we will recognize in ourselves and our movement. While the behaviors that characterize the successful philosophical movements tend to be practiced today by those groups that in fact the most successful and occupy the prestigous positions, etc.

That is an empirical claim --- a conjecture subject to refutation --- but those who hope to reject better spend some time reading and understanding the history before launch a critique.

Finally, on the issue of funding. I have had the good fortune to have been involved with institutions, private and public, that have received funds from a variety of sources to promote economic research and education.

[Peter Boettke]

Something that is being lost in this discussion is that Brian has written an entertaining and informative "biography" of the libertarian movement. Brian did not advertise his book as a scholarly history --- for that I would recommend BRINGING THE MARKET BACK IN by John Kelley. No, RADICALS FOR CAPITALISM is in the mode of IT USUALLY BEGINS WITH AYN RAND -- a sort of gonzo journalism, easy reading, tour through an intellectual movement.

Joe's review -- as one friend recently pointed out to me --- concentrates on a few pages in a 600 page book. My views can certainly be subject to critique and even ridicule, but I think it would be a shame if readers walked away deciding that they shouldn't give Brian's easy reading book a look. It is a fun, irreverent, book. I hope this fact is not lost sight of in the judgment on my words from some interviews.

[Brian Pitt]

Mr. Mueller,

On Criticism: When do scholars acknowledge that their criticisms have moved beyond the knowledge-centered critique of ideas into the mean-spirited and bitter arena of excoriation?

On Boettke's Students: I have had the pleasure of a few email exchanges with a few of Boettke's past students (who shall remain nameless). NONE of them have encouraged me to abandon my empirical interest in econometrics nor have they dissuaded me from upgrading my mathematics skills (Btw, I am a graduate SOCIOLOGY student). They have only urged me to stay clear of the all too frequent habit, among human science model builders, of allowing mathematics and statistics to become an end in itself.

NB: The historical work done by contemporary Austrians, in a similar vein of Max Weber, certainly lends credence to the idea that "Institutions Matter."

(There simply needs to be more of it!)

[matthew mueller]

Brian Pitt,

You raise an interesting question, and I stand ready and eager to try my hand at an answer.

I would simply ask, what is the difference between a "knowledge-centered critique of ideas" and a "mean-spirited and bitter excoriation"? To me there is no objective and theory-independent criterion one can refer to in drawing the distinction. All meaning is subjective. No one has access to the "truth". Truth is not something waiting to be discovered by us, much as Plato and Kant thought it was. Truth is whatever we want it to mean. We attribute meaning to anything we come into contact with. So the real question is how we can persuade others to adopt our perspective, or views.

And this is what Michael Polanyi was talking about when he described the scientific community as a "society of explorers" or when he referred to "the republic of science." As Polanyi wrote: "every claim ... aims at being judged by others as in fact true."

So our task as seekers of truth should not be to atomistically attempt to reveal truths about the world. We should instead try to persuade others to buy into our point of view. What good does it do me if I stand convinced that I have discovered something true about the world but no one believes me?

[Steven Horwitz]

I think Mr. Mueller needs to reread his Polanyi if he thinks he can find support for the argument that truth is whatever we want it to mean and that there's no theory-independent way to say something is a "mean-spirited and bitter excoriation."

Given your view of strategy Matthew, it sounds like you've been reading Lenin not Polanyi.

[matthew mueller]

Lenin! Oh heavens no! If there's one good thing that can be said about relativism it is that it is probably the philosophy best able to protect us from people like Lenin.

Relativists are passionate about their refusal or unwillingness to accept any authority, or anything as given. Now I admit Polanyi was not as radical in this respect as say Derrida or Rorty, but he is certainly recognized as one of the leading post-modernists of the 20th century.

I am very skeptical of philosphical approaches whose implications commit its followers to a given outlook. Mises commits one to the free market, while Leninism compels one to embrace totalitarianism. Both philosophies believe they have the last word on the subject.

But notice the flaw in Misesian economics. His entire approach rests on the assumption that economics can be (and is) a value free science. I can no longer accept this notion. One will have to demonstrate that it is possible to observe the world from a god's eye view --- that is, independent of a theory or specific context. This is impossible. Max Weber made two incredibly important but contradictory discoveries.

First, he claimed that all observation is theory-laden (discrediting the methodology of the German Historical School)

Second, he believed economics can distinguish between positive statements and normative concerns.

But how does this follow if all observation is theory-laden? Mises' vertfrei falls flat on its face.

This is why I have come to increasingly embrace relativism, skepticism, and (.... nihilism). And I am sure Lenin (and Mises!) would not approve of any of these positions.

[Rafe Champion]

The out of context abuse of Margaret Thatcher's statement "there's no such thing as society" signals that anyone who gives an interview on the record and does not insist on vetting the final copy is asking for trouble. Some people can speak off the cuff in flawless sentences and paragraphs, correct in fact and grammar, meaningful and coherent. However it is more common to talk with false starts, half sentences, out of context asides and diversions, exaggerations and errors which pass muster in an animated conversation but look dreadful in print. However once seen in print they can usually be fixed up quite easily.

