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Wow. WHAT HE SAID.

I can't tell you how frustrated it makes me as a GMU PhD graduate to hear the sorts of descriptions of "Masonomics" (a term I dislike almost as much as "Austro-libertarian" ;) ) that Tyler has apparently given. Pete is right both on theory and history here. The core of what GMU has long been about is the union, not the intersection, of Hayek (and by implication Mises), Buchanan, and Alchian, and later, V. Smith. And it's always been about engaging the profession in the journals.

I just want to add one more piece of the puzzle, even if it seems self-serving. Take an additional step beyond Pete's point about graduate students. Look at the GMU PhDs since 1985. Who have been the most successful as publishers, teachers, and public intellectuals? I'm willing to submit that the correlation between the intensity of "Austrianness" and those measures of success is pretty high. It's not 1.0 but it's strong.

Pete and I were just talking about this last week. Way back when, Buchanan knew which side his bread was buttered when he told the department that whatever else was true of the Austrians, they were bringing in the best students. (Again, self-serving I know, but that doesn't mean it's not true.) My judgment of the last 10 years of students at Mason is that the correlation noted above still holds fairly strongly.

To dismiss the contributions of Austrian economics to the history and quality of the GMU program is not only just blatantly false, it will end up shooting GMU in the foot if it sends the signal that Austrian grad students won't be treated as equally important parts of the research program. Know where your bread is buttered.

"We're not Austrians! Not that there's anything wrong with that!"

http://www.youtube.com/watch?v=9ild8w0rHQU

Note, two T's in Letter ;)

If some of your colleagues want to refer to Masonomics, they can have this term. It will not do them good. Not with a movie on the Freemasons coming out...

I should also add that I agree entirely with Pete.

Here is Vernon Smith's Nobel address:

http://nobelprize.org/nobel_prizes/economics/laureates/2002/smith-lecture.html

I am a Tyler fan from afar, and with interest I follow his work and some of the controversy he stirs up from the libertarian/Austrian side.

I pose this question for folks to consider: is his propensity to be a little wrong, a little impatient and reaching, and a little politically correct good or bad from the L/A movement as a whole?

I also ask: what famous economist might Tyler be most like? What about Schumpeter, who Galbraith once said about (going from memory): "[When given a choice between being memorable or right, Schumpeter never hesitated]"

Why is Tyler taken so seriously? Whyndoes what he says matters?

It's because he has a powerful blog and a powerful newspaper column. It's not because of his "scientific" work.

Pete writes:

"certain points are distorted in order to create an appearance of uniqueness and originality"

Isn't this part of the story of Cowen's inaccurate and uncharitavle explications of Hayek's macroeconomics -- the stuff that opens up room for a good deal of the originality and "anti-Hayek" critical force of his Risk and Business Cycle work?

Three cheers for Cowen's advocacy of a cross disciplinary conception
of the the field of play of the economist and the modern econ department.

Cowen I think is fantasizing.

I think Cowen is telling you what he wants GMU economics to be, not what it is.

Galbraith once said about (going from memory): "[When given a choice between being memorable or right, Schumpeter never hesitated]".

Neither did Galbraith. But Schumpeter will be remembered longer due to the Austrian part of his thinking.

First, I'll say that I'm disappointed that I didn't hear about this lecture beforehand. Was it not open to GMU grad students? If not, that strikes me as... imprudent.

I'm sure there are a lot of social dynamics here which I'm only vaguely aware of, but Arnold's post did not strike me as overly dismissive of Austrian economics; indeed, I don't think it's being disputed that:

a) Masonomics IS a tradition which is distinct from Austrian economics
b) Masonomics draws a lot of inspiration from Austrian economics, along with the works of others
c) Some Austrian economists fit the negative characterization which Arnold employs. I don't see this as being aimed at GMU's Austrians, but perhaps I'm being too charitable here.

