Another book I wish I would have written

Tim Harford's The Logic of Life: The Rational Economics of an Irratinal World is as insightful as any book you will read this year.

My advice to young Austrian economists who want to write books and articles that matter is the same advice that was given to me, though I didn't always follow it, by Mancur Olson when I was a fresh faced economist.  "Pete," Olson said to me, "you have to stop telling other economist what to do.  Worry about the sins of omission by other economists, never about their sins of commission.  Focus instead on the omissions and turn them into your sins of comission to see if they are sins or not."  I am quoting from memory, but I believe that is the direct quote.  Similarly, Peter Berger once asked me, "If you have $1 million to do research what would you do?" I answered something about ethnography and economics.  He smiled and basically said "No you wouldn't.  Wouldn't you want to save economics?"  I replied that I thought both projects were interconnected.  Berger smiled and knowingly said to me "Economics is unsalvagable you know."  Then he proceeded to tell me fascinating stories of his interactions with economists on the topics of culture and religion.  Berger, if you don't know, is one of the most engaging scholars you could ever meet -- a complete joy to be around.  Perhaps only Kenneth Boulding (who was one of my teachers) could rival Berger for combining seriousness of purpose with sheer joy in the life of the mind and communicated with a great sense of humor.

Anyway, why do I write this?  As economists influenced by the Austrian school, we tend to find ourselves in the position of trying to stress points that others are ignoring in economic conversation.  But as Olson was trying to tell me, when we go into methodological debates or philosophical discourse (no matter how important these are) we do limit our audience and effectiveness.  We would do better by doing a serious study of methodolgy when we are starting out our careers to decide how we want to proceed in our work, but then getting on with our work as economists and political economists.  After we do some work, then we can critically reflect back again on our methodological perspective to see if it aided or inhibited useful work.

Harford's The Logic of Life is actually the sort of work that those schooled in Misesian and Hayekian economics can be, and should be writing.  Use economics to make sense of the world around us --- write in clear and entertaining prose.  Harford's model of rational choice is very Austrian (he doesn't call it that) -- but it is not the fiction of homo-economicus, or the lightening calculator of pleasure and pain, or the omniscient agent with perfect self-control.  Instead, as William Jaffe once wrote about Menger's man is the same as Harford's, he is "caught between alluring hopes and haunting fears."  He is, however, the pivotal chooser and as such the unit of analysis.

What Harford does in this book is walk through several of the main papers in economics written over the past few decades and provides the basic intuition that is behind the papers.  In the case of some of these papers, I think Harford's reasonable interpretation excuses the excesses of formalism that in those papers cloud the basic economic intuition rather than illuminate it.  In other instances, he captures not only the essence of the argument, but the reason the author approached the topic the way they did.  In all instances, he makes more plain language sense of the econoimc argument than the professional economists on which he is drawing.

In his earlier book, The Undercover Economist, Harford mainly addressed the world directly and made sense of it thorugh the economic way of thinking.  In his new book, he addresses the world around him and mediates between the world and the literature in economics, and improves our understanding of both in the process.

Rather than writing essays on why other economists don't get this or that point within the Austrian tradition, I wish I had written this book.  I should have listened to Mancur Olson so many years ago.  But as Berger recognized in me, there is something of a missionary zeal in me with regard to economics that Sennholz instilled so many years ago that I cannot shake even when it would have been in my rational self-interest to do so.  Like Menger's man, I too am caught between alluring hopes and haunting fears.  Maybe this year I can break out of the cycle.

Comments

[Mario Rizzo]

Perhaps I am wrong but it seems to me that all of the popular books that stress the economic rationality of various kinds of human behavior are, broadly speaking, microeconomics books. When it comes to macroeconomics, the popular literature and most of the scholarly literature emphasizes the collective irrationality of individual behavior -- for example, people lose confidence in the macro environment and then slow down their spending thus making matters worse, etc. What does this separation or dichotomy imply? We are rational in the small and irrational in the large? This is a first-class mess.

[Lawrence H. White]

Pete, it may be 16 days late, but that's an excellent New Year's resolution!

[dglesvic]

I'm so happy to see Larry White here, my greatest teacher and hero.

[Peter Boettke]

Larry,

I agree, and I am too thrilled to see you on the list. Best wishes for the New Year and for a speedy and full recovery.

Pete

[TGGP]

So, are you planning on writing a Harford-esque book that laymen who've never heard of the Austrian-school will enjoy?

[DPrychitko]

Pete:

If you have to stop telling other economists what to do, doesn't that mean you stop focusing/worrying about their sins of OMMISSION? And what you should do, perhaps, is worry about YOUR sins of ommission, work them up, and see if they've turned into sins of commission?

In other words, your quote of Berger confuses the heck out of me.

[Peter Boettke]

Good question Dave.

I don't want to be unreflective. Berger, I think, was just telling me to forget it, economists are going to change. Just do you own things. Olson, similarly, was not giving me a philosophical argument but a pragmatic position for professional advancement. Basically summed up as stop your preaching, who are you anyway you haven't done any economics yet, do some economic analysis and then we can talk.

BTW, right now we are getting our first real snow of the season --- winter solitude comes to Fairfax as well (just only a few times a season) as you know.

Pete

[Steven Horwitz]

"Real snow?" Feh. You don't what snow is in Fairfax. Horwitz knows snow. Prychitko really knows snow. And we both know cold. (Dave has lived in arguably the two snowiest cities east of the Mississippi!)

Pete, any place where the grocery stores are out of basics when they *forecast* an inch of snow knows not of "real" winter. ;)

[DPrychitko]

Steve: The "Feh" reminds me of the most unfunny funny line in Billy Crystal's Mr. Saturday Night. And yeh, you do know snow and I have livd in the two most snowiest cities east of the Mississippi. Of course, someone may very well claim it's even snowier in Tasmania. I don't know.