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Right on. I've said it before: Hayek's actual policy recommendations stopped mattering the day he died, if not the minute he wrote them. What matters is the analytical framework he bequeathed to us. His work should be judged by how well his framework helps us understand the world, not the conclusions he himself saw in it.

I would go further and say that there are few, if any, actual arguments for state action in Mises and Hayek. There are some reasonable caveats (this argument in itself doesn't go so far as to prove X) and there are some wholly ad hoc caveats that simply don't fit in the overall framework. This is not to say that arguments couldn't be given for those positions, but they're not. They're simply asserted. As such, those caveats are no more part of the Mises-Hayek framework or system than is Hayek's favorite restaurant.

Great phrase: "deconstruct this binary"! I'll have to use that somewhere. It's much better than "false dichotomy".

I agree completely. And I think you could say very similar things about Mises. Where Hayekian anarchists get pissed of with Rothbardians is on the question of morality. If you disagree with them, you're evil because you violate Rothbard's moral system. Neither Hayek or Mises would be so stupid as to try to turn an economics discussion into a moral one. If Rothbardians would drop the self-righteousness, there would be no problems. Rothbard did a huge disservice to libertarianism by trying to fabricate his own morality.

Steve's post is excellent. I was present when Hayek said something similar to what Steve paraphrases.

I took detailed notes on all the conversations we had with Hayek in the summers of 1975 and 1977 in Menlo Park. Copies of the notes and my correspondence with Hayek over the years are on file at the Hoover Institution.

Incidentally, at my invitation, Thomas Sowell came over and spoke to the entire group in one of those summers. He presented the essence of what became Knowledge and Decisions.

Since two witnesses are better than one, let me say that I, too, recall very clearly that conversation with Hayek in Menlo Park (though to be honest I don't remember whether it was 1975 or 1977).

He said, to the best of my memory, after a group of us -- politely -- pressed him on his own arguments about spontaneous order, he said that if he were a young man again he would most likely have his "anarchist phase."

Jerry might also recall that a group of us saw him just before we went off to New York in 1975 to do his interview on "Meet the Press." We warned him that we'd be watching, so he better not "leak."

Oh, the presumptuousness of youth!!!

And if I may add one more thing. And I think that Jerry will also concur with this.

If one could have in one's mind the "ideal type" of what you would want a Nobel Laureate to be like, Hayek would perfectly match that ideal.

Knowledgeable, wise, and yet, exceptionally modest and even self deprecating in the most charming way. He was always patient with his time in sharing with us his ideas, experiences, stories of that, now, faraway time of the interwar period and his "battles" with Keynes and his other intellectual rivals of the time.

And my personal experience was that no matter what question you asked him, and regardless of how many times he may have heard that or a similar question over the years, he treated your asking it as if he was hearing for the first time.

Spending that time in Hayek' company, for a part of those two summers of 1975 and 1977 remains one of the highlights of my life.

Richard Ebeling

I concur with and endorse Richard's comments.


As a notorious statist your issue is not a lively one for me. I would agree, however, that Hayekian anarchism is a coherent and respectable position. I would add that any anarcho-capitalist must come to terms with Hayek. Even if some magic gave you certain knowledge that Rothbard was completely right on all points, including his criticisms of Hayek, you would still have to engage Hayek, show why his errors were errors, and so on. Thus, even from the most narrowly partisan Rothbardian perspective the Rizzovian Peace would seem to be the only reasonable perspective.

I would like to say a word for Hayekian statism if I might. I'll pick up from your two points.

First, pace Adam I think you can find in Hayek at least some hints of what I've bee calling “Humean status quo bias.” Hume warned us against putting “philosophy” ahead of a “reverence” for current political institutions. He said, “a regard to liberty, though a laudable passion, ought commonly to be subordinate to a reverence for established government” (Hume, 1983, Vol. VI, p. 533). Hume's History of England includes a harsh condemnation of Cromwell's regicide, which he seems to have thought extended the civil wars another 30 or 40 years. Recently, Vernon Smith and K. Vela Velupillai have in different ways bolstered the view that deregulation contains epistemic dangers equal to those of regulation. V. Smith talks about “ecological rationality” and gives examples of the unintended consequences of deregulation. (Sometimes good, sometimes not.) Velupillai's “computable economics” includes a theorem on “The impossibility of an effective theory of policy in a complex economy” (In M. Salzano & D. Colander (Eds.), Complexity hints for economic policy (pp. 273-290), 2007, Milan: Springer.) The theorem basically says computability problems plague policy making. Here is my entrepreneurial riff on the theme:

Second, Richard's recollection somewhat undercuts the view that Hayek would have remained an anarchist. In his youth he had a socialist phase. Seeing his young anarchist admirers, he commented that if he were young in the US in 1977 he would probably have had an anarchist phase. That thought is not evidence that he felt he leaked too much.