I think Steve's comment about academic successful and "Austrianness" is somewhat out of line, as it implies... what exactly? That GMU PhDs who don't focus on Austrian economics are of lower intellectual quality? That we're instructed poorly and not prepared for academia? That students who want to help define a characteristically "Masonomic" research agenda are doomed? Is this because Masonomics is a barren research field, or something else? Does the same criticism apply to ICES students? I'm going to avoid feeling insulted here, and instead ask with genuine curiousity why - if it is true - that GMU apparently fails its non-Austrian PhD students.

Maybe I'm being a bit blunt, and this is ill-advised. But what strikes me as surprising here is seeing the GMU Austrians and those (affiliated with them) actively digging in against the Masonomics crowd. Are things really that dysfunctional in the department? From the plain text of Arnold's post, it doesn't seem like there's any reason for the Austrians to react negatively, but I could simply be blissfully ignorant of the squabbles within the department over these things. I don't identify as an Austrian, but I love GMU and find it an incredibly stimulating place to be, and I think there are tons of synergies between the various strands of thought that all parties stand to gain from - the experimentalists, the Austrians, the Carow people, even the computational social scientists. So I just can't understand the divisiveness of the sentiments on display here, from my perspective it seems like a completely unnecessary academic turf war.

Tyler Cowen is the Perez Hilton of economics.

People are being way too unkind to Tyler and his contributions to knowledge in economics and social theory. Tyler is a stimulating thinker, that you may or may not agree with --- but he provokes thought.

He is also very accomplished as an economists and public intellectual.

Peter --- this is not an academic turf war, this is an intellectual dispute, with empirical claims being made on both sides that can be refuted against public information. No, dysfunction, but intellectual engagement with an argument.

GMU is an incredibly stimulating place to be for economics students precisely because we have these sort of "methodological" disputes, as opposed to the sort of methodological straight-jacket that exists throughout much of our profession.

BTW, you are proving my point about signals needing to be interpreted and judgements formed in order for information to become knowledge --- what you read as divisive sentiments, I would read as healthy engagement demanding that empirical claims be examined against the factual record of roughly 25 years.

And let me just add that my original comment noted that GMU's tradition is the UNION NOT THE INTERSECTION of the Hayek-Buchanan-Alchian-Smith traditions. All of those are part of the GMU tradition. My complaint with what Tyler is reported to have said is that he DID sound overly dismissive of the Austrian contribution to that tradition, which as Pete notes has been there strongly from the beginning partially because Buchanan and Smith were influenced by it themselves.

My point about grad students was also pretty clear: there's no 1:1 correlation. There are terrific grad students throughout the program. But as Pete notes just above, look at the empirical record of the last 25 years and see which ones have been most successful. There's no destiny or fate here, but there is pretty good evidence that the Austrians outperform what many would expect coming in.

My problem with term "Masonomics" is precisely what Greg said above: it reflects what some faculty *want* Mason to be and gives a distorted picture of what it *is* and who, historically, has been most successful there.

Let's take on Cowen were he lives right now, this "autism" stuff and the "organizing" of lots of stuff.

One problem with economics is it is REALLY HARD and unbelievably complicated and involves the unification of complex webs of conceptual understanding and the accounting for lots of different empirical understandings.

Mainstream economics is REALLY BAD at this right now.

It's internally incoherent and is in all sorts of dimensions a great explanatory failure -- and simply pathological as a causal explanatory science.

Does Cowen offer any cure for this? NO.

As far as I can tell, a Cowenian economics would be more of an "all over the place" collage, with LESS internal coherence and LESS explanatory unity and LESS causal explanatory power. In other words, it would be more of an autistic mess of little islands of disconnected "organizing" -- sort of like the order you find in different corners of a hoarders house.

Compare Cowenian economics to the economics of Bruce Caldwell of Philip Mirowski -- Caldwell and Mirowski's work brings systematicity and an critical understanding to the whole grand explanatory project of economics at its core across across decades of research. Tying together explanatory strands across research programs and across life times of reflection and achievement in economics sorts out explanatory power and causal achievement from 5th wheel hoarder piling within the dustbin corners of the all the professional journals of the AEA -- or the mostly explanatorially and causally unjustified formal stuff on page after after page across the textbooks.

