The Sheer Excitement of Learning from Others

When was the last time you stayed up through the night to finish a book in politics, philosophy or economics?*

This question should not be as strange as it may seem.  When I finally got turned on to economics, I really got turned on to it.  Reading Mises and Rothbard was for me a transformative experience when I was 18, 19, 20 years old, especially Rothbard.  This led me on a quest that took me back to Adam Smith and then through J B Say and Bastiat and through Mill and Ricardo and then to Menger and Bohm-Bawerk and finally back to Mises, Hayek, Rothbard, Kirzner and Lachmann.   By the time I was a senior in college, I had absorbed the writings available to me in Austrian economics and classical liberalism and radical libertarianism.  I took some time off after undergraduate school before heading to graduate school and I worked as a tennis pro, but I spent my lunch time at the pool reading Austrian works and for that time also a ton of Ayn Rand.

When I went to graduate school I threw myself completely into learning technical economic theory.  What I learned was that microeconomic theory was one big truth applied to everything, whereas macroeconomics was no truth applied to a discussion about a single application.  But I kept reading everything I could get my hands on in economics.  And outside of the Austrian and classical liberal tradition in political economy (where I would put Knight, Friedman, Buchanan, Coase, Demsetz, Alchian, North, Olson, Tullock, etc), I had certain fascinations with economic writers. Kenneth Boulding was one of the big ones.  Paul Davidson was another.  Warren Samuels was a particularly significant influence on me, both personally and in his writing. Leijonhufvud and Clower I found more interesting than Lucas and Sargent.  And as for contemporaries, I was awe-struck the first time I read Timur Kuran (on preference falsification), Avner Greif (on self-enforcing contracts), and Robert Leonard (on the intellectual history/context of early 20th century Vienna).

But there were two social scientists that I read in graduate school and then right after which really impressed me as thinkers that I would want to replicate in style (if not substance of argument) if I had the talent (which sadly I don't).  They were (are) Jon Elster and Albert Hirschman.  When I would run into Tyler or Dan at professional meetings as we started our careers, Tyler would normally ask "Who are you reading lately that you are learning from?"  It is a really great question.  For a time, I didn't have a good answer to Tyler's question because in all honesty I was reading edifying works, rather than works that challenged me and taught me.  But through Tyler's probing and my understanding of what he was asking me, I started to read.  Thomas Schelling should be on that list as well, but I didn't spend as much time with him.  I read two books of his and moved on.  But Elster and Hirschman became something of a fascination.  Elster's works such as Cement of Society and Nuts and Bolts reflected a style of reasoning that I would have hoped to master.  Of course, it all started with earlier works such as Ulysses and the Sirens and Sour Grapes.  Hirschman's A Propensity for Self-Subversion really excited me as did his earlier work Rivalry Views of Market Society and The Passions and the Interests.  And, of course, his Exit, Voice and Loyalty is a classic in modern economics and political economy.

I actually have a book in the back of my imagination that I would like to write dealing with "moral philosophers in the age of economics" which would discuss not only Hayek and Buchanan, but also Boulding, Hirschmann, Scitovsky, and Elster.  But that is for a different time.

Anyway, I was intrigued by Dani Rodrik's recent discussions of Hirschmann's contributions as a consequence of he having been awarded the Albert O. Hirschman Award by the Social Science Research Council.  Congratulations to Dani.

Anyway, reading Hirschmann challenged my presumptions, made me realize ways to construct arguments that were different from what I was comfortable doing, and made me think about issues from an alternative perspective.

If a mythical Tyler asked you that question "What have you been reading lately that you learned from?" what would be your answer?  I think it is important question to anyone who aspires to live a "life of the mind" because when you can no longer answer that question perhaps you are signaling that you are no longer aspiring to live that life.


*I just recently did this to finish reading Guido Huelsmann's Mises: The Last Knight of Liberalism (Mises Institute, 2007).  I read the book within 3 days of receiving it and found it very much worth spending the time with.  I do have quibbles here and there, as one would with any serious reading of a book, but overall it is an impressive achievement and I recommend it to all who are serious students of Austrian economics and the history of economic thought.