[Rafe Champion]

The points about value freedom raised by Matthew Mueller would appear to be some way removed from the original Salerno/Boettke contratemps but because he thinks he has trashed Mises (and vindicated relativism in the process) it may be helpful to show that his case is seriously defective. It is based on the failure to understand the nature of the fact/value distinction and the function of scientific theories in framing research.

A defence of the value freedom of scientific knowledge can be found here http://catallaxyfiles.com/?p=939 with a defence of the following propositions:

1. The truth of statements of fact is value-free.
2. The truth of explanations of events and phenomena is value-free. This applies in principle to the explanation of human actions where values and plans are a part of the explanation.
3. Statements of value cannot be derived from statements of fact (the dualism of facts and values).
4. General theories cannot be derived from facts either.
5. Propositions 3 and 4 do not mean that values or theories are irrational or arbitrary.
5. The choice of research projects may be guided by moral or political values, but it may not.
6. The application of the results of research inevitably involves moral or political values.

[Jeffrey Friedman]

Hey, guys, lighten up!

Pete's interview in the Doherty book is, as always, HONEST. And then he had the courtesy, or lunacy ;-) to direct our attention to Salerno's largely ad hominem attack. Yet Salerno raises serious points, as does Pete. So what about discussing them, rather than their authors?

For example, there is this:

Pete forthrightly pointed out in the interview that Austrian economics and libertarian philosophy were coupled together as an ideological package by his teachers. Indeed, the very same coupling is the essence of the "LvM" (really "Murray Rothbard") Institute. And then Pete slipped, by generously stating off the cuff that Rothbard actually *justified* this coupling.

Now comes Salerno to call out this mistake of Pete's, and Salerno's right: Rothbard never even *tried* to justify the coupling of Austrian economics and libertarian philosophy. So we are left with the impression that these two systems of thought, which deal with entirely different realms (the empirical world of the economy and the a priori world of the "essences" of ideas like "freedom"), just happen coincidentally to lead, in Rothbard's mind at least, to the very same political conclusions. Odd, isn't it? Divine providence, perhaps?

(In Wertfrei-speak, the way I should have said it is that Austrian claims to prove that laissez faire produces the best possible outcomes *if one cares about consequences like mass prosperity*; while, mirabile dictu [as Rothbard liked to say], laissez faire just happens to be the conclusion of a priori libertarian normative philosophy, too.)

In summary, Salerno is right about the detail but misses the big picture: Rothbard failed to justify the Rothbardian synthesis that is the stock in trade of the LvM Institute! Meanwhile, Pete got a detail wrong, but look at the big picture: Rothbard *should have* provided the link that Pete mistakenly said that he did provide. So, given that he didn't provide the link, where does that leave the Rothbardian synthesis?

Jeff

[Joe Salerno]

Below is a comment I posted on the Mises and DoL blogs that I believe is germain to some of the comments made here. For the less careful readers of my review note well that I never said that Pete or any other member of the GMU program shaped his or her research agenda in the interests of pecuniary gain; I simply pointed out that this was a reasonable inference from Doherty's skewed, uncritical account of the facts (see below).

I am delighted that Larry White took notice of my review on his blog and
appreciate his thoughtful comments. I am in profound agreement with his
statement, "There is no one dominant point of view among current Austrians
about how best to go about doing economics, or about where others may have
pursued the wrong approach." He believes that the failure to recognize this
point is one of the most important shortcomings of the Doherty book. Indeed
I echoed this point in an exchange of emails with Pete Boettke yesterday.
Quoting from my own email:

"Note that I acknowledged that your points were
probably made in the context of an informal oral interview and that you
likely had no idea how they would be used. Still since you were the only
person whose views on the development of the Austrian movement Brian
decided to present--and to do so as established fact with absolutely no
critical analysis--I naturally focused on a
point by point rebuttal of your position. Had Brian consulted a number of
other Austrian economists and given an even-handed presentation of
conflicting views, I would not have proceeded in this way and probably
would never have even written the review. I realize that there are possibly
as many interpretations of the development of the modern Austrian movement
as there are Austrian economists, so I was not singling you out just
because your view
differed from mine. But Brian never gave his readers even a hint of the
diversity of opinion on this important question among Austrian economists."

I do however have two objections to White's second comment, regarding my
alleged suggestion "that a change in Boettke?s perspective has been
driven by the changing agenda of his department?s chief soft-money
source."

White completely misses the point of the second part of my review. I never
suggested such a thing. I only used the information presented by DOHERTY HIMSELF to demonstrate that this was a reasonable inference from the facts
and statements he presented but failed to analyze. As I wrote in an email
to Pete yesterday, performing this exercise of rational reconstruction of
the development of the GMU program "was part of an immanent criticism
trying to exemplify Doherty's complete lack of interpretive analysis.
Doherty himself presented all the info in the text that was needed to allow
a reasonably informed reader to infer that this was indeed the case [that
pecuniary incentives strongly shaped the research agenda at GMU] My
interpretation is not based on any info from outside the text." Since I
previously had criticized Doherty's investigative skills and ability to
connect and assimilate his facts, I clearly remained agnostic on the
accuracy of this interpretation.

