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Incidentally it is also Larry Reed's birthday. A happy birthday to Larry who works hard to keep alive the teaching of Mises and others.

Yes it is. Larry is terrific and has been a great friend (as has FEE of course) to Austrian economics for years.

Happy birthday to Larry!

Equivalent to "Einstein?" I'm sorry. This is the sort of absurd hyperbole that makes Austrians seem like fanatics. It does not diminish Mises to say that his greatness is unrecognized by the majority of economists nor that his contributions are not as universal as figures like Einstein in the natural sciences. Part of the analogy to Einstein should include dominance within the profession -- as conceded by members of the profession. So go on arguing that he is underrated underappreciated, which would make him What? Ramanujan? Philo Farnsworth, Nikola Tesla? But not an Einstein, Edison, Gauss or Adam Smith.

Mises was better than Einstein:

For one, he never wrote an article that absurd about physics.

Fair enough Coriander. I should have written "He *should be* considered..." rather than "is." To Austrians, he is, but certainly not to the rest of the profession. But I'm comfortable with "should be" - which is consistent with my point about Marx as well.

Steve, in terms of launching a scientific revolution of sorts, could one argue that Menger should be considered something like the Einstein of Austrian economics?

Hans Hoppe thinks Mises is great like Rothbard and Kant. If we get the rankings right we'll all be so much better off.

But Steve! It is simply wrong to place Hayek on Mises's shoulders. I certainly do not deny Mises's influence on Hayek. Yet, as an economic theorist, Hayek outperforms Mises by far. Just compare Human Action (especially the sections on interest and capital) with Hayek's Pure Theory of Capital or most of Hayek's other works. Don't get me wrong: I admire Mises for many reasons: the clearity of his thought, his integrity, his devotion to truth, etc. But as an economist, his contribution beyond the calculation problem is really limited.


Innumerable economists work on Mises knowledge problem / calculation proble
in all sorts of absurd frameworks without the foggiest understanding the source of their work or problem -- this is one reason the AEA committee on graduated education called them "idiot savants".

I stand by Hayek standing on Mises's shoulders in the following sense: the questions Hayek chose to explore and the vision through which he explored them were both from Mises. Mises was the Big Thinker and the system builder, Hayek less so. Hayek's contributions to economics (in a somewhat more narrow sense) are probably greater, but even those were developing the Misesian framework.

End of the day, I defer to Pete's quip: The best reading of Mises is a Hayekian one, and the best reading of Hayek is a Misesian one. Mises was first, hence Hayek stands on his shoulders.

@Dave: Menger was more like our Copernicus. Before Menger, everyone thought the sun of output value rotated around the earth of input value, when in fact it was the other way around.

I see little evidence for Mises as superior system builder. Mises rightly points out that great or open societies are characterized by economic integration (the Ricardian law of association). But this implies that his economics is vital for the overall picture he paints. Whenever Mises steps out of the timeless framework of Menger's price theory, he even steps behind Böhm-Bawerk (I'll send you a paper where I try to make this point). Wicksell, Hayek, or Robbins, they all strove higher than Mises. In this light, I do not see the point in a Misesian reading of Hayek. You could just as well argue for a Newtonian reading of Einstein.

Without trying to rank anyone, it is fair to say, "No Mises, No Hayek" and to ponder the fate of political economy and classical liberalism if Mises and Hayek had not both lived very long and productive lives. Imagine if they had stopped producing and refused to reprint key works like Menger or died early like Bohm Bawerk.

Pity about the early epistemology and methodology parts of Human Action though:)

I don't like Mises's style.

It's funny, I've noticed increased interest in Mises recently. Here's a college student who recently finished Human Action:

He posted a decent number of quotes from the book while he was reading it.

Mises didn't work anything like as much on Capital Theory as Hayek did. Hayek wrote book on it, Mises only wrote sections of books on it.