Comments

[Brian Pitt]

While I hope that I do not sound too much like an Austrian sychophant, I am reading "The Market Process" edited by Boettke and Prychitko; The Theory of Money and Credit by Ludwig von Mises; On the Logic of the Social Sciences by Juergen Habermas; and burnishing my mathematics skills.

Btw, I find the similarities - and differences - between Habermas, Hayek, and Mises to be fascinating! I read Storr and Prychitko (2007) "The Habermasian Challenge to ..."; are there any other works (i.e., writings that discuss the similaritaries/differences between Habermas and the Austrians) that any of you praxeological pundits can help me to learn from?

[matthew mueller]

This is a good topic. I too share Brian Pitt's enthusiasm for the possible (and much needed) connections Austrian economics has to many other developments taking place in the social sciences. To respond more directly to Pete Boettke's post, I suppose I would say that I learned a great deal from D. Wade Hands' book "Reflection without Rules". Introductory books like these are great because they are written for the purpose of introducing the reader to "what is out there." I can recall the feeling of excitement I had reading that book and mapping out the direction my future reading was to tkae.

There is so much happening today in the social sciences that one almost doesn't know where to begin. I recently finished some great books on historiography by Keith Jenkins and Hayden White. I will never look at "history" the same way again. But even areas such as literary theory, language, psychology, philosophy, and sociology have so much to offer us that I think we would be cheating ourselves if we continued to insist on the enduring relevance of Mises' a priorism.

All I can do at this time is mention names, but I am convinced that we stand to profit tremendously from studying seriously the work of Jacques Lacan, Gilles Deleuze, Jean Francois Lyotard, Judith Butler, Slavoj Zizek, Jean Baudrillard, Roland Barthes, Paul Ricoeur, Louis Althusser, and Jacques Derrida. These are contemporary thinkers who themselves have learned from people like Heidegger, Gadamer, Nietzsche, etc. And I think Austrians have erred in igoring these thinkers as well.

I think economics in general should shift their focus and attention to the work being done in these areas. Our misguided commitment to quantitative exactness will prove to be our own undoing if we continue to ignore the deep and rich intellectual heritage from which our science of economics originates. It is time to change course.

[Peter Boettke]

Brian and Matthew,

First, Don Lavoie was the individual who really pushed intellectual engagement with thinkers such as Habermas. But sadly most of his work on these and other issues related remained as unpublished working papers. So the best person to talk to about this is Virgil Storr.

Second, I believe, Matthew, that you can only make the claim about Misesian apriorism that way you do IF you read Mises is a certain way. I agree there is a reading of Mises that is very restrictive, but I also would argue that there is a way to read Mises that in fact opens up a window on these thinkers you mention that is not currently being explored. Perhaps Rod Long is, as since Lavoie, Rod Long is the one guy who understands the "Austrian school" type idea across disciplines to counter the "Frankfurt School" idea.

BTW, I think we can advocate interdisciplinary research without arguing that economics must shift its DISCIPLINARY focus. There is a technical science of economics, just as there is a pure logic of choice. The question is one of whether it is a necessary or sufficient component of an explanation of social order. I would contend while necessary, it is far from sufficient --- thus the interdisciplinary thrust and engagement. But I am an economist precisely because I think economic SCIENCE is fundamental to understanding social order, and I would argue that ALL efforts to understand social order without reference to economics fail miserably. Though I would also argue that an economists who only uses economics to explain social order is also missing essential elements. Thus, economics is necessary, but not sufficient as a tool for social understanding.

And finally, and this is more to Matthew than Brian --- if you look at Lavoie's work, or that of Virgil Storr, you will see that your list of thinkers were all part of Lavoie's reading list, including the literary theorist you mention (though I have to confess that I alway got a perverse joy from Camille Paglia's critique of some of these guys). So an entire generation of Austrian economists (for good or bad) read through these writers and have sprinkled commentary on them throughout their writings --- Lavoie, Prychitko, Horwitz, Chamlee-Wright, and Storr. I would encourage you to engage with them on these issues that are of interest to you.

