Reading Human Action; Reading Man, Economy and State

In a recent series of blog posts, Joe Salerno has insisted that for truth of advertising I reveal that GMU's PhD program in econoimcs is not a pure Austrian economics program.  OK.  GMU's economics department is not a pure Austrian economics program.  In fact, my colleagues would be quite disturbed by the suggestion that we a "pure Austrian program".  I certainly hope that I have never suggested that our program offered a "pure" Austrian program, but instead only one that did not discourage students who had an interest in Austrian economics -- whether of the praxeological or spontaneous order variants.

GMU's economics department has a particular strength in Austrian economics, but also strengths in history of economic thought, public choice and constitutional political economy, law and economics, economic history and institutional analysis, experimental economics and the modeling of complex adaptive systems.  We are among the best places in the world to study these areas of economics, we are not as strong in fields like money and macro (that might change soon, and my fingers are crossed hoping that to be true).

The program reflects the research interests and approach of its patron saint F. A. Hayek, the man who put the program on the map James Buchanan, and the man who re-established the program in the 2000s Vernon Smith.  Three Nobel Prize winners in the discipline.  And the influence of Gordon Tullock throughout the program is undeniable.  But the program is continually evolving.

So Joe is right, the program is  not a "pure Austrian program".  But then again neither was the University of Vienna when Mises got his degree, or Hayek got his, nor NYU when Kirzner got his degree, nor Rutgers when Joe got his degree.

But at GMU, we offer an undergraduate course in Austrian economics, and two PhD courses in the Austrian Theory of the Market Process.  We have a weekly seminar that brings in visitors and we have a weekly graduate student paper workshop.  Finally, we often have reading groups that explore Austrian works.  In addition, we offer classes in the history of thought, development, comparative systems, public policy and political economy, and constitutional political economy where Austrian works by Mises, Hayek, Rothbard, etc. are actually taught.  This term Pete Leeson assigned Rothbard's Ethics of Liberty in one of his classes, and I assigned Mises's Liberalism and Hayek's Constitution of Liberty in my class.

So here is my question back to Joe: can you tell me other PhD programs that combine a conventional education in economics with the opportunity for students to formally study Mises's Human Action, and Rothbard's Man, Economy and State?  If not that many examples where this is the case, then can we not stop the back and forth and devote ourselves to our primary task --- teaching economics and doing research in the field of economics that advances praxeology and the exchange paradigm.

Comments

[Nick]

Peter. I have been under the impression that G.M.U. is one of the grad schools that does not offer a conventional education in economics, by year 2009 standards.

Almost every other graduate program I've looked at starts it off with a first-year course in which students are required to do the problems of the text "Microeconomic Theory" by Andreu Mas-Colell, Michael Winston, and Jerry Green, or an equivalent current text.

At G.M.U., I had a glance at a past syllabus for their corresponding course
http://economics.gmu.edu/wew/syllabi/811Fall08.htm
And it is material that, while not labeled "Austrian" or "non-mainstream", is older, much less mathematical, and could have been on a syllabus taught decades ago.

If G.M.U. teaches a "conventional education in economics", it should perhaps be made clear that this is not the same conventional education in economics that one gets at other graduate schools.

The G.M.U. student is starting off with a different curriculum, and at a different mathematical level compared to his competition at other grad schools. By choosing to be at G.M.U., you are paying the price of not doing the same basic foundations as other grad students. Please correct me if I am wrong in any of this.

[Jason Briggeman]

Nick, GMU has separate required courses in Micro and in Math Econ. Math Econ is more along the lines of the courses you describe at other schools. Here's the syllabus from the 2005 version of the course: http://mason.gmu.edu/~liannacc/e630web/E630%20Syllabus%20-%20Iannaccone%20-%20F2005.pdf

[Adam]

Pete only talks about the de jure side. The de facto is equally--if not more--important. Pace Wagner, graduate school is much more about student-teacher collaboration than classroom transmittal via lecture. So you have to look at what originates from the students, too, to see how Austrian a program is.