I think it's rather unfair to criticise Mises for this. By the same sort of argument Hayek could be criticized for never writing an all-encompassing economic treatise. Or I could be criticised for having a rather primitive understanding of Gin and never having written an extensive work on it.

On the subject of Capital I think that there is much to be said for the pure time-preference theory. Let's suppose that, as the productivity theory says, an increase in productivity causes an increased demand for capital and the interest rate rises. Those who can supply loans can charge more. Isn't this actually a form profit? Only those who haven't locked their capital in at a fixed rate can take advantage of the opportunity. Having "dry powder" at the right time is an entrepreneurial/speculative problem.

Probably inevitable, but the comments are too backward looking, and the point of scientific discourse is to progress forward.

But my own view is that both friend and foe underestimate Mises in weird ways, and overestimate Hayek in weird ways. This makes my view problematic for everyone. Mises is the great system builder, Hayek is his greatest student. The problem for my point of view don't stop there because in terms of advancing economics by way of the Austrians, I think a productive reading of Mises is a Hayekian one, and a productive reading of Hayek is a Misesian one. It is in forging a Mises/Hayek paradigm that I believe we will advance in thought and application. Now it gets even more complicated because my next paradigmatic suggestion within the existing intellectual world of economics and political economy is to appropriate the ideas, apply them in unusual situations, and simply write economics -- not history of thought. I think history of thought is very valuable as an intellectual exercise, and I do think scholarship in intellectual history is fascinating (I personally am drawn to this work). But I also understand its limited market in economics proper. So rather than abuse history of ideas, I think we should engage in what I call "opportunistic readings" --- see my essays "Why Read the Classics?" or F.A. Hayek as an Intellectual HIstorian" or the "Use and Abuse of the HIstory of Economic Thought within the Austrian School".

We really don't have to obsess over whether it is Mises or Hayek --- both were brilliant, they gave us great ideas to work with, but we have to decide how to take those ideas to address the problems we face today (read Mises's introduction to The Wealth of Nations for a similar expression of the difference between history of thought and contemporary application of economics).

Mises is in many ways that greatest economists of the 20th century, that he isn't recognize as such and Keynes is often given that label is a mere artifact of language bias (economics was an English speaking discipline in the 20th century and remains so today) and the zietgeist of the century which led to totalitarian experiments. Mises cut against the current methodologically and ideologically, so much so that his analytical contribution was lost --- though please do remember that in 1969 he was named Distinguished Fellow of the American Economic Association (look at the list of Distinguished Fellows through the years, it is a who's who list of economist --- Mises was not a crank in the eyes of his peers, he was cranky, but not a crank). Hayek's development of Mises's argument along knowledge lines was easier to grasp by his peers --- his telecommunication metaphor fit with the emerging zietgeist (see Mirwoski's Machine Dreams on this aspect). Hayek was already writing primarily in English for over a decade when he wrote his "Use of Knowledge" essay, and same for The Road to Serfdom. When Mises wrote Omnipotent Government, he was transforming into an English language economists --- in his 60s. The generational difference between Mises and Hayek and Hayek's penetration into English language economics a decade earlier made a difference in the reception of the two, and also the way in which they chose to engage their audience. Mises even in English engaged his opponents as they did in 19th century German language disputes, Hayek learned in his 30s and 40s to engage his opponents as they do in English language.

This stuff matters.

Quite frankly, this idea that we should read Mises with a Hayekian gloss (and vice versa) is bizaarre. Shouldn't we simply READ Mises and READ Hayek, and decide what is right and what is wrong? Is it really surprising to you that so many people associate GMU with hermeneutics, despite protestations that its influence there has waned?

This isn't about "hermeneutics" in the deep philosophical sense, but about hermeneutics in the more narrow sense that we can't "just" read a work, rather we bring to that reading all of the context we have as scholars. Our decisions about what is right and wrong will themselves be affected by what we've read before. Being a good reader requires that one understand the context from which the author is writing. The origin of hermeneutics was in biblical interpretation and all readings involve interpretation, whether you care to acknowledge it or not.