I might also note that before I presented this immanent critique, I
carefully engaged every one of Boettke's arguments in greater detail than
he stated them. So I am truly baffled by White's rhetorical question:
"Does Salerno want a reader of his review to judge the argument on its
merits, or does he want the reader to feel compelled to ask: who?s
supporting Salerno, and what?s their agenda?"
My second objection to White's negative comment is his contention that any
suggestion that an academic opponent's labor supply curve is upward-sloping
is beyond the pale ("That?s a low blow for an academic journal review.")
The denial that "filthy lucre" enters the value scales of economists in
making their research decisions is indeed a strange position for White or
any economist to take and has long nettled me. In the mid 1990s, I
refereed an edited volume of articles on how individual economists went
about their research, how they worked and what advice they had for aspiring
research economists. The articles were written by rising stars in the
profession. In one of the papers I refereed the author, a now very famous
economist, advised other economists to "spend the time to make every
article as perfect as possible." I suggested that he revise his statement
because it was inconsistent with the doctrine of opportunity cost. What if
spending the extra time to perfect one article that was already publishable
cost the author an opportunity to write and publish a second article in an
equal or higher ranked journal, I asked. The editor told me that the
author bristled at my suggestion and refused to make the revision.

Lastly, White refers to Boettke's response to me as a "model of scholarly
decorum," and I readily admit it was temperate in tone and respectful.
Unfortunately it did not engage any of the substantive points I made in my
review, which is also an important attribute of scholarship and the very
rationale of academic discourse.

[Lawrence H. White]

I thank Joe Salerno for his lenghthy reply (posted above) to my blog comments on his review.

Joe and I agree that Doherty should not have treated Pete Boettke’s account of the Austrian revival as authoritative. Joe has another account, as do I, as do other participants. I haven’t taken a position on the accuracy of Pete’s account, nor have I objected to Joe’s substantive critique of it.

Now to our disagreements. Above, Joe writes: “I do however have two objections to White's second comment, regarding my alleged suggestion ‘that a change in Boettke’s perspective has been driven by the changing agenda of his department’s chief soft-money source.’ White completely misses the point of the second part of my review. I never suggested such a thing.”

Never suggested such a thing? Joe that in his review wrote that, if one assembles facts scattered about Doherty’s account, “one can reasonably surmise that Boettke's intellectual volte-face was a rational and deliberate response to the shift in the strategic vision of the Kochs. As the orbit of "Planet Koch" goes, so go its satellites.” Silly me, I took this “rational and deliberate response” and “satellite” talk to be suggesting just such a thing. I took “one can reasonably surmise” to mean “I, Joe Salerno, offer as a reasonable surmise”. Joe now says that he himself “clearly remained agnostic on the accuracy of this interpretation.” I fear that Joe’s agnosticism was far from clear. At least, I missed it.

So I’m glad that Joe has clarified his meaning. He’s not saying that Pete is a puppet of Kochthink. He really meant: “As a journalist, Doherty should have tried to explain Boettke’s intellectual volte-face, and in particular examined the hypothesis that it was a rational and deliberate response to a shift in the strategic vision of the Kochs. It is beyond the scope of this book review to take any position on this hypothesis.” (I would have no objection to such language being a “low blow”.)

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.

As a matter of Pete’s personal biography, I agree with Steve Horwitz above that the change in Pete’s outlook came from his year at Hoover – it awoke him to interesting debates going on among mainstream economists. The influence of Tyler Cowen on both Boettke and the GMU program more generally probably also figures in the story.

Finally, Joe says that, given that he “carefully engaged every one of Boettke's arguments,” he is “truly baffled by White's rhetorical question: ‘Does Salerno want a reader of his review to judge the argument on its merits, or does he want the reader to feel compelled to ask: who’s supporting Salerno, and what’s their agenda?’” Let me clarify: I wasn’t denying that Joe had substantively engaged Pete’s arguments. I was wondering why he had added what I took to be a low blow, namely calling Pete an intellectual “satellite” of the funders.

[Steven Horwitz]

I'll just add one more brief comment for the historical record: I ought to give credit to Larry for his correct judgment at the time that the "hermeneutical" turn that Don and many of us took in the late 80s was more of a mistake than a benefit to Austrian economics. I do not think it was totally without value, but the opportunity cost was probably too high. Larry was right about that then and in looking back, I wish we had made some major adjustments at the margin as to how we invested our time.

Like after any malinvestment, the structure of human capital among those of us at GMU at the time has readjusted itself (I think ;)), but not without the usual waste in the process.

Don remains a, if not THE, formative figure in my professional career, but in looking back, I think he made it too easy for some of us to run from economics (in ways that he had) and that was a mistake on his part and ours. I see Pete's evolution of strategic thinking as having seen the weaknesses in that strategy.