Pete

[D.G. Lesvic]

No Cigar for Mechanism Design Theory

I am still waiting to learn from you, particularly about the Mechanism Design Theory of which there has been so much talk. After all of your discussions of it, I still don’t get it.

I gather that it was meant to rescue socialism from Ludwig von Mises’ devastating criticism of it, that it lacked the means of economic calculation, the calculation of profit and loss, success or failure. Mechanism Design Theory is to be the means by which socialism could overcome that difficulty, and operate as efficiently as the market, even without its data of economic calculation, market prices.

Your explanations of how that would work have failed, in my mind, at least, because they have not referred back to their points of departure from Mises.

What precisely was his mistake? You don’t tell us. You invoke mathematics without telling us why Mises was wrong in having excluded it from economics. You depart from him, but where and how?

Mises’ edifice rests upon a foundation. Yours is a castle in the air. Your foundation must be your point of departure from him. Without knowing what that is, we can’t criticize you. You can tell us how brilliant Mechanism Design Theory is, and we can’t tell you that it’s not. All we can say is that you haven’t shown us yet, and, until you do, it may get the Nobel Prize, and the accolades of the multitudes, but no cigar from any real economist.

[Peter Boettke]

Dear Mr. Lesvic,

First, as background, I have written 3 books on why Soviet and other forms of socialism have failed based on the writings of Ludwig von Mises. I also edited a 9 volume reference work on the debate over socialism that Mises's work started. And I just edited a 2 volume work entitled The Legacy of Ludwig von Mies. I am on this issue, as in so many other issues, a Misesian.

So to be clear, I don't think anybody has defeated Mises on this point. I just published a piece a little over a year ago entitled "Socialism: Still Impossible?" I am not sure where you are getting the impression that I think Mises was defeated. To admit that someone tried their hardest and did so in a rigorous manner to meet Mises's challenge is not the same thing as to say they met it.

Second, what I said in my WSJ piece was not that mechanism design theory has successfully answered Mises and Hayek, but that it was inspired by their work. Again, I don't know why people keep getting confused on this. It is (a) intellectually accurate --- they were explicitly inspired by Mises and Hayek, and (b) I ended my WSJ piece by stating that we must remember that there is only ONE mechanism design that solves the conditions of peace and prosperity and that is the private property order.

Finally, as to the practical pay off of mechanism design theory outside of the realm of the socialist calculation debate that inspired it. Here you would have to look at the way auctioning off of public assets (say the FCC) or the development of better trading system at the Chicago Mercantile Exchange, etc. This work is often referred to as "Economic Systems Design". You would also have to look at mechanism design theory in the internal organization of firms (e.g., the work that was done for years at Bell Labs on this headed by Roy Radner).

I personally don't work on the internal organization of firms, but others do in the managerial strategy field and I would say that work by guys like Paul Milgrom and John Roberts might be a good place to start.

In conclusion, I do hope that I have clarified to you that for my own work I am building on Mises in the same way that Israel Kirzner built from Mises. Mises is my foundation. So your last paragraph might be relevant to some, but not to the project that I am engaged in professionally. I hope there are opportunities for us to learn from one another, but I also hope that I have clarified to you so that we don't have to revisit this matter that my WSJ article did not say that mechanism design theory defeated Mises, only that it was inspired by Mises.

Pete

[Rafe]

Matthew, if you are going to take the Continental route you may end up with a strong program in cultural theory, like Jeffrey Alexander, however you need to ask all the time what have these guys have got to say to the field researchers in the "George Mason Program? This article shows how Alexander picked up from Talcott Parsons with his all-encompassing theory of society and economics, tried to get the basic epistemological assumptions right, and pressed on through a long and productive career, productive in publications anyway. http://catallaxyfiles.com/?p=3070

[Rafe]

It will interesting to find how much comes from Habermas, Gademer et al when the following tests are applied: What is new, what is true, what is helpful to field worker and policy makers? Habermas came up dreadfully short in some critical comments on Margaret Thatcher and Karl Popper - were these slips of the pen or the tip of an iceberg? http://catallaxyfiles.com/?p=2672

I take Pete's point that Mises needs to be read in the context of the appropriate intellectual tradition, the problem is to work out which one because there are elements from Kant, some from Aristotle (which Rothbard took on board to justify his take on praxeology) and another fascinating line on the "contents of thought" that ran from Brentano and Meinong then branched in a number of directions ranging from Husserl and Heidegger to Habermas and Popper.