I would not pretend that my sparse comments here kill Hayekian anarchism. On the contrary, I have said it is a coherent and respectable position. I just wanted to interupt the anarchorama to say a word in defense of my more interventionist brand of Hayekian liberalism.

No argument Roger. My point from the start was that there's at least a 2x2 matrix here, not just two positions.

Good post, but anarchists can be defenders of constitutionalism too, because anarchism is a constitutionalism:

I like the work of Randy Barnett...

He's anarchist, and in his Structure Of Liberty he draws mainly on hayekian insights - Hayek is much more quoted than Rothbard

Concerning this, another question might (or might not) be interesting. I think I would formulate it something like this: what bridges should be crossed to become a Hayek-Rothbardian anarchist/minarchist?

I would add 'if any', weren't if for my personal feeling that there definitely are some bridges to be crossed. And I think there is an obvious argument to be made that Rothbardian anarchist and Hayekian Anarchists use other language and arguments. I tend to merge them almost everytime in discussion. I think using coercion is a quod-non, but a (hypothetical) rule-of-law anarchist-situation in which some things that Rothbardian 'ethics of liberty' would condemn, are part of the customary law... I'm having difficulties with it. But that's not too relevant here.

I do agree with the fact that a lot of the normative proposals of Hayek are not too relevant for judging his overall framework. (Some, I think, are just bizarre, like the one in 'competition as a discovery procedure'; If I'm not mistaken.) (Although they do challenge you sometime in wondering if it would be better than the status quo. The article 'economic freedom and representative government' is one of those that come to mind.)

I agree that dichotomy of Hayekian "classical liberals" and Rothbardian "anarchists" is a false one, but not because Hayek was a closet anarchist as all of you seem to suggest, but rather because he was not even the classical liberal. He was a social liberal, or "neoliberal" as it was popular to say in that time (1930s-1950s). The more appropriate Austrian ideological map would be: Hayekian "social liberals", Misesian "classical liberals" and Rothbardian "anarchists". See Bruce Caldwell's work for Hayek's social liberal ideological profile. He was never a classical laissez-faire liberal.

Or better still, consult Hayek's own work. In the "Road to Serfdom" Hayek repudiates laissez-faire, asserting that "wooden insistence" of classical liberals on free market dogmas caused a great deal of damage to the liberalism itself! In his inaugural lecture on LSE in the early 1930s he pointed put that laissez-faire dogma was so dangerous that he thought "one of the supreme goals of economic theory should be to refute it". You can find in Hayek's works endorsement of such socialist ideas as universal, government-run health care, government-run social security, antitrust, etc as completely reconcilable with his "neoliberalism". In his first Mont Pelerin address he attacks the classical liberal notion of "free enterprise and free contract" as paramount for capitalism, and points out that government regulation of monopolies is necessary to provide markets to "work efficiently". Hayek's compromising of minimal sate position is so well known that it is surprising for me to see somebody arguing not that Hayek was a conventional classical liberal (he was not). Mises in his comment on the third part of Constitution of Liberty, where Hayek argues that welfare state is compatible with liberalism says: "The third part is disappointing, Professor Hayek misjudged the welfare state". In his memo to Hayek in the time of the first Mont Pelerin meeting he openly attacks Hayek's insistence on antitrust and middle-of-the-road interventionist economic policy.

It requires utter ignoring of readily available textual evidence to portray Hayek as a classical minimal-state liberal. However, it takes really a gigantic stretch of imagination to see in him a potential anarchist. Especially if your best evidence for that is his ironical observation from 1977 that if he had a young man, he would have his own "anarchist phase" (note that he did not tell at all that he would be an anarchist, but just that he would have a temporary, youthful anarchist phase).