For graduate students coursework is simply a prelude to doing your own work, which means writing. The most important thing left off everyone's list is the dissertation. At GMU you can write a thoroughly Austrian dissertation. You can also take working papers to paper workshops or professors, neither of which would even think about telling you to remove distinctively Austrian content.

GMU actively facilitates and encourages graduate student production of Austrian research. Next to that, every other point--on both sides of the debate--is a footnote.

[Peter Twieg]

GMU's Math Econ course really isn't up to the level of what other schools expect of their students, and in general from my experiences the classes do expect a lower level of mathematical literacy than what you'd find at a "conventional" school - trying to gloss over this point, I think, will only frustrate students who come to GMU expecting something more. Nor would I dismiss the importance of not employing more rigorous math as "a footnote", because the literatures of many subfields which ARE taught at GMU are sometimes inaccessible to students who have only the math/econometrics background which is required at GMU. This probably doesn't apply so much to the Austrians - which isn't to malign them, but given the premise of the post that GMU only isn't for producing Austrian economists, it's not very helpful to say that not knowing the calculus of variations isn't important to people doing Austrian research.

So the level of literacy required is somewhat above what Nick describes, but not very much so and many of the students simply manage to "survive" the more-mathematical courses and then avoid these tools in the future. I don't have a strong opinion on how things ought to be, but I think Nick's essential point is correct.

[Nathanael Snow]

You failed to mention that Rustici has over 500 intro students a year reading Menger's Principles.

[liberty]

I will say that I warned by someone in the know, and who is a mathematically inclined professor but also very favorably inclined to the GMU econ dept., that if I want to go in a direction more mathematically oriented, that I should take my 1st year micro and macro courses at U of MD.

This is to say: one can appreciate the Mason PhD program and simultaneously admit that the first year courses are not as mathematically rigorous as conventional programs, and that this may pose some issues for some students, depending upon their future orientation.

[Markos]

Peter Twieg,

I don't see any particular advantage of PhD programs that instead economic theory teach students third-rate mathematics. Greatest minds in economic science never thought mathematics was of any importance in economic theory. Hayek, Mises, Buchanan, Coase, Demsetz, Knight... I think Coase said once that "mathematics serves to proof that water flows downhill", or something like that. I think he was right. If economic students from GMU cannot read AER, so worse for AER (almost nobody, except couple of dozen freaks from Ivy League universities doesn't read that third-rate mathematical garbage anyway).

Sure, all of this assumes that primary or only goal of PhD candidate is not to "succeed in profession" or to have high profile career on Harvard or Yale, but to offer something sensible in economic theory. If career and "success" are primary concerns than you are right. But, if the real contribution is concern, than you have to bear in mind that greatest minds of economic thought didn't care for mathematics, and wrote their stuff in prose. If modern PhD students has nothing to offer in economics, high mathematical skills wouldn't help him.

[TGGP]

Markos, I believe Coase stated that although he did not use much mathematics himself it was still useful for economics.

I'm also guessing that a lot more people read AER than you claim. Perhaps they should be reading something more worthwhile, but that's another story.

[Peter Boettke]

Look Nick and Peter --- through the collect consortium students at GMU can take courses at UMD, and through other departments students can follow a more mathematical track with Rob Axtel and others.

As I have said all along, GMU offers students who have a strong aptitude to do mathematical research those avenues, a large majority of students in our program due rather standard econometric analysis for their dissertations, and some of our students due very philosophical dissertations.

At most PhD programs students of the philosophical bent would be weeded out. So our difference is that we offer this option where others don't. Because of that the people that come to our program with this interest tend to be VERY talented in that direction and thus best of the best of them doing very well in the academic market.

Anyway, our recent graduates placements are the best testimony to the programs ability to train students. Lets say since 2000. Students who want to comment on the state of education at GMU should research the placements of GMU PhDs, their output as scholars, and then compare them with alternative programs they are considering for their own education. Then make a judgement for themselves.

Pete

[Peter Boettke]

should read "college consortium".

[Peter Boettke]

Markos,

What if (just consider) contribution was correlated (even loosely) with higher profile publications and higher status appointments? Just consider that for a moment.