Brentano’s key ideas were the intentionality of mental processes and the objects of thought. You can see how the idea of intentions came through in Austrian economics as purposeful thought, planning and action. In addition, thinking is about something and Brentano joined a tendency shared by some others like Bolzano and Frege to look at the contents of thought as things with more than fleeting existence, things that could be communicated to other people, something like objective or real contents of subjective thought processes.

Brentano (1838-1917) taught at the University of Vienna from 1874 to 1895. Among his students were Edmund Husserl, Alexius Meinong, Rudolf Steiner, Sigmund Freud and Anton Marty (who with his student Karl Bühler developed a detailed theory of language). Popper was a student of Buhler and so can be seen as a great grandchild of Brentano.

Meinong (1853-1920) sat in on some of Carl Menger’s lectures. He started in psychology but moved in a different direction when he picked up Brentano’s line of work on the contents of thought. He worked on the distinction between three aspects of a psychological phenomenon (1) the mental act, (2) its content and (3) its object. He wanted to establish a new philosophical discipline concerned with the theory of objects, a discipline which would not be reducible to the existing natural sciences but is empirical rather than metaphysical. For more on this line. http://catallaxyfiles.com/?p=2889

There is also a line of non-reductive thinking in psychology that peaked in Vienna with Karl Buhler who was also a founding (but forgotten) father of semiology. http://www.the-rathouse.com/K_and_C_Buhler.html

And for literary studies it is hard to beat Rene Wellek (another AustroHungarian) but he has been practically benched in the modern syllabus. http://www.the-rathouse.com/ReneWellek.html

[D.G. Lesvic]

Prof. Boettke,

Sorry for misinterpreting you, and thanks for the clarification.

Would we agree then, that, so far as Mechanism Design Theory applies to economics, it is wrong; and, so far as it is right, it is in a different field, Managerial Strategy, and, as such, irrelevant to economics?

[Peter Boettke]

Mr. Lesvic,

Not sure I would be willing to go that far, but I do have an appreciation for the position you are staking out. I think the emphasis on alternative rules and the impact they have on decisions by actors is a very important insight for understanding choices in politics, economics, business and life. To the extent that the _framework_ developed in mechanism design theory helps us "isolate" that relationship between rules of the game and the benefits/costs of different decisions, then mechanism design theory has been helpful in economics. But the point I am stressing does not require higher maths, nor does it even represent the main point emphasized by this years Nobel Prize. Instead, it could be seen in the work of earlier Nobel winners such as Buchanan, Coase, and North. And of course Hayek --- though Hayek pushes the argument in a epistemic/cognitive direction as opposed to the more incentive/strategic direction of the others.

However, the bottom line is that I would be uncomfortable making the sort of categorical rejection of mechanism design theory that you seem willing to make. I do think there is something to learn from studying this literature, even if it is not what the researchers in the field thought you would learn when they started.

Pete

[D.G. Lesvic]

Professor Boettke,

There are no alternative rules and choices in economics. There are alternatives and choices in life. Economics is the science of them, or, at least, some of them. But the choices are in life, not in the science. The laws of economics are not of our choosing, but given to us. It is for us to discover them, not choose among them.

If "managerial strategy" is a part of economics, and every managerial strategist an economist, who isn't?

Isn't economics something special, apart from Home Economics, and Business or Bureaucratic Management?

Is Bill Gates an economist, Sam Walton, Martha Stewart? And how about Ma Kettle in her kitchen, figuring out a better way to bake a cake? Is she an economist, too, like Adam Smith?

Every homeless bum on the streets, trying to figure out how to survive, is a managerial strategist. Is he an economist, too, like Adam Smith?

If a Nobel Prize in economics to somebody who has figured out a better way to conduct auctions, why not to every other innovator and pioneer in business and managerial processes? The woods are full of them. If they're all economists, then Bill Gates and Sam Walton must be the greatest economists of our time.