@ Nikolaj:
"but not because Hayek was a closet anarchist as all of you seem to suggest" So what am I, chopped liver? :-)

I think it is safe to say that Nikolaj missed the point.

A few remarks:

- The 'classical liberals' weren't complete laissez-faire either. Most of the people commonly named as 'classical liberal' were in favour of interventionism in one way of another. (Even Bastiat in 'the seen and the unseen' was in favour of public works.) So even if Hayek allowed some state intervention, that doesn't mean he wasn't a 'classical liberal'. The myth that all classical liberals were 'the state should be a minachist state!' still continues, apparently.

- "Hayek as a classical minimal-state liberal" <= I challenge you to prove that anyone here did so. I shall quote Prof. Horwitz: "No doubt, there are Hayekians who would give the state some significant role - of course so did Hayek". In my reading it says: 'Hayek gave the state some significant role' and not 'Hayek was a minimal state classical liberal'.

- I see thus no reason for your first paragraph, which attacks a position nobody took. I see thus no reason for your second paragraph, in which you proof something everyone knows. And I see no reason for your third paragraph, which is a combination of the first two paragraphs.

- "The more appropriate Austrian ideological map would be: Hayekian "social liberals", Misesian "classical liberals" and Rothbardian "anarchists"." <= The point is that one can be a Hayekian without being a social liberal, a Rothbardian without being a anarchist (and, I would add, a Misesian without being a minarchist.) So talking about 'the' Austrian ideological map with the 'Hayekian social liberals' is not getting the point Prof. Horwitz is making. Yes, one can be a 'social liberal' and be a Hayekian, and one can be a anarchist and be a Hayekian.

- This comment is for you Nikolaj: "Rothbardians should work harder to see in Hayek not a set of political conclusions but a framework for analysis that points beyond Hayek's own politics to something far more radical." I wish you a happy new year and a whole lot of fun studying the _framework_ that Hayek provided (which is not without some mistakes, imo - but that is no excuse for not studying it, of course.) Yes, this means reading more than CoL and Road to Serfdom.

I don't quite see how you can be a strict Hayekian and an anarchist. Indeed, even Rothbard endorsed at least two state interventions, copyright and the prohibition of fractional reserve banking.
Copyright was a consequence of statute law (the Statute of Anne, 1710) and was never a part of the common law; the latter restrictions he endorsed were inconsistent with the development of banking and contractual arrangements that allowed for fractional reserves. That said, Rothbard is close enough to be in the anarchist camp; not so, Hayek. Stephan Kinsella has pointed out the sea change in libertarian thinking about "intellectual property" in recent years, from pro to anti. Jeff Tucker has also been all over this issue. Perhaps if Rothbard were alive, he might have changed his mind about it. I don't know if he would have changed his mind about free banking.

Thanks Lode, you saved me the trouble of responding to my good friend Nikolaj, who continues to have major problems with both Lachmann's Principle of Charitable Interpretation and reading the plain text in front of his face.

The really important point here is that I'm using the adjective "Hayekian" to describe an intellectual/theoretical framework that owes much to Hayek and NOT "what Hayek believed." No one is claiming Hayek was a closet anarchist. What I AM claiming is that there are many of us who use Hayek's *framework for analysis* in order to explain how stateless society might be possible.

That's a different argument for such a society than is presented by Rothbardians. Whether or not one or the other is better is a separate question. My point was simply to note that such an argument *exists*, which the simple dichotomy seems to rule out.

The essays linked to in the various posts are all interesting. Roger says in his essay that "Policies that ... directly support start-ups that are expected to contribute the most to 'job growth' or some other end cannot succeed unless policy makers perform the mathematically impossible feat of predicting the future (p. 5)."
I remember a post two or three years ago at a financial discussion board by an equity analyst, who said that entrepreneurs can't predict the future because doing so "is existentially impossible." It's not merely that the available mathematical tools are inadequate for performing the requisite calculations correctly. It's that the future can't be predicted under any circumstances given the nature of reality. This seems to be in the spirit of Roger's essay.

I also agree with Steve's point about Hayekian vs. Rothbardian intellectual/theoretical frameworks; but for me Rothbard's "anarchist transmission mechanism" (if I may be so bold) is more on point.