So when Cowen trashes economics richly embedded in the complex net of most powerful explanatory and causal traditions in economics -- he's doing so to advance the hoarder "ordering" of the autistic with piles of disconnected little systemeticity pilled everywhere you look in his room.

I'd point to the work of Douglass North as another example of a great anti_Cowen / anti-autistic economists who unifies and expands the explanatory power of economics -- and often does so by placin his work in the larger context of various economics traditions -- e.g. note all of North's footnotes to Hayek in his most recent book.

Tyler's a pretty subtle guy and not to be dismissed so lightly. While we're at it, we shouldn't dismiss "autistic" economics so lightly either. I was at a workshop in Stanford when Akerlof presented some of his then-incipient ideas on identity. Several of us having a more or less Austrian disposition were giving him a hard time about putting identity in the utility function. No, no, we cried, identity is about *meaning*. I still think that's true in some sense. But then Akerlof and Kranton (QJE 2000) turns out to be quite useful for many purposes, including some of the forensic science issues I've been working on with Jim Cowan and others. So, you know, we can dig Hayek and say how he has so much to offer without pitching everything that doesn't look like Hayek. Let a hundred flowers bloom.

I'm all for a 1,000 flowers blooming.

But economics has big problems right at its core -- a thousand new flowers are going to fix that problem. And attacks on efforts to unify and make coherent the explanatory project of economics within the deep context it's most powerful causal explanatory traditions does represent any kind of progress.

What are the big issues in this converation between Cowen and Boettke?

It's not Boettke who wants to kill any flowers -- it's Cowen who wants to cut off and kill the trunk and root system.

I'm all for a 1,000 flowers blooming.
But economics has big problems right at its core -- a thousand new flowers are NOT going to fix that problem.

Stop and smell the flowers, Greg.

I didn't think of that until just now -- honest!

Roger, I'm well known for doing this. Honest.

And I've perhaps done too much -- all the time I've spent reading neuroscience and biology etc perhaps should have been spent doing math.

(When I read or listened to some of Cowen's pupular stuff on brain science and biology and psychology etc I'm usually not that impressed. It's not up to the standard of the philosophers who work the same material -- much less the neuroscientists and biologists. But I am not familiar with Cowen's peer reviewed articles treating this stuff, which I don't doubt is of a higher caliber.)

Roger, I was smelling the flowers of a lot that Cowen talks about ie self deception, neuroscience, psychology etc 20 years ago and more -- I think it's great that Cowen celebrates this party and invites more economists to join the party. That's a very good thing and I commend him on that.

Are the economists doings a better job handling this stuff than the neuroscientists, psychologists, biologists and philosophers I was studying 20 years ago?

Let's hope in some ways they are. But it seems evident in some ways
the economists haven't grappled with some of the deeper issue at hand here -- and aren't sure how to keep their identity as "economists" while working this territory -- in fact a concern with keeping their "economic science" idenTitus seems
to shape this work as much as anyhing.

I take the name of Tyler Cowen's blog, "Marginal Revolution" to suggest that he chooses to work on the margin. He places himself at the edge of the existing power structure, not deep within it, but not entirely outside of it either. That's where he thinks he can be most successful. That's why he is so maddening to one who prefers clean truths.

I've always supposed (correctly, I think) that GMU's specialty was economic theory informed by Austrian and Public Choice insights. The "Masonomics" that Cowen apparently laid out seems like a mishmash of different ideas, none of them very profound, that lead to a kind of interesting but shallow contrarianism.

Very unfortunate, because clever contrarianism won't lead us to a better understanding of the world, nor will it help us form better policy & applications.

It'll be too bad if Cowen's version is indeed the future of Masonomics.

I think it's fair to say that the Cowen/Kling take on Masonomics undersells Austrian economics and evolutionary thinking both. I don't think it's fair to say that it's "shallow contrarianism." Come on, the Cowen/Kling stuff is pretty serious and you shouldn't give it the back of your hand, as I said earlier.