The "game" Pete wants us to get into is Economics and I think some of us forgot that back then.

[Joe Salerno]

Larry evidently did miss or misinterpret my earlier transition paragraph to the second part of my review where I wrote:

"Had Doherty possessed even a modest endowment of the investigative instincts and skills of a good reporter, one would have expected him to have elicited the thoughts and impressions of some of the Austrian economists mentioned above . . . But even the information he did succeed in drawing from the interested and narrow set of sources he consulted should have sufficed to allow Doherty to formulate a highly instructive narrative of the development of at least one segment of the Austrian movement. If he had done this, then Boettke’s claims would have been placed in a context in which they were rendered intelligible and even attained a restricted validity. If we perform this task for Doherty limiting ourselves strictly to the information presented in his book, we gain an important insight into the crucial role of property and institutions in the creation and shaping of an intellectual movement."

I do not think my statement is very opaque: There is an interesting and intelligible narrative to be constructed even if we rely solely on Doherty's flawed reporting. And it is inconsistent with his unsupported conclusion that Boettke and the GMU program constituted the pith and pitch of the Austrian revival. Of course an intelligible and provocative narrative woven from incomplete and freewheeling reporting does not a true story make.

And why isn't Larry incensed at the low blow struck by Pete at the rest of us mundane Austrian economists for allegedly harboring an unscholarly and puerile "normative revulsion" against an entire branch of economic study (public finance)? And where is his indignation at Pete's below-the-belt swipe at the rest of us for allegedly promulgating and promoting an "X-files conspiracy theory" to explain our marginalization by the mainstream profession? Not only do such allegations lack in "scholarly decorum," they are blatant falsehoods as I think I succeeded in demonstrating. These are not meant as rhetorical questions, I would love to hear what Larry has to say in response.

[matthew mueller]

I don't see how the study of hermeneutics can be regarded as a waste of time for any academic discipline. And Gadamer is not the best source to consult on this subject, as he was more a product of the work of Heideger whose intellectual contributions to this field pail in comparison to the more recent work done by Derrida and Rorty. Just because Don considered him the authoratitve source on hermeneutics don't make it so!

Meaning is not a fixed concept. It evolves as our understanding of certain texts, events or developments change. That is the central idea of hermeneutics. To reject this philosophy would be tantamount to saying that we need not bother with the power and influence of meaning.

I would like to be provided with references to articles White wrote on this subject, now known as the "White critique" of hermeneutics. One need not "run away" from economics in order to delve into a study of hermeneutics. From what I have read so far, it seems that Austrian economists now just accept the fact that hermeneutics has no place in economic science. But where is the evidence for it? Surely there are articles somewhere. Could someone please provide some links? Thanks.

[Rafe Champion]

Matthew Mueller summed up the central insight of hermeneutics in his second para, beyond that I am not sure what the books by Derrida and Rorty have contributed that is new and helpful.

The hermeneutic turn could have been averted if people had taken on board Popper's critique of essentialism (OSE, 1945 Chapter 11) which identified the obsession with misplaced precision in terms and concepts as a pervasive and disabling error in the social sciences.

http://sabhlokcity.blogspot.com/2006/08/open-society-condensed-chapter-11_11.html

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

The hermeneutic turn was mostly about getting the meaning of communications but meaning is always in context and the contexts where Derrida et al worked worked was usually far removed from practical problems where commonsense and evidence can be brought to bear.

"The more fruitful debates on method are always inspired by certain practical problems which face the research worker; and nearly all debates on method which are not so inspired are characterized by that atmosphere of futile subtlety which has brought methodology into disrepute with the practical research worker." (The Poverty of Historicism, page 57).

[Anthony]

I am surprised by all the cheapshots against the Mises Institute (no institution does more to make known the works of Mises and those whom he influenced than this institution, and it would be a shame for it not to exist; Tom Palmer's "critiques" of it have time and time again been debunked for the vitriol they are.) What possible role do they serve? To further divide Austrianism? How utterly stupid. Austrianism has always incorporated a good deal of "in-house" criticism that has allowed it to correct errors and improve on its contributions. Why now divide it into "GMU Austrians" and "LVMI Austrians", or whatever else meets one's fancy? Both GMU and the LVMI contribute immensely to Austrian Economics. Usually those who call LVMI Austrians "cultists" are the ones with the most pathetic understanding of praxeology out there.

Both Salerno and Boettke have conducted themselves in a scholarly manner. Perhaps other "Austrians" should learn from them...

[Steve]

Salerno sounds really bitter. Maybe he is worried that he really is mundane.

[Arrow Debreu]

The president of the Society for the Development of Austrian Economics attacks a past president of the Society over his comments on why Austrian economics hasn't made more headway. The past president responds, allies from the various camps appear, and the battle royal begins!

With such stimulating discussions and important contributions I just can't figure out why you guys aren't more successful!