Hayek was a protypical classical liberal of his time. Road to Serfdom was an act of profound political courage. If it seems tame now, it was treated as beyond the pale by intellectuals of his time.

Hayek kept moving to a more thoroughgoing liberalism over time with Constitution of Liberty a way station. His volume of New Studies contained the important essay, "Liberalism." I wrote a review essay of he book for Libertarian Review at the time, and focused on that essay as central to Hayek's thinking.

I observed that, for Americans, "objective conditions fashioned a more radical liberalism than that to which Hayek subscribed." I also went on to observe modern libertarians lack an appreciation of their own intellectual history and "Liberalism" provides that.

The essay also provides a framework within which to move ahead intellectually. That is the thrust of Steve's post.


"Yes, this means reading more than CoL and Road to Serfdom."

I cannot agree more. For example, Monetary Theory of the Trade Cycle, Prices and Production and other pre 1937 Stone-Age economic works.

O Driscol: "Hayek was a protypical classical liberal of his time. Road to Serfdom was an act of profound political courage."

Is this some kind of syllogism? I cannot see the logical link. Road to Serfdom was an act of courage, no doubt, but not necessarily because it was written in the classical liberal tradition, but rather because it was against the socialism and central planning by pointing out that further economic centralization would lead to a political serfdom. Those are two completely different arguments. Hayek understood his position as a third way between the socialism and laissez-faire, not as a rehabilitation of the classical liberal position. He openly accused a laisee-fairist dogma for the emergence of monopolies and cartelization, and required a far reaching government intervention. He praised enthusiastically Henry Simons's socialist book in which he argued for the nationalization of railroads and all big businesses, for progressive taxation, abolishing advertasing and so on. And although Hayek did not agree with every particular Simons' measure he praised Simons's understanding that what "liberal" must do is not to indulge in futile 19th century laissez-faire dogmas but to offer a concrete plan of using government power to improve the market.

We can simple pretend that inconvenient facts we don't like don't exist, but that leads nowhere. It will not make of Hayek a minimal state liberal. It is interesting how Mises was not in the net of these "historical circumstances" as Hayek was? How he formulated his, rather different, version of the liberalism in the same conditions as Hayek? Any thought about that? Was not maybe, just maybe, the case that American libertarians, far from neglecting a true liberal roots of their tradition in Hayek, simply adopted a more consistent, logical and radical version of the same tradition, offered by von Mises?

"Thanks Lode, you saved me the trouble of responding to my good friend Nikolaj, who continues to have major problems with both Lachmann's Principle of Charitable Interpretation and reading the plain text in front of his face."

I thought it was Gadamer's "hermeneutic good will", or maybe Derida's "Politics of Friendship", but whatever, there is no much difference :)

Steve, I don't why do you reject the authorship for discovery of Hayek, closet anarchist. It was you who wrote:

"There is a story about Hayek from the 1970s that may or may not be apocryphal, and I suspect some of our more senior commenters can verify this, that is relevant here. Supposedly when he was engaged in a conversation about anarchism with a bunch of young libertarian academics (presumably at Menlo Park) in the 1970s, Hayek said something like the following "Look, I'm an old man now and I came to my classical liberalism in a different era, so I can't accept where you all are now. But, if I were a young man today, I suspect I might well be this type of anarchist." Again, that's at least how the story has been passed down. I bring this up because it suggests that Hayek saw the anarchist implications of his own work even if he couldn't go the next few steps."

Obviously, the most precice way of describing your assertion about Hayek is that you consider him some kind of closet anarchist, aware of "the anarchist implications of his own work even if he couldn't go the next few steps" And your fellow Hayekian anarchists confirmed firsthand that the anecdote was correct.

If I may add to Jerry's observations.

I feel (and fear) that too many current libertarians often fail to appreciate the historical context in which the ideas of liberty have been defended at various times in history, including the more "recent" history of the 20th century.

In the war years of the 1940s, the general popular and intellectual currents were all in the direction of a more or less thorough going form of social central planning.

As Charles Marriam argued in 1948, "The alternative is not between planning and no planning, but between democratic planning and autocratic planning, between planning in a free society and planning under a dictatorship, whether Fascist or Communist . . . Planning is coming. Of this there can be no doubt. The only question is whether it will be democratic planning of a free society, or totalitarian in character."