I'm sorry that Bryan Caplan gets more attention as a representative of Masonomics than David Levy. Bryan is a serious and smart guy and everything. (And he's a pleasant lunch partner.) But Caplan represents, IMHO, bad epistemics whereas Levy represents a much better epistemics. What Buchanan & Tullock have called "methodological symmetry" is lesson number one: You have to model all the actors symmetrically, which includes both experts inside your model and you the model builder. This notions is pretty much what Peart and Levy call "analytical egalitarianism." Levy's research program is strongly Misesian. Caplan's is anti-Misesian. The main point here is precisely analytical egalitarianism. If Caplan is at the center of "Masonomics" and Levy the edge, then maybe we should embrace the suggestion that "Masonomics" is not Austrian economics.

The purpose of Tylers various musings isn't to draw insights from a wide range of disciplines, but to show the world that Tyler is a really, really smart guy. No wonder Pete likes him so much.

Well, obviously the problem at Mason is that you all have just too darned many seminars happening at the same time. No matter you all are in a tizzy!

More seriously, I was not aware of the strength of the Alchian connection. Is that really stronger than the Chicago link through Buchanan and others like Levy?

Oh, and Greg, keep in mind that Mirowski's department is in the process of being disbanded.

How many of you were at the talk? Very little in the above comments has bearing on it, starting with my very first point, from the talk, repeated three or so times, that I was discussing "a Masonomics," not "the Masonomics."

Tyler,

I didn't detect that distinction in Arnold Kling's summary. You were the first commenter on his post. You made one or two minor corrections (depending on how you count 'em), but said nothing about "a" vs. "the." That distinction is inconsistent with Kling's words, "Also, what Masonomics is not: evolutionary biology . . . Austrian economics . . . " Altogether, then, I think you can say "Wish this point had been clear" or "Sorry I didn't call Arnold on this point" or something like that. But I don't think it's fair to castigate Pete or others for missing the distinction in this discussion.

Barkley, is Mirowski returning to the econ dept? What happened at ND is a disgrace. Anything which allows Mirowski grad students is what matters
at this point.


Barkley wrote:

Oh, and Greg, keep in mind that Mirowski's department is in the process of being disbanded.

Dear Tyler (and everyone else):

If I had understod Tyler's talk to be about _a_ Masonomics, and not _the_ Masonomics, I NEVER would have written an Open Letter. As I said in my first paragraph, I consider intellectual diversity a value not a distraction. Moreoever, as I said, Tyler always has something of value to say and thus I actually would have encouraged everyone to listen.

But Arnold has been trying for awhile to establish a "meme" which summarizes not _a_ Masonomics, but _the_ Masonomics. If you look back over my letter, after I admit I wasn't at your talk, I address mainly Arnold's rendering of the talk (mediated no doubt by other impressions that were conveyed to me within a 24 hour period).

I apologize for Tyler for any misrepresentations, and hope that my comments will be seen as directed primarily at Arnold's description of the talk.

Pete

That should read "I apologize to Tyler".

C'mon Pete, show some spine, you have no reason to apologize here. Steve: please slap Pete around here to stiffen his resolve.

Levy wound up with egg on his face when he accused others of misreading Galton due to his own misreading:
http://www.overcomingbias.com/2007/10/author-misreads.html
From what I've read of Levy, he puts a lot of effort into claiming that economists (particularly the classical liberal tradition) are on "the side of the angels". I think Caplan's disinterest in that (he tries to make economists seem correct, not likable) gives him better epistemics. But I'm no Misesian!

TGGP,

I think you have a very strange notion of scientific engagement IF admitting error is ruled out as being part of a better epistemics.

Also, I think your reading of Levy is extremely wrong --- he does not find the classical liberals on the side of the angels; read his recent papers highly critical of Leonard Read and FEE. If anything, David stretches arguments to critique, not to defend.

Roger's point about analytical egalitarianism is the right one for understanding Levy's project; as would be one that emphasized institutional robustness --- and how to derive the latter from the former.

David is a Chicago economist, David is a rational reconstructivist, David is a Quinean, etc., but he is not a Misesian nor is he wilfuly distorting the record to put economists on the side of the angels.