Even if managerial strategy were a legitimate part of economics, wouldn't it be a relatively minor part, and a distraction from the major parts of it?

So the ultimate question here really is the agenda and priorities for economists.

What issues should come first?

[matthew mueller]

Dr. Boettke,

I wasn't aware that there is a correct way to read Mises (or that some ways are in fact better than others). When carried forward, we can see that, in the words of Keith Jenkins, "the consumption of a text takes place in contexts that do not repeat themselves. Quite literally no two readings are the same." We cannot claim that Mises' message conveys exactly the same meaning and information across time and in different contexts. The consumption of a text, apart from the creation of it, is an interpersonal phenomenon. This is important because there are limitations on one's ability to exhaustively and unambiguously convey "meaning". "Authors cannot force their intentions/interpretations on the reader ... [and] readers cannot fully fathom everything the authors intend." Mises' message depends on the context in which it is read. There is a reason why people in Eastern Europe respond more favorably to the writings of Hayek and Mises than people here in the United States. Another argument I would make is that no one interpretation can claim superiority over other alternative interpretations/readings. The success of this attempt would of course depend on criteria the proponent of the interpretaiton considers relevant and viable. The world of ideas is inescapably interpretive.

And I do believe that certain technical aspects of modern economics are necessary for an adequate appreciation of its usefulness in understanding the social world. But it is not sufficient. This is all well and good. But we have to ask ourselves if it is at all possible that by carving out a role for these technical considerations other important aspects of social phenomena get left out. Our ability to observe the real world is limited. This requires what Friedrich von Wieser called "isolating assumptions". But, again, to repeat, is it possible that concern for some features of the social world, which are made intelligible to us in the form of "isolating assumptions", necessarily preclude our awareness of other fundamental aspects of social phenomena? Observation is always selective and discriminatory. How can we ever be sure that we are making the observations we would like to rather than failing to realize them because we are deceptively captured by others? Our (I would argue nearly exclusive) concern with technical economic theory has prevented us from recognizing the importance of some of the other work being done in the social sciences.

[Peter Boettke]

Mr. Lesvic,

In the language of modern economics, to use the term "rules of the game" is not the same thing as to refer to the laws of economics. In fact, it is the laws of economics that enable the theorist to be able to engage in a systematic analysis of how alternative rules of the game and their enforcement will impact economic outcomes.

Anyway, I think we are talking pass one another because of our inability to agree to a common language and shared understanding of technical terminology.

To Matthew ---

Not all readings are equally valid --- that is the difference between disconstructionism and traditional hermeneutics. I am more on the side of traditional hermeneutics. And that doesn't deny in the least that the world of ideas is inescapably interpretive.

Nothing that I said implies that we shouldn't be doing social science broadly conceived, as well as humanities, etc. I just said that there is a technical science of economics that must be pursued and continually developed as well. I am all for interdisciplinary work and encourage it the best that I can --- see the description of the books series that I edit with Edward Elgar, and also with University of Michigan. Both are interdisciplinary series that are in place to encourage scholars to cross disciplinary boundaries.

However, I do think a better term might be multi disciplinary because interdisciplinary social science often lacks a standard by which to access arguments. We need to meet very high scholarly standards if we want to make progress. So I say, if you are going to write history, write history so historians will be impressed; if you are going to write philosophy, write philosophy so that philosophers will be impressed; and if you are going to write economics, write economics in a way that economists will be impressed. You don't want to fall between cracks in the intellectual world.

Pete

[D.G. Lesvic]

Professor Boettke,

As you agreed, mechanism design theory didn't help us understand the rules of the economic calculation game, but only of the managerial strategy game.

The question remains: is that part of the economics game?

There are rules of the game in baking a cake, too, rules of home economics.

But that doesn't make them rules of economics too, does it?

And the ultimate question still remains:

What are your priorities in economics, the greatest issue or issues before us?