Reading Hayek by realizing that he was strongly influenced by Mises and following up on questions and issues that Mises addressed makes for a better, more historically accurate understanding of Hayek than ignoring it does. We can't "just" read them because we always bring context to the reading. Better we should acknowledge it and get the context right than ignore it and get it wrong. (Sort of like how so many public commentators talk about economic issues using bad economic theory but try to claim they don't have a theory - sure they do, it's just a bad one.)

And reading Mises through Hayekian eyes is one way to read him. Another is through Weberian eyes as well as the broader German conversation of which he was a part.

Each of these readings adds an element of understanding to the author's ideas. Claiming that the best or most productive reading of an author is from a particular context is just a way of saying that such a reading reveals a better understanding of what the text means. The point, after all, is to get at truth.

The problem is that texts do not speak for themselves, no matter how much we might want them to. This isn't about GMU and hermeneutics, this is what scholars everywhere do when they grapple with complex historical texts. It's what Rothbard and Kirzner have both done with Mises, after all.

(And no, this does not mean I think everything is relative and the real world is all illusory, etc., so let's just not go there.)

A practical question for Steve/Peter. Steve, you write that in a just world "college students would be reading Mises with the same frequency and breadth as they now read Marx."

For the most part, I think students read pieces and excerpts of Marx. What selections from Mises would you suggest students read?

Great question.

Everyone should read "Economic Calculation in the Socialist Commonwealth." There are other parts of Socialism that would be great for more students to read. Human Action is tough for other than Econ majors, although there are good parts there too.

One of his most accessible and best books for college students, I'd say, is Liberalism. It remains one of the best 20th century statements of classical liberalism. It's more readable, less "technical" than Constitution of Liberty (although CofL is more deeply argued), for example. And it's Mises on more than just economics. Frankly, it's a neglected classic.

The other book for students, and it's a short one and highly relevant to the current scene, is "Interventionism: An Economic Analysis." In fact, I think we should go to the premiere of Michael Moore's movie and throw copies at him.

I'll be interested in what Pete says.

The Anti-Capitalist Mentality.

Regardless of the more sophisticated applications of hermeneutics, the simple application of historical context is absolutely necessary to understand both Hayek and Von Mises.

Think about it Purple one, you know what the real bills doctrine controversy is about. You know what Mises means when he talks about exportation of banknotes. Neither have any meaning today. That is all understanding the background.

Uh, Current, I really don't think they're talking about familiarity with historical debates and schools of thought here.

IMHO Pete is basically right about Hayek and Mises. They are highly complementary and working on the same basic program. And that program is pretty much the creation of Mises with Hayek pretty much the great disciple. I think Hayek sort of modernized Mises, brought him into the 20th century as it were. If that's about right, historians of economic thought should probably rank Mises above Hayek if such rankings can ever be made. But today's working economist lives in the 21st century and will therefore usually get more sustenance from Hayek than from Mises.

"I really don't think they're talking about familiarity with historical debates and schools of thought here."

No, but my point is that it's a similar sort of thing. If you want to understand discussion of the historical controversies you have to know what they are about. Similarly, if you want to understand Hayek well you have to understand where he was coming from.

I assume this is what Pete means, though I'm not sure.