As both he and Sandy said in the instance that you point to --- ironically in a piece about carefulness, they made a careless error. They subsequently pulled their paper down for rethinking. As Keynes once supposedly said in response to criticisms that he changed his mind ... what would you have me do when confronted with a better argument or new evidence?

Greg,

The situation is that a few years ago the grad students were taken away from the heterodox department that Mirowski is in and given to this new "third rate MIT department." Now, the heterodox department is being shut down entirely, with its members to be scattered among other departments and think tanks, but forbidden not only to teach grad students, but now intro or intermediate level undergrad students. They will be allowed to teach their regular upper level courses, wherever they end up being located to those undergrads interested in taking their courses. Under the circumstances, I expect many of them to leave Notre Dame.

This is indeed a serious scandal all the way around. I understand that there is a petition floating around to protest this, but just as with the initial move to set up the new (boringly conventional) department and hand the grad students to it, I fear the fix is in the bag on this one. From what I understand through my connections there, the bad guy in this is an egomaniacal dean.

BTW, with regard to the main argument of Pete's post, is accurate to take it that the invocation of Alchian is a reference to the interest in evolutionary theory that some have at Mason, and which you seem to see Tyler as not being in favor of (along with Austrian economics)?

Sounds like you all need to go to lunch together, :-).

BTW, obviously at ND the people in the heterodox department who will be scattered to other departments will only be the tenured ones. However, I don't think there are many untenured ones as the department has pretty much not been allowed to hire since the new department was created.

Pete,

I think you are right to shrug off Levy's faux pas on Surowiecki. Moreover, he corrected himself promptly *and* in his apology correctly identified the "two failures" the led him astray. In other words, he is a mensch.

Here is why I said he is Misesian. In an appendix to Socialism, Mises says,
"In the genealogical tree of the Nazi doctrine such Latins as Sismondi and Georges Sorel, and such Anglo-Saxons as Carlyle, Ruskin and Houston Stewart Chamberlain, were more conspicuous than any German. "

http://www.econlib.org/library/Mises/msSApp.html#Epilogue

Peart and Levy cite that passage.

Peart and Levy used the term analysitical egalitarianism, not Mises. But I think it's fair to say that Mises adheres to it. For example, the categorical structure of action is essential to Mises, which means polylogicism is anathema to him and his program. That an important aspect of "analytical egalitarianism" without which you don't get methodological individualism. Peart and Levy quote Mises on race, too:


The anti-race argument was made even more emphatically, perhaps, by Ludwig von Mises:

"[The ethnologists] are utterly mistaken in contending that these other races have been guided in their activities by motives other than those which have actuated the white race. The Asiatics and the Africans no less than the peoples of European descent have been eager to struggle successfully for survival and to use reason as the foremost weapon in these endeavors."

—Human Action, London, 1949, p. 85.

Part of the P&L attack on eugenics is that it is genetic central planning and they are explicit about the Austrian connection there.

Altogether, I think it's fair to see Levy as more Misesian than Caplan, who places too much faith in experts to be in the Mises line.

Of course you might say, "So much the worse for Mises." Labels don't spare us the need to work out the issues! But I think it's good to spend some time on labels and this case the label "Misesian" fits Peart & Levy better than Caplan IMHO.

Barkley,

Not quite what I meant to communicate in my open letter. First, it was about a specific time and place -- GMU 1984-88 -- the GMU I knew as a student. The UCLA influence has been kept through the years with Walter Williams. And the core book for students in price theory to get their heads wrapped around is Alchian's University Economics. That provides the intuition, the formalism (presented in various books since then depending on who is doing the teaching, etc. -- from Silverberg, and Varian's texts, to Kreps, to Mas-Colell) is always framed within a reference point to the UCLA price theory tradition.

You correctly pointed out the Chicago price theory tradition as well as part of what students of Simon and Knight, and then Stigler brought to the table. And now Pete Leeson (a felllow at the Becker Center) is bringing that even more into the mix. So I would see the mix between UCLA and Chicago traditions of price theory, as what is in the core training (or "should be") of our students.