[Peter Boettke]

Mr. Lesvic,

You are not using the term rules of the game in the same way that I am. There are laws of economics derived from the logic of human action. These laws are immutable and exist across time and across cultures. Demand curves, in other words, slope downward. Man acts purposively to better his condition. However, the way in which the logic of human action is played out in reality is a function of the institutional context --- i.e., the rules of the game and their enforcement. Rules of the game, in other words, are NOT scientific laws, but instead in part the man-made laws of courts, legislatures and police (the other part of rules is social convention and mores).

Baking a cake is an example of a recipe, not "rules". But baking a cake under statist control of bakeries, or under a free market system of bakeries will predictably impact the incentives and information utilitzed in baking and improving recipes over time. Man-made laws against "trans-fats" will impact the way cakes are made, man-made laws against profits will impact the way people choose to produce and sell cakes, etc., etc. How do we know the impact? The scientific laws of economics.

I hope that makes the point clearer.

In Menger and Bohm-Bawerk the split between pure theory (the exact science of economics), applied theory (pure theory within context of different rules of the game), and economic history and political economy (the art and application of economics to understand the world) is what makes up economics. I would argue that Mises is working in that same tradition. Pure theory is a necessary, but not sufficient component to social understanding.

So what are the priorities for the discipline of economics:

1. Explicate the workings of the voluntary order through the logic of human action and an understanding of social cooperation under the division of labor;

2. Explain why government intervention fails to promote social order, but instead leads inevitably to social conflict;

3. Stretch the economic way of thinking as far into the public mind as possible by first making sure that the science of economics is being conducted correctly and that advances in the science are continually being made, and then communicating down the intellectual structure of production in society.

At least that is what I would see as the issues of priority if I understand your question correctly. In my world, which I understand is not the same as yours, competing successfully in the academic marketplace of ideas is vital to the success of the broader project of advancing a public understanding of the economic way of thinking.

Pete

[Adam]

Another equally important question, I think, is "what have you written about lately that you learned from?"

Writing is one of the best ways to learn, especially if it's about what you're reading.

[Peter Boettke]

Adam,

Excellent point.

I have always enjoyed writing professional book reviews precisely for that reason ... it forces me to think about what I am learning from what I am reading.

My colleague Richard Wagner often says something to the effect that "Thinking without writing is little more than daydreaming." And Buchanan always stressed to us (his students) that "Writing is research."

Anyway, excellent point about writing and learning.

Pete

[Josh]

I have been reading a lot of my professor's work. He does not agree with Austrian theory, but I can't help but think that his views of the evolutionary theory of the firm actually fit into the Austrian framework.

[matthew mueller]

Writing certainly is an essential component to learning, especially in academia, but let's not get carried away. I have a friend who always says, quoting Sir Thomas Browne, "I'd rather read than write anyday." And while it is a pleasure to listen to him speak, because he is so well-read, his written prose is awkward and forced.

Writing takes too much time. I spent three days writing a research paper for school, only to fall behind in my reading.

What I have noticed is that those who spend lots of time writing are usually specialists in some field or area. Seldom do you see a generalist spend their days writing. Isaiah Berlin gave an apt description of two kinds of thinkers. He says intellectuals are either hedgehogs or foxes. While a hedgehog picks a spot and digs as deep as he can into the ground (a specialist conducting research) a fox is always hopping about to new areas, never staying in one spot more than a couple of minutes.

And I don't think that you have to be a hedgehog to be regarded as a serious thinker. Generalists' are so much more fun to learn from. The specialist is often haughty, impatient and mean-spirited.

[D.G. Lesvic]

Prof. Boettke,

You are absolutely right about the difference between recipes and rules. I stand corrected, and with thanks.

But, still, what is the difference between economics and non-economics? If the definition of it were strictly logical, the most economical way of baking a cake would be economics, and Ma Kettle not just a Home Economist, but a full-fledged economist, like Adam Smith

To the extent that the definition is not logical, it is customary, and, while customs change, there is one constant. Economics is what we fight about. That too can change. But, at the moment, I don't see any big fight over the rules of the game for auctioneers. And, if they are a part of economics, they are peripheral and not central to it, and a distraction from its core.

The Wall Street Journal recently described income inequality as the biggest domestic campaign issue in Japan. Could you imagine auctions being the biggest issue in Japan or anywhere, and blood running in the streets over it?