A central premise for which Hayek truly went against the tide of that time in "The Road to Serfdom," was his argument that planning of economic affairs seriously threatened both personal and political liberty, as well as economic freedom. At that time this was not really appreciated or believed in.

People like Marriam (who Hayek actually debated on American radio when he was in the United States for a book tour shortly after "The Road to Serfdom" was published in America) were convinced that central planning did not have to lead to any significant loss of liberty.

His chapter in the book on "Why the Worst Get on Top" was a shot across the bow of those who, like Marriam, thought that the new planned society just had to be run by well-intentioned and democratically elected people to assure that planning was combined with the tradition of "democratic freedoms."

These were heady times for the social engineers. Ten years earlier, in 1932, Stuart Chase published a book entitled, "A New Deal," in which he declared:

"We propose then a national Planning Board [be] set up under the auspices of the Federal government . . . and manned by engineers, physical scientists, statisticians, economists, accountants, and lawyers . . . Why should Russians have all the fun of remaking a world?"

The entire theme of part one of Hayek's "Constitution of Liberty" is a direct challenge and response to this social engineering mentality as it had continued in the post-war period.

I know that a recently published series of critical memos that Rothbard wrote shortly before "The Constitution of Liberty" appeared attacks Hayek's defense of freedom on the basis of how little men know, that knowledge is decentralized among all the members of the society, and that much of what we call "civilization" is the unintended consequences of human action.

But Hayek's entire agenda was to undermine the hubris of the intellectual (to use Ropke's phrase), and their "pretense of knowledge" (as Hayek entitled his Nobel Lecture). It is a profound and (in my opinion) brilliant critique of one of the fundamental premises of those who then and now presume to have knowledge enough to plan a society and the lives of all of those in it.

We have often heard that when man looks out at the entire universe, he is made to realize how small he really is on this little planet revolving around one minor star among all the millions of them "in the heavens."

Hayek's point, in a sense, was to remind man that even in the context of only looking out at the world of human existence on this one planet of his, what he and his mind cam master is small in comparison to all the knowledge and complexity of that human condition in which he lives and shares with his billions of fellow human beings.

Reason may be his most valuable tool for living in this world. But one of the uses of his reason is to try to appreciate the limits of what his own mind can comprehend, master, and consciously control through political methods according to a central plan.

For this alone, Hayek stands as a giant among the great thinkers of the 20th century, an intellectual hero who went against the tide of his time.

Richard Ebeling

One can say that he did not know what he was talking about and one knows better, but in his "Why I am not a conservative," Hayek specifically identified himself as a "classical liberal," while also expressing the idea that the term "libertarian" did not apply to him.

BTW, while Rizzonian peace is nice and all that, is "Rothbardian anarchist" the appropriate label for folks associated with the Ludwig von Mises Institute who get all worked up about the horrors of immigration and homosexuality, how Churchill and Roosevelt were imperialists to fight Hitler in WW II, how the rights of Holocaust deniers are so very very important to defend, along with the rights of people in private communities to be able to keep people of color out of them? And, would Mises be all that pleased that such folks are associated with an institute bearing his name?


Your picturing of the Mises folk is, imo, a little bit of. Again; using the principle of charitable interpretation.

"folks associated with the Ludwig von Mises Institute who get all worked up about the horrors of immigration and homosexuality" <= Yes, Hoppe is againt immigration in the status quo. In his book 'Democracy: the God that failed' he gave a set of arguments for it. _Other_ people from the Mises Institute have attacked him on this (e.g. Walter Block). I think there are some reasons to say that immigration (as it is now) has some down effects (in Europe, as far as I can see, worse than in USA due to a bigger welfare state). I don't take this as a argument to be against immigration (and the Hoppe argument isn't really that either), but there is no real problem in admitting that. I think the Hoppe argument is wrong, but he tries to reason from a consistent libertarian perspective.

Furthermore: as far as I know, the only person who has a 'strong' opinion on homoseksuality, associated with the Mises institute, is Hoppe. (Or can you point anyone else?) Mises University has a faculty of something like 20 people. One is hardly the majority, so saying that 'the mises institute' is against homoseksuality looks to me like a bridge too far. (In any case: the opinion that Hoppe has on homoseksuality - albeit wrong, I think - is far more nuanced than 'it's a horror!' You can disagree with him, without having to attack a straw man.)