I actually think we need more price theory, not less in our curriculum at GMU -- the only real economics is relative price economics and all of that! Once students get the technical issues down and have the intuition even more down, it is relatively easy to get them to appreciate the subtle points in price theory that Mises-Hayek-Kirzner were (are) making and how to develop an Austrian theory of the market process (topic for my lecture tonight BTW).

Anyway, the point I was making in my letter was about roots, not about contemporary practice. Alchian's ideas (and Demsetz's) were very much a part of the core training of PhD students at GMU in the 1980s --- it was as I said a mix of Hayek, Buchanan and Alchian, that spread across the curriculum -- with applications from Tullock and Tollison largely.

The Austrian group pushed from that core training to appreciate the ideas of Mises-Lachmann-Kirzner (and Rothbard) in a new light that just read in isolation. Again that was the teachings in the 1980s, and a premium was placed on learning the ideas of the Brits -- Shackle and Loasby, as well as the new scholars such as Langlois, White, Selgin, etc. as well as the ideas of Garrison, O'Driscoll, and Rizzo. So the Austrian group took the core training and ran in a different direction than the public choice guys. Our applications came not exclusively from Tollison and Tullock, but from the problems with socialism (where Tollison and Tullock came back in with the rent-seeking analysis) and problems of revisionist history (where Rothbard's work on the progressives was influential --- and the work of new left historians such as Kolko and Weinstein).

Again this was 1980s, not today. And at the backend of that decade, Lavoie started pushing for ethnographic work to supplement archival revisionist history --- thus the study of culture and development in far away lands. He never did his development study, but I was working with him on the project when i was a student as his RA. And the emphasis on the black market --- see Alain Besancon (The Anatomy of a Spectre, 1980 article) to get a good idea on how we were approaching the understanding of the Soviet system and how one had to gain access to the "world-as-given" to make sense of it). Emily Chamlee-Wright took up Don's research program and did field work in Africa. When GPI was established a decade later, we sponsored field trips in Africa, throughout East and Central Europe, Latin America, and Asia. The products from this have been enormous, though not in developing a unique ethnographic economics/political economy. But in doing rather traditional political economy informed by some ethnographic information and experiences to help ground traditional analysis. Not exactly the radical transformation Don was hoping for, but a very productive development in terms of publication in various journals, etc. Black market research led to research on self-governance to research on how small scale capital accumulation breds growth and development (microfinance, etc.), and more importantly, how state-led development projects in the less developed world, as well as in war torn states, misunderstand the source of development and improvements in human well-being. So the methodological revolution Don advocated didn't take place, the a shift of analytical focus did, and some radical implications of the work followed. See the recent survey article in Public Choice on "Anarchism" and look at the recent work in the field, or look at Stringham's edited books --- both Anarchy, State and Public Choice, and Anarchy and the Law.

Pete

On the Alchian point that Barkley and Pete brought up:

I just graduated from Mason, so I can confirm what Pete's saying as still largely the case. Exchange and Production is part of the first micro class. It's not just Alchian's evolutionary stuff but his price theory that gets play.

This is a more natural fit than Chicago price theory, though of course they are very close. I actually (off-handedly) claim in the first chapter of my dissertation (on my website, which you can get to below) that UCLA price theory is noticeably closer to an Austrian approach. For a few reasons:

-The focus is on exchange, not on allocation (as with Buchanan) or bad neoclassical utility theory.

-It is more consistently subjectivist than the standard Chicago approach. That is, cost is opportunity cost to the individual. Check out O'Driscoll's take on monopoly prices in Method, Process, and Austrian Economics--gleaned from an Alchian lecture, if I remember correctly.

-The claims in the price theory book are presented as institutionally contingent. Rational choice might apply to other spheres, but prices shape it in specific ways.

I would *not* argue that Alchian information stuff is equivalent to Hayekian knowledge or Kirznerian discovery, but on the choice theoretic side, as a dogmatic Austrian I'm very comfortable in LA. Less so in Chicago.

great post. pain does relate to the greatest art works of all time.my goodness, you are so right!

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