[max]

Austrianism will not make headway until we ditch the label austrian and ditch the cultists & ideological kooks who think Murray Rothbard is a god rather than a very average economist who made no real contributions (say in comparison to Acemoglu or Shleifer or Hayek or Buchanan or Kirzner) and pretty much zero influence in any way other than teaching a bunch of u-grads silly slogans about natural rights and praxeology.

Take a look at the SDAE program put together for the SEA meetings this year and compare it to previous years. It strikes me that the kook-quotient is way up on previous years (e.g., libertarian activists giving talks on private protection rather than academic economists). Arrow-Debreu's comment in bitchy, but has a grain of truth in it (witness the hysterical reaction from various sides when the saintly Prof Klein suggested ditching austrianism as a label a year or two back)

[Peter Boettke]

I think blog discussions are very limited and tend to move quickly to name calling or at best "gotcha" style of argumentation. Both of which are completely unproductive from the point of view of achieving a mutual understanding.

The most impressive scholars/economists you will ever meet strive to be life-time learners, constantly taking the best insights from others througout their active research and teaching. I would argue that Hayek, North, Coase, and V. Smith represent the ideal type from this perspective (and from my experience).

However, I really don't think the label Austrian or not is the issue here. Rather, it is about cultivating a culture of life-long learning among those who are inspired by the Austrian school tradition. I think to do that we have to first admit imperfections in our thought, and a felt uneasiness about our situation. If instead we are self-satisfied in our thought and our situation, then why would we go through this exercise of criticism and thoughtful examination of how to change our status?

If we can cultivate a culture of life-long learning, a culture of excellence in communication skills, and a culture of civility in confrontation, then the label of Austrian economics will not be a hinderance but a badge of honor within economics, political economy, and social theory.

As a matter of admission --- I must confess confusion over comments about self-indulgence that were made at cattalaxy. Perhaps someone couild straighten me out.

Pete

[max]

"If we can cultivate a culture of life-long learning, a culture of excellence in communication skills, and a culture of civility in confrontation, then the label of Austrian economics will not be a hinderance but a badge of honor within economics, political economy, and social theory."

Do the Mises institute and those associared with it even come close on this score?

I agree with the substance of your remarks though

[max]

Is this the catallaxy comment?

"Umm one of Salerno’s points is that Boettke’s own work is more ’self indulgent’ than many of the non GMU Austrians that Salerno names (the working papers list is not representative of the non-GMU Austrians’ corpus). I agree and Boettke is extrapolating falsely.

And if I were Salerno I would also be annoyed that Boettke took it upon himself to claim that Austrians are only into methodology whereas this is more characteristic of Boettke’s work (as is the ’sociology lite’ aspect I alluded to, I find Boettke’s promotion of a gadfly for gadfly sake institutionalist like Rodrik and his simultaneous denigration of formalism very annoying). First they experimented with hermeneutics, and now the Boettke influence is turning Austrianism into its antithesis, this anything goes Historical Institutionalism. And also because of his math-phobia.

In many respects some GMU Austrians are every bit as cultish as some Auburn Austrians whereas some non-GMU Austrians (like Garrison and Yeager) do very good and relevant real-world economics"

Garrison & real-world economics? Yeager is great though

[Peter Boettke]

Max,

I think you are being a bit too harsh on these guys. Rothbard made several significant contributions --- we shouldn't forget that, and we must respect his courage, his insight, and his vision (at least that is what I would argue).

Also, all of the scholars Joe names on his original list are economists that I have learned much from and continue to learn much from. Roger Garrison is an insightful thinker and in many ways a wonderful role model for younger Austrians.

I have learned much from the generation of Austrian economists that came before me. In fact, it is in answering the question as to why we haven't had greater success despite being so insightful that got me into trouble with Joe Salerno in the first place. But if I thought that the Austrian school was worthless, I wouldn't be having this dicussion, and I also wouldn't be on this blogspot. Instead, it is precisely because I value the contribution of the Austrian School of Economics so highly and because I respect the economists who practice Austrian economics so highly that I even care to entertain these discussions.

Pete

[the querist]

Professor Boettke - please can you name one contibution by Rothbard that Shleifer or Acemoglu or Coase would consider a contribution?

What exactly are Rothbard's real contributions?

[max]

With respect to Professor Boettke (the work of whom I have much admired for several years), I do not think my comments about the SDAE this year are at all harsh. Gil Guilory (a noted libertarian kook and not an academic) is on the program. In what way he is advancing austrian economics?

I agree that Professor Garrison is a fine thinker I do not think he is engaging real-world phenomena though. I may well be wrong as I have not kept up with his recent work.

Selgin is a model for young austrians i think (I guess you'd agree). No mention of praxeology or similar nonsense from him (I've just discovered his website - actually by following a link from this blog!).

[Peter Boettke]

I will have to look at the SDAE list of panels, I haven't done that yet.

As for the contributions of Rothbard, the question is put in a way which is hard to answer because it requires not just an assessment of Rothbard from the point of view of "truth-tracking", but also an assessment of how others will see his work as it relates to their work.