"how Churchill and Roosevelt were imperialists to fight Hitler in WW II" <= And their are (good) reasons to support this position. As a European (and a Belgian) myself, I think their are even some reasons to support this. I acknowledge (obviously) that this is a complicated issue, but I see no real reason to the level of violence uses by Roosevelt and Hitler. Just like any state action: it was inefficient and unjustified.

" how the rights of Holocaust deniers are so very very important to defend" <= Obviously, I don't deny the holocaust, but I've had a quarrel with a fellow libertarian on this too. 'Is this really so important?' While we may disagree on this, I think it is. Libertarians should not make exceptions: "Oh well, we are for free speech, but we don't mind it thát much if some speeches - which we don't like either - are illegal'. I think that's a dangerous position to have and therefore I do believe it's important to defend the rights of holocaustdeniers - even though I despise that opinion. (I would like to add that in some countries in Europe, like Belgium, it's even illegal to publish changes of the interpretation of some sort of minor details. 'Revisionism' is illegal too.)

"along with the rights of people in private communities to be able to keep people of color out of them?" <= If you believe in freedom of association, you also accept the freedom of disassociation. Whilest I, obviously, have no problem with different colour than mine, I can accept that other people do and don't feel any need to coerce them in living together with coloured people. I have no quarral with 'cosmpolitan' libertarians (I tend to be one of those anyway), but I have no quarral either with the more 'cultural separate libertarians' (you-know-what-I-mean). As see no reason to attack them, just because they think that people tend to favour more homogeneous association. What's the wrong in holding that opinion? :?

Furthermore: as far as I can see, you are lumping together strawmans together with a visions that require more nuance than you give it credit, and you are portratting minority visions as 'the' folks at the Mises insitute. of course, it is easy to attack such a vision.

I don't know if Mises would have a problem with it. Maybe he would disagree with some opinions, but he also disagreed with Rothbard and Hayek and he had no problem being associated with them. While you may criticize everyone associated with the Mises Institute (and Cato and all the others for that matter), there is no real reason to portray them as modern nazi's - as you seem t do, in my opinion. (Maybe I'm guilty of attributing you an opinion you don't have, but that is the feeling what I can get from reading your post.) They are libertarians. The only real difference - as far as I can see - is how people would want to associate in a free society. That's the main difference, from witch the different opinions come from. But that doesn't constitute a reason to thrash the Mises Institute in general, which does a fine job in spreading the literature on liberty, educating people, etc.

"how Churchill and Roosevelt were imperialists to fight Hitler in WW II" <= And their are (good) reasons to support this position."

<= And 'there are'. Of course. (Other mistakes are possible, but this one was just to much.)


where did doherty advocate dichotomy? What he points to that there is a difference in theory and strategy (undeniable), that Rothbard himself saw such difference (undeniable), that Hayekians and Rothbardians see such difference (undeniable), but also that

"Hayek and Rothbard were both more than intellectuals; they were advocates. And while what they ultimately advocated was different, in the context of today’s world of improvident government growth and power grabs, the rest of the world isn’t so wrong in lumping them together for practical purposes. Both were great economic thinkers, and understood marginalism and the division of labor. In a world of different minds, in the social and intellectual change game, different sorts of arguments and different end points are going to work on different people and in different steps."

And he concludes that

"both tendencies survive is all for the best both for libertarian ideas and for the general shape of human intellectual and political history."

you would like two construct a 2-2-matrix allowing to interpret differences as matter of degree, not kind ("false dichotomy"). Doherty, however, is willing to accept both approaches even if they differ in kind! Thus, nothing to get frustrated about. BTW: as you might guess, within this false dichotomy, I side with Hayek and believe that the Rothbardian side is wrong in theory and strategically. Just to reveal my priors and biases.

Some reservations about Roger's imcomputability problem:

Even assuming that it is impossible to calculate the future course of events in some circumstances, it is not therefore impossible to predict the future. The former is a prediction *inferred* from some sequence of logical derivations, while the latter is merely a proposition concerning events that have yet to occur. The whole self-referential indecidable/incomputable prolem is one of logical inference -- not the existence of true or false propositions. To say that a central planner can't compute the right answer to a problem doesn't mean they won't get the right answer.