As I wrote in response to Walter Block in another thread. When Mises was working he was known by every serious economist of note. Nobody who was anybody did not know who Mises was. Same for Hayek. You cannot say that about many within the Austrian camp today, and the profession has gotten more accepting of the arguments today than it was then. This is our failiing, not the professions.

You have to be able to read mathemtical articles and understanding statistics to be part of the economic conversation today, even if you want to pull the discussion in a different direction. View it as a language barrier --- if everyone is speaking English, if you don't learn English and instead continue to speak and write only in German, then don't be surprised if people don't give your work the wide readership you would hope for. So what happens? Guys like Mises and Hayek learned to write in English.

Now there are legitimate argument against excessive mathematics in economics, and problems of statistical inference. But you have to understand enough math and stats to be able to make those criticisms rather than just repeat what others have said. I happen to agree with Mises and Hayek, but I also realize that my job entails brining the ideas of Mises and Hayek into a different intellectual context of today's economics.

[Markos]

My previous comment was deleted so I'll try to reapeate what I wrote already. Pete gave me additional incentive in his response.

So, my simple and, I hope uncontroversial, thesis is that many of the greatest minds in economics of XX century considered mathematics as completely useless - Mises, Hayek, Buchanan, Knight, Coase. I don't know who exactly wrote sentence about water and mathematics, maybe it wasn't Coase, but Knight. Mises explicitly considered mathematics useless in economic theory. In one paper he wrote that you must be able to formulate theory in words before you put it in formulas, and then what is point of formulas? Hayek confined great deal of his career to fighting against "scientism" and "positivism", i.e. attempts to apply mathematical methods of physics in economic theory. He went in some sense even further than Mises, by saying that using mathematical aaporoach is dangerous, not only useless, because by practising it we believe we can know more than we actually do. See Counter-revolution of Science or his Nobel addreess. Why today it would be any different? Only because today in order to publish in AER you must write down a buch of idiotic formulas to cover emptiness of your thoughts (remember confession of Nobel prize-winning economists Krugman that he only mathematically expressed some pretty trivial and long time known facts, but that was the only way to publish article in leading journals. Are you suggesting that Krugman's mathematical expressing of obvious truths was real contribution to science, beyond what already was contained in those truths)? That argument reminds me on similar "arguments" of IPCC consensus science. We have here "Ivy League third-rate mathematical Keynsian-Fredmanite positivist consensus"

So Pete I don't understand what is your point? "I happen to agree with Mises and Hayek, but I also realize that my job entails brining the ideas of Mises and Hayek into a different intellectual context of today's economics." In other words "I agree with them, but, you know I also agree with the opposite." What it's mean to "bring MH ideas into different context"? Maybe, some Krugmannite operation of mathematical translating of meaning, because "proffesion" is so stupid and unable to understand what Mises had to say in his simple English prose in Human Action? If you don't agree with Mises' and Hayek's ideas about mathematics you should say so. You cannot at the same time agree and disagree with the same very basic and notorious propositions. I cannnot understand why you feel obliged to express agrement with Mises and Hayek when it is obvious that you, at this partucalr point, completely disagree?

[TGGP]

Here is what Coase said in his Nobel Prize lecture:
"My remarks have sometimes been interpreted as implying that I am hostile to the mathematization of economic theory. This is untrue. Indeed, once we begin to uncover the real factors affecting the performance of the economic system, the complicated interrelations between them will clearly necessitate a mathematical treatment, as in the natural sciences, and economists like myself, who write in prose, will take their bow. May this period soon come."

Maybe, some Krugmannite operation of mathematical translating of meaning, because "proffesion" is so stupid and unable to understand what Mises had to say in his simple English prose in Human Action?
Without all the vitriol, that did seem to be something like what he was saying, with the additional point that he wants to criticize math and in order to do so has to know path.

For my own part, I think Roger Garrison's explanation of the Keynesian (which originally was explained without any diagrams) vs Hayekian macroeconomic view with PowerPoint was much more effective than it would have been in just prose.