I have tried to make a case that Rothbard should be recognized for his contributions to the theory of real-existing socialism ... follow this link:
http://economics.gmu.edu/pboettke/pubs/2004/forgotten_contribution.pdf

[max]

Having read that paper it is Prof Boettke and Cyone who have made the contirbution. Not Rothbard.

Please look at SDAE panels and report back.

[Curious]

Max, what is nonsensical about the term praxeology? That most people are too stupid to open a dictionary and understand it? Do you also have problems with Mises? Reisman? Block? Why should Coase's views on Rothbard even matter? And yes, the Mises Institute most definitely does cultivate such an atmosphere as described by Dr Boettke. It has its drawbacks of course, but these need only concern individuals who cannot discriminate. What would you say Dr Boettke? I see no point whatsoever in dividing Auburn/GMU Austrians.

As for Garrison, have you read his Time and Money Max?

So far Dr Boettke has demonstrated immense patience and maturity. Unlike some on this blog, it seems he can value the work of his fellow Austrians without denigrating them as "kooks" or whatever else meets one's fancy...

[Max]

Curious - if you think Coase does not matter then you are not worth my time.

You probably think a wacko like that crazy self-publishing Mises Institute associate Gary North refutes Coase with his BS about Coase thinks you can stick pins in little kids eyes.

[Max]

Praxeology is not in the dictionary Curious. It is in Mises made Easier by Greaves, but I had to look up Greaves' explanation in the book 'Mises and easier made easier'. I was still confused so I turned to 'Mises made easier made easier made easier.'

The logic of choice is standard intro u-grad micro the last time I looked.

[Max]

How many times does Acemoglu use praxeology in his work?

Acemoglu is the standard we have to meet. Not the standard that wins applause at church meetings of the LVMI and its ill-educated non-economist acolytes.

[Curious]

Why the vitriol Max? Can't you post without going into insults?

ANY academic economist worth his/her salt should be able to find out with ease what the word praxeology means. It certainly poses no problems to someone versed in philosophy (praxis = action.) Of course Mises had a far more rounded education than most modern economists. Give dictionary.com a visit and search for the word. I suppose someone ought to release "Mises for Dummies".

I never said anything about Coase, other than why should his opinion on Rothbard matter. And yes, his works are taught on u-grad courses, but with often treated with mild derision in textbooks, unfortunately.

I am not sure if Acemoglu is an Austrian economist even, so I don't know whether he would use the word in the first place. I certainly agree with you that Austrians should hold themselves to the highest level of scholarship possible, and in several regards the GMU and other non-affiliated Austrians are exemplars of this approach. I simply see no point in attacking the LVMI associates, many of which are themselves Neo-Austrians (on the side of non-economists they are philosophers and historians, and are equally valuable IMO.)

You never answered my question on Mises, Reisman or Block or Garrison.

[max]

The logic of choice (the science of human action) is standard intro u-grad micro the last time I looked.

And that relates to Coase in what way? If you do not see why Coases's opinion of Rothbard matters then there is no point trying to explain to you.

"Do you also have problems with Mises? Reisman? Block?"

Mises is important though rather dated. Definitely of interest from a history of thought angle. Reisman? Just plain goofy. Block? Always entertaining but hardly Shleifer or Tullock or Cowen (though that is true of all thrre Austrians you mention).

"As for Garrison, have you read his Time and Money Max?"

Yes. And that relates to modern empirical macroeconomics in what way?

[Curious]

"If you do not see why Coases's opinion of Rothbard matters then there is no point trying to explain to you."

Oh but I am sure given the opportunity you could explain it. So go ahead.

"Mises is important though rather dated. Definitely of interest from a history of thought angle."

Dated in what regards?

"Reisman? Just plain goofy."

Why?

"(though that is true of all thrre Austrians you mention). "

Not of Mises it isn't. Even Friedman admitted he deserved a Nobel Prize, given that you put so much stock into the opinions of such economists.

"Yes. And that relates to modern empirical macroeconomics in what way?"

Mere curiosity.

[max]

Always entertaining but hardly Shleifer or Tullock or Cowen (though that - not beiong goofy - is true of all thrre Austrians you mention

and where did Friedman ("such economists" indeed - how silly of you) say Mises deserved a Nobel.

Compare Human Action to Romer's macro text to see why dated.

[Curious]

" (though that - not beiong goofy - is true of all thrre Austrians you mention:"

Your comment is unclear. I mentioned three Austrians (Block, Mises and Reisman), one of which you said is "goofy". You still haven't responded as to why Reisman is "goofy".

Re Nobel Prize was in Mark Skousen's Vienna & Chicago on p245, it is from private correspondence. When I said "such economists" I meant major neoclassical economists.

Re Romer I will when I get the chance to. I fail to see how many of Mises's contributions are outdated though, even if not all of his ideas were correct.

[Max C.]

Who is this other Max and why does he have an ax to grind with Austrians? (Why is he even reading this blog for that matter)?

[max]

This is an interesting blog (and that is all the reason I need to be here - why is Max C. here?). I am sympathetic to the program of advancing austrian ideas (especially the ideas of the Boettke wing but not to the austrian movement (which includes many crazies and wacko types). The program of advancing austrian ideas would be better served by ditching the crazies.