Income inequality was the biggest issue, not just to the Wall Street Journal, but to both Hayek and Mises, as well, and, as you might have guessed, to myself.

But your vaunted academic marketplace of ideas will not touch it with a ten-foot pole. And, if we wait for advancements in our thinking about it to be communicated from top down, as you would have it, we'll have a long wait.

As you might expect from the author of Intellectually Incorrect, The Amateur Science of Economics, and the Professional War Against It, they will come, as advancements in economics have always come, and only could, not from top down but bottom up, not from academic insiders but outsiders, like Mises himself, and to a lesser extent, Hayek, who, when he went to Chicago, I would remind you, it was not to the Department of Economics.

[Peter Boettke]

Dear Mr. Lesvic,

I don't disagree with you about the "big issues" we fight about. See my list of priorities.

However, I do think you are underestimating how successful Mises was as a professional economist -- both in Vienna and in the US, let alone his position in Geneva. Mises was an outsider no doubt, but he was not a complete outsider. Keep in mind that Human Action was published by Yale University Press and was reviewed (albeit negatively) in the New York Times. Mises was awarded the American Economic Association Distinguished Fellow Award.

And his students taught in economics at Princeton, and Harvard, and the LSE and NYU, and in broader social theory at Chicago and the New School.

And remember that Henry Hazlitt (who I would think would be a more important role model for you than even Mises) while self-educated, etc. nevertheless wrote for the New York Times and also Newsweek. Hazlitt was an establishment intellectual who held unconventional views, just as Mises was a leading scientific economist who held unconventional views. So I think it is historically inaccurate to push the story you want to push.

No doubt they were out of line with the intellectual current of their times, but they were not completely outside of the entire process.

Pete

[D.G. Lesvic]

Professor Boettke,

I had the pleasure of quite a lengthy correspondence with Henry Hazlitt. He was one of that noble band of individuals, outside of the economics profession, that supported Mises.

The profession itself would have let him starve to death. And for good reason. He had little use for it too. And that's really why Hayek, who knew when to compromise, was much the favorite of the professionals.

Where can I find this list of your priorities?

And will I find redistribution (or, if you prefer, distribution) on it?

By the way, my son commented that you seem like a nice guy. I agree and thank you for that.

[Rafe]

Pete, on the topic of priorities, you somewhere cited two lists of seven or eight big unsolved problems in economics, the two sources are not accessible to me, can you possibly list them here? Has there been any progress since you mentioned them last time. And would you like to change the list?

[Ludwig]

I have done some further thinking after the discussions we had on the Nobel Prize etc... To the critic Mr Lesvic above: mechanism design is part of economics. Note for instance that a typical Austrian business cycle is a case of incentive incompatibility. And the mechanism to solve that is changing the rules, e.g. installing a 100% percent reserve requirement in banking. So in primitive form we find mechanism design theory in Mises and Hayek...

[D.G. Lesvic]

To Ludwig:

If mechanims design theory is simply a new term for economics, what was wrong with the old one?

[Ludwig]

I did not say that it is a new term for economics, no more so than that I said that number theory is a new term for mathematics. But it is a legitimate and important part of economics. Try to read and understand Donald E. Campbell´s (2006)_Incentives - Motivation and the Economics of Information_.(CUP second edition) The use of mathematics has certainly led to more rigorous economics; not the least doubt about that. But that does not mean that those parts of economics that are not yet mathematized are bad economics.
Austrian business cycle theory is a good example.
The guy who can mathematize it deserves a Nobel Prize...-:)

[Ludwig]

You are right that those mechanism design theorists, information economists etc. do not address the calculational issues that Mises was highlighting, but as far as I know they do not claim to do so... Economic calculation is one aspect, incentives another...

[D.G. Lesvic]

Mathematics is the science of constant relations between magnitudes. Where are there any such relations in the field of human action?

All of this talk of non-quantitative mathematics is simply of the formulas for mathematics. The fact that the formula for determining the circumference of a circle is expressed in xs and ys rather than specific numbers doesn't change the fact that they have no other purpose than the determination of specific numbers, which are irrelevant to economics.