Pete, you write to the commentators of this post : "We really don't have to obsess over whether it is Mises or Hayek --- both were brilliant, they gave us great ideas to work with, but we have to decide how to take those ideas to address the problems we face today." This should be addressed to Steve, who after all put Hayek on Mises's shoulders. I only reacted to this blatant underestimation of Hayek. Within the HET community, there is little doubt that Hayek is the better technical economist. It is indeed possible to rank economists that way: it is clear that Wicksell outperforms Böhm-Bawerk as capital theorist, that Arrow outperforms Cassel as general equilibrium theorist, that Ricardo outperforms Stuart as monetary economists, etc. Outside the HET, where you wants us to be, that is, at the frontiers of economic research, Hayek seems to be much more useful than Mises. At least, as you mentioned before on this blog, Hayek is one of the most cited economist, whereas Mises's frozen thinking gives shelter to the cranks at the Mises Institute (I exclude Salerno; I remind you of Hoppe). Thus, judged by standards outside the HET, Mises falls even more behind. Thus, we are left with the Austrian School, which alone put so much emphasis on Mises. Also this blog persistently neglects other major figures within or close to the Austrian tradition: I never read about Haberler (in a sentence not mentioning secondary deflation), Robbins, Machlup, etc. These guys are of course more neoclassical, like Hayek. They seem to be irrelevant to the Austrian future. Yet, all of them have problems with Mises's stagnation as an economist. Look at Hayek's review of Human Action. Look at his comments on Mises in the Pure Theory of Capital. Read his Utility Analysis and Interest (1936!): here, Hayek formulates a violent critique of Böhm-Bawerk's conceptualization of intertemporal choice (a "pseudo-rpoblem"). Mises, in contrast, do not even reacts to such challenge and indeed never sees Hayek's point. Even more blatant: While Hayek invents intertemporal general equilibrium in 1928 and extend it in 1941, Mises makes use of the ERE in 1949, a crude stationary and essentially timeless framework that you can find all over in early classical analysis. As a Misesian, you are thus by necessity a relict in the HET. It was Robbins who argued against such an approach. Hayek makes the same point in the Pure Theory of Capital. Thus, you have to choose between Mises and Hayek. They are alternatives, not complements. Further, it is as simplistic to treat Hicks as Hayek's student as it is to treat Hayek as Mises's student. These two students outperformed their mentors, were smarter, simply better. Further, don't forget other major influences on Hayek, like Wieser, who was much a teacher of Hayek than was Mises.

In defence of Mises, it may help to recall that during the time of his life when intellectuals are supposed to do the best of their original thinking, he was in the artillery corps and then in another kind of trench fighting a daily battle against inflation and other economic problems as a public servant and government advisor. You may favour the theory that genius thrives on adversity (starving in a garret and all that) but it was probably only when he went to Geneva that he had the environment, including scholarly associates, that is required to develop ideas at the highest level, then in 1938 he lost his library and he was on the road again. Of course you have to make judgements on what he actually produced, not what he might have produced under better circumstances. But you have to wonder….


I think you are too concerned with Capital theory, and debates over equilibrium. Perhaps we have to choose between Mises and Hayek on these points. But, there is much more to economics than these areas.

Also, what comment on Mises in "The Pure Theory of Capital" do you mean? I have the digital version from LVMI it shows only two mentions of Mises, one on page 45 and the next on page 439. He is mentioned again at the beginning of Appendix V. None of these mentions are really critical though.

amv: "Further, it is as simplistic to treat Hicks as Hayek's student as it is to treat Hayek as Mises's student. These two students outperformed their mentors, were smarter, simply better."

Do you mean to imply that Hicks was a better economist than Hayek!?!


I realize I'm coming in a bit late, but I think these other Austrian you refer get more play than you are imagining.

More or less every Austrian, especially Kirzner, has given Robbins lots of attention. It is true that Habeler's name is not spoken as much as he deserves, but that's largely because his ideas have been so fully absorbed. You invoke him whenever you discuss comparative advantage in opportunity cost terms or refer in any way to the production frontier.

Personally, I've given a lot of attention to Machlup and Morgenstern. For example:

On Machlup: Koppl, Roger. “Machlup and Behavioralism,” Industrial and Corporate Change, 2000 9(4): 595-622.

On Morgenstern: Koppl, Roger & J. Barkley Rosser, “All That I Have to Say Has Already Crossed Your Mind,” Metroeconomica, 2002, 53(4): 339-360.

It is true we don't harp on the bits of the Austrian tradition that have been fully absorbed by post-war neoclassical orthodoxy. We probably should, but only when doing history or economic thought!

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