Well, if Skousen said it it must be true then.

[max]

Shleifer, Acemoglu etc are not neoclassical economists (they are mainstream economists). Neoclassicism is dead at leading research institutions - read the book by Rosser and Colander on what is going on with cutting edge economics.

If any austrian never says natural rights or praxeology ever again then even that will be far too soon.

[max]

The Changing Face of Economics: Conversations with Cutting Edge Economists by David Colander, Richard P. F. Holt, and J. Barkley Rosser

univ. of michigan press

[David J. Heinrich]

Rothbard made numerous contributions, including even areas of financial economics (such as how large a firm could conceivably grow, due to the elimination of necessary external markets).

By the end of his life Friedman disavowed his support for fiat money, saying that in retrospect we'd have been better with the gold standard (agreeing with Rothbard; better to admit a mistake late than never).

Mises foresaw the collapse of socialism, while mainstream economists took decades to catch up with him partially on that; and even then to have only a partial explanation (the incentives and information problems, ignoring the calculation problem).

Mainstream economists were exemplified by the idiotic Paul Samuelson, who thought the USSR would overtake the US in GDP still in the late 1980s. Look in his textbooks. Neither Paul nor any other mainstream economist that I'm aware of ever apologized for that, nor the damage it caused.

[mainstream guy]

You forgot to mention when Rothbard walked on water and fed the hungry masses with the loaf and fish. IMHO his discovering the cure for cancer and invention of the wheel and fire far outweight his paltry 2 pages or so in MES on the limits to firm size.

I thought Friedman came out for freezing the monetary base and free banking? Hardly the crazy Rothbardian version of the gold standard.

What damage did Samuelson cause? He may have been wrong but he is far from idiotic. Samuelson is probably the greatest economist - maybe tied with Friedman - of the past 50 years or so.

[mainstream]

A wonderful discussion of samuelson (by a Professor familiar with his work and competent to judge it) can be found here:

http://eh.net/pipermail/hes/2007-September/008057.html

[risible]

I bow down before Dr. Heinrich's superior grasp of economics:

"Rather than explaining why this is a good book (other revierw's do that), I'll explain why some of the idiotic criticisms levied against this book are wrong.
The most silly criticism of Hazlitt (and other Austrian free-market economists) is that they aren't "scientific" and in short "don't use enough math". This is an absurd criticism. Firstly, human beings are not deterministic particles who's behaviour can be predicted by simple equations. Any attempt to reduce human behaviour to some mathematical equation is pure non-sense. We must consider human beings as individual entities who can choose, not fixed constants in mathematical formuli.

Secondly, there is a mathematics that is relevant to Austrians. It is chaos theory and network theory. Chaos theory is currently used to predict the weather. The calculus used by Keynes and other idiots like him is completely useless for describing the behaviour of chaotic systems where individual choice is involved. Hazlitt may not mention Chaos Theory. For that, see Murray N. Rothbard, "Choas Theory: Destroying Mathematics from Within?"; and Gene Callahan, "Why Austrians Should Care About Network Science". Anyone with any sympathy for Keynes and his idiotic followers should note that Keynes put forth a "treatise" before General Theory, which was demolished by Hayek. Hayek then made a strategical mistake in not demolishing General Theory, feeling that the book's idiocy stood for itself. Also note that while Hayek recieved a Nobel Prize for work which was basically an extension of Mises business cycle theory (Mises died the year before Hayek's Nobel), Keynes received no Nobel, showing that even the dimwits awarding that title realized Keynes work was inherently worthless.

The next criticism is related to the first: that Hazlitt doesn't discuss game theory. The reason for this is that game theory is particularly unworthy of discussion. Nash, founder of Game Theory, showed that in any finite game, there's an equilibrium in which no player can improve his or her outcome given the other player's strategies (the Nash Equilibrium). This is problematic in several ways. Firstly, there is absolutely no relation between the playing of games (which are less than net-zero, with one winner and one or more losers) and economics. Secondly, only Game Therorists behave in real situations in the ways in which Game Theory predicts. Thirdly, strategies are not data, but choices. Fourth, it is possible to break out of the specified game to achieve a superior result.

One particularly ignorant reviewer says that in a completely unhampered free market, monopolies form, destroying competition. This is non-sense. Empirically, Ancient Ireland was a completely Stateless society for a thousand years, with a completely unhampered free market, and no-such thing occured. And of course it is a bunch of non-sense that can't happen in reality anyeways. A monopoly is only harmful if you have monopoly prices. But in a completely free market, even if someone obtains 100% of all (say) rail-roads, there is still competition between that form of transportation and other forms, thus monopoly prices cannot be charged. The only time real monopolies with monopoly pricing have emerged is because of State interference.

This may not be the best book on economics that you can read (look to Mises' "Human Action" for what is most likely the strongest treatise on "economics" [actually praxeology, a much larger field]) ever written."