[Ludwig]

It is true that mathematics is a language that uses numbers (or numerical variables), but it is not because a model uses numbers (or numerical variables) that it is ABOUT numbers. Bringing in the machinery of mathematics may still allow you to draw conclusions that are qualitatively correct even if the mathematical language brings with it a slight loss of realism...

[Ludwig]

In fact propositions involving numbers will only be strictly true _within_ the model. Whether the model itself is true of the real world is indeed an approximative matter. But a model is still much better than no model at all. Also within the model one can exactly distinguish between operations which are deductive and operations which are not, a thing which a Misesian cannot.

[D.G. Lesvic]

It seems to me that all you want to do is translate economics from English into the foreign language of mathematics.

Why not Greek or Latin, as in the Church?

That would mystify people just as well.

[Ludwig]

Just not... Mathematics is a foreign language only to the uneducated...

[D.G. Lesvic]

Ludwig:

You win.

Are you happy?

[Ludwig]

I am not particularly happy because of this. But I do not understand quite well the aversion for mathematics of many Austrians. I guess the real reason why they do not use it, is that they don´t like it or cannot handle it...

[D.G. Lesvic]

Ludwig,

I'm sorry, but I don't how else to make you happy.

[irchans]

Ludwig, Lesvic,
Hi,

I didn't sleep much last night, so forgive my lack of precision and sense, but I want to stimulate a bit more discussion on the current topic, so rather than waiting until I am cognizant, I will post some thoughts now in the hope of cleaning them up in later posts.

I'm a mathematician with an interest in economics and philosophy. Because of my graduate school training, I am often wary of arguments that do not use math. Even before graduate school, I had lots of trouble reading The Wealth of Nations, but I do like to talk and sometimes read philosophy despite the fact that I have trouble following non-mathematical arguments.

My question is, "What kinds of thinking processes do we use to make sense of the world in our daily lives?" I use statistics a lot to make decisions, but most people do not. I think we use analogy all the time and intuition (which I think models statistics in a way similar to artificial neural nets). Neither intuition nor analogy are accepted by mathematical journals as being solid arguments for mathematics. (For thinking outside of the sciences, I think mathematics is much less useful as compared to other types of argument.)

Mathematical journals and books pretty much only use deductive logic. Experiments and the scientific method are not really used much in mathematics except as a means to inspire a mathematical proof.

Well, I am rambling as sleepy people often do. I will check back here tomorrow and maybe post something clearer.

irchans

[D.G. Lesvic]

Ludwig,

You better get a little more sleep.

[D.G. Lesvic]

Oh, I'm sorry, that wasn't Ludwig. That was irchans.

That's great. Now I've got two looneys on my hands. Fellows, I don't know what I can do for you. I'm not a psychologist. I don't know how to make Ludwig happy or get irchans more sleep.

Why don't you try Dr. Phil.

[Ludwig]

Irchans:
Do you know the work of G. Polya (see his Mathematics and Plausible Reasoning, Vols. I-II)?
He shows that even mathematics is much less "deductive" than many people think, that it uses induction and analogy etc. Why then should we believe, on Mises´ authority, that Austrian economics is a deductive science? I believe that Mises was really a great economist but I gradually became convinced that some of his methodological claims really constitute the weak link in his system.
Moreover, he is misinterpreted, especially by Rothbardians. Mises criticized certain specific uses of mathematics but he would have had no problem, in my opinion, with the use of, say, topological concepts in equilibrium theory. Much of the work of Debreu, Arrow etc. would have been acceptable to him, provided it is correctly interpreted. He says it almost literally when he recommends the method of imaginary constructions. That an imaginary construction is contradictory, irrealistic etc., all that is no problem. The only criterion is really that it adds something to our insight...

[dglesvic]

Irchans,

If somebody tells you that there are left-handed monkey wrenches, let him go fetch them and bring them back to you. Don't waste your own time chasing after them.

[irchans]

Ludwig, Lesvic,

Thank you for your responses. I've caught up on my sleep, now I am just lacking time. Maybe I can post something interesting later today.