[Rafael Roos Guthmann]

I think that it should be noted that about 70-80 years ago, when Mises criticized mathematical economics, the kind of math used these days was much more quantitative than today. Today mathematical economics is axiomatic, it uses algebra and calculus with much less intensity than those days. I think that he would like the Mas-Collel textbook more than the mathematical economists of his time.

However, the Austrian critique of mathematical economics is still the same: Math can only treat successfully states of equilibrium, process is treated by mathematical economists with ad hoc assumptions.

[Rafael Roos Guthmann]

Coase said:
"Indeed, once we begin to uncover the real factors affecting the performance of the economic system, the complicated interrelations between them will clearly necessitate a mathematical treatment, as in the natural sciences, and economists like myself, who write in prose, will take their bow."

This argument is based on the idea that with math you can state a problem, disassemble it and then solve it by parts. This technique would enable the theorist to solve more complex problems. However, with verbal logic you can do the same too, separate the elements of a concept and work on each element, in fact, Austrian economists since Menger have done that.

I think that a much more robust argument for mathematical economics is that it enables clear communication between economists. In fact, while there is still debate on the correct interpretation of Keynes's GT, there isn't any debate on the real meaning of Debreu's Theory of Value.

[Markos]

"I think that a much more robust argument for mathematical economics is that it enables clear communication between economists.In fact, while there is still debate on the correct interpretation of Keynes's GT, there isn't any debate on the real meaning of Debreu's Theory of Value."

I would be happy to see economists understand each other, but it is still more important that what they are saying makes any sense. And that wouldn't be garaniteed by math, anything more than by using simple prose.Do you really think that anyone has doubt about real meaning of Demsetz's theory of property rights or agency theory of firm, or Coase's concept of voluntary internalization of externalities or Mises's theorem of impossibility of economic calculation under socialism, because none of these theories were not formulated mathematically? And that their mathematical formalization would add anything to knowledge we are able to extract from them right now, without mathematics? And that real problem with Keynes's GT is that it wasn't formulated mathematically? Obviosly, many other theories also are not, but we have no problem to understand them.

[Zac]

The biggest problem with GMU's graduate economics program isn't the quality of the mathematical training. If students are self-disciplined (they are PhD students after all) and so inclined, they can work through MWG (and other texts) themselves, maybe using MIT's OpenCourseWare as a study guide. And if they need some help understanding concepts, remember that GMU's professors received their graduate educations by and large at schools like Harvard, Chicago, and Princeton - they are not innumerate.

No, the biggest problem with GMU's graduate program is that they cannot fund students. This year, it seems, things were particularly bad - the department itself funded zero new students (although Mercatus had a limited number of fellowships). Many years in the past, things are just bad. Top programs fund nearly all their graduate students, which are essentially a consumption good for professors (Harvard median tuition remission: 83%; Ohio State: 83%; GMU: 67% source: Survey of Earned Doctorates 2000-2004; NYU historically funds 100% of their PhD students).

Let's hope that changes in future years. Excessively low tuition remission is no way to build a successful program. George Mason professors invest a great deal in their students, the department should do the same.

[Anxious]

Are there any "distance" economics programs/courses available at GMU?

Or does a student have to physically attend on campus?

[Peter Boettke]

Zac and others,

You are 100% right. GMU unfortunately doesn't fund the students in the program at "best practice" rate found in the profession. I am surprised by the 67% figure, I would have put it more at 40%.

It is a shame. The university hasn't supported students in our program ever at the level that they are elsewhere. Instead, we rely on external funding sources --- foundations and private donors. This year was down, but then again our donors have been amazingly supportive over the years.

When I was DGS, I constantly suggested to faculty to tie graduate student fellowships into their own research grants. This is a common practice at other programs, but not ours. We also got spoiled as a university and as department during Walter Williams's reign as chairman because of his amazing fund raising abilities for the department in general.

Zac is right, we need to get better at funding.

[Steve Miller]

Zac, send me an email. It's too late for Fall '09, but if you re-apply for grad school next year I can point you toward an external funding source.

smiller at wcu dot edu

Steve