[mainstream]

That is the funniest thing I've read for ages. I guess the Mises Institute cannot be all that bad - they only give you a full pass on their Mises University exams for a diatribe like that rather than honors!

Ancient Ireland had an unhampered free market for 1000 years - this stuff is priceless!

[Curious]

Well, if Skousen said it it must be true then."

Look, so far you've provided little substance in the form of arguments. If you doubt Skousen's findings, contact him and ask for proof. No one is stopping you.

Mainstream, rather than trolling on the sidelines, how about you provide counter-arguments?

[David J. Heinrich]

mainstream,

See Pilon's study of the stateless society in Ancient Ireland. David Friedman also has work on the stateless society of Ancient Iceland (stateless for almost 295 years).

Re Samuelson, that he thought the USSR would overtake the US economically isn't some trivial insignificant error. As for the damage, diverting students of economics to propagandizing for inefficient and unethical systems is certainly a negative effect. The only references to Austrian thought in Samuelson's Economics text -- of which I have a copy -- gravely misrepresent AE, and are thus nothing more than strawmen and red herrings.

Perhaps you should start actually engaging in debate, rather than character-assasination.

[Max]

Skousen - Does Skousen have proof for all the other errors (often 1 per page - often more tha 1 per page) in his book on Chicago and Vienna?

Maybe the opportunity cost of my time is too high contact Skousen. (And every Austrian ought to be appalled by what Skousen did to FEE)

[Krypton]

On Soviet growth see:

http://www.springerlink.com/content/v5q061pw805m8h3l/

[Steven Horwitz]

As the SDAE secretary, let me make two quick comments about the program for this year:

1. The President-elect has the task of organizing the program and, historically, he or she has had sufficient discretion to put forward a set of panels that reflected his or her interests. In addition, the interests of the P-E may well encourage some people to offer sessions because they think the P-E would be especially interested in them. Without casting judgment, it's always been the case to some degree that the SDAE sessions have reflected the interests of the P-E. This year's panels, not surprisingly, have something of Joe's stamp on them. And that's no different from other president-elects.

2. The scheduling this year is awful. The SEAs are the M-W right before Thanksgiving. Through the diligent work of Randy Holcombe, our president, we were able to get some sessions on Sunday as well. But running up against the holiday caused a number of regular and more high-profile folks to be unable to attend. Thus the panels probably have more new names than in the past. That's not necessarily a bad thing, IMO, but it might explain the observations about the panels that folks have made.

I also think we may have a higher percentage of international panelists, as they are unaffected by the US holiday. That is a good thing, if true.

[Curious]

Max, the problem is I do not have the book with me right now to see if he gave a book as a citation. Your best bet is to send him an e-mail and ask. Is that really so time-consuming?

[Max]

What is his email?

I thought his book was an enjoyable read (a few years back), but riddled with errors of interpretation and fact.

But it was not intended as anything other than a popular into to Mises and Chicago I figure

[Michael Thomas]

Having just spent my time reading the comments here I am quite perplexed. The principals on this thread are all folks who I have met and for who I have enormous respect. Their record in the study of economics has permitted each of these scholars to indisputably claim to be seeking after truth. Each of the professors here have contributed to my understanding of economics directly and also have in many cases inspired close peers of mine to join the profession.

The book seems to be a wonderful tool for those of us interested to learn more about the history of familiar names and ideas which have become part of our lives. If someone takes objection at assertions about what the correct way to interpret these events should be -- all the better for the intellectual history. In a generation the methodological differences reflected here will make good history of thought. However, it seems that accusations and implications are something entirely different from the tools needed to study the underlying issues of economics.

From an Austrian perspective articulating useful models of the world advances understanding. All other uses of a highly specialized capital simply distort the achievement of this objective end.

As a naïve student, I hope to see all of the different specialties come together to cumulate in more than the sum of the parts. I would challenge other young scholars be bright enough to find some wisdom among each of our predecessors (wherever it might be found) and to have some room to accept each person's less than perfect attempts as a necessary part of what Hayek called "maximum generation of trials."

[Gil Guillory]

Wow, I'm a not just a libertarian kook, I'm a *noted* libertarian kook. *blush*

[Curious]

[email protected]

I agree with you that his book is not the most serious work of scholarship out there. Skousen is good when he writes within his domain of expertise. Otherwise he tends to muck things up a little (the section on methodology in his book is horribly confused.)

[Max]

I'll let you know his reply. Thanks

I think Huebert (a Mises Inst guy?) and David Gordon have Skousen marked accurately (albeit on different margins).

[Porgy Tirebiter]

"I am surprised by all the cheapshots against the Mises Institute (no institution does more to make known the works of Mises and those whom he influenced than this institution, and it would be a shame for it not to exist; Tom Palmer's "critiques" of it have time and time again been debunked for the vitriol they are.) What possible role do they serve? To further divide Austrianism? How utterly stupid."

Ahem. The home of HHH is telling others not to be divisive? Sorry, I have to go laugh until I puke.

[Curious]

Again, as I said, the cheapshots are tiring. Oh well.