In any case, it seems to me the incomputability depends on an infinite back and forth action and reaction. But real humans have a limited capacity to play this russian doll game of thinking about someone thinking about them thinking about someone thinking about them, etc. At some point the game stops iterating. Granted, it significantly increases the complexity of the problem facing central planners (who have a difficult enough job when assuming that people don't react to their designs), but the problem wouldn't be mathematically incomputable.

A question for Roger (or anyone else). Can you specify one of the equations that can't be answered by planners, or just a plain old entrepreneur over at the local candy store?

If you can, I'll resign my membership in the Anarchist Antidefamation League. If not, I'll retract my belief that the financial blogger's remark about the existential impossiblity of predicting the future is of a piece with Roger's essay.

And a rejoinder to Barkley about Hitler, Churchill, FDR, and WW II: Hitler lost the Battle of Britain and cooked his own goose by invading Russia. A two-front war was a losing proposition even without the intervention of the US.

And I am also conferring Honorary Anarchist status on Roger and Barkley, at least for a day.


probably Hitler would have lost WWII even without Us intervention. A hybris has a short run by definition. But the freer part of the world would be smaller afterwards, as a German can tell, and the West may have lost the Cold War. Not that the soviet system could ever survive. But at its end, there would be no capitalist alternative in Western Europe, making transition by and large easier (by providing human and real capital, technological knowledge, rules of the game, etc.). But as a German I accept that we are ever since free-riding on US taxpayer's income. Sorry!

Unfortunately, I probably won't be able to give Lee Kelly and Bill Stepp good answers in a timely manner by blog standards. My holiday plans will keep me largely off-grid for a few days I expect.

They might look here for a helpful discussion:

"spostrel," who turns out to be Steve Postrel, just couldn't see what it was all about and, in fact, seems to have been dead certain I was making crude errors and completely off base. Maybe my efforts with Steve could help other doubters see what it's all about.

An ungated draft of a paper on such themes that I wrote with Barkley is found here:

It could be thought of as a sort of introduction to computable economics.

See also my review of Velupillai (ed.) in Journal of Economic Behavior and Organizaiton, 2008, 66: 837-847.


Do please read very precisely what I wrote. I said "folks associated with the LvMI," not "everybody" or "the Mises Institute." I am fully aware that the views I poked at are far from universally held there. I had two people in mind. One has been named; one has not. Quite some years ago Greg Ransom threw me off the old Hayek list for criticizing on these issues the unnamed person, so I am treading carefully on that one, but I have seen lots of people on this blog drooling all over that individual as somebody really praiseworthy.

Regarding the issues themselves, I happen to support the right of an academic to make somewhat critical remarks about groups in a classroom, although I might not be inclined to support that person's promotion if I were in their department. So, I was pleased that the AAUP defended Hoppe when gay activists demanded that he be fired for his relatively tepid remarks in some classrooms at UNLV (he has since made the issue moot by retiring, reportedly).

Of course we do not know what Mises would have necessarily said about all these issues, but he might have been less supportive of LGBT rights as most current libertarians are, a generational thing (and Hayek did gay bash Keynes).

I also happen to oppose laws forbidding denying the Holocaust, although the issue that had our still unnamed individual all worked up into a veritable frothing frenzy was the lawsuit in the UK against the Holocaust denier, Irving. Now, fine, but when someone such as this individual seems to be spending a great deal of time focusing on both how horrible Churchill and FDR were in fighting Hitler and also writing wildly intense defenses of Irving, and going a bit beyond his mere rights to say what he wants in doing so, but also defending the possible reasonableness of his arguments, well, sorry, this is not somebody I am going to admire at all. It creepily stinks.

I don't know what Mises or Hayek would have said about this individual's views, but they were both strong supporters of the anti-Hitler effort in WW II while it was happening.

BTW, there are degrees of rights here. I support the right of Irving to write and publish his books. However, I would have no problem with a history department firing from his job, just as I would have no problem with a math department firing someone who started insisting that 2+2=5 or a biology department firing someone who started declaring that creationism is right and evolution is wrong.

Regarding the people of color business, well, this gets back to the civil rights laws of the US. I am old enough to have actually been in civil rights demonstrations and am also the descendant of slaveowners and Confederate officers (and a collateral relative of an intense general), with parents born and raised in the Deep South, not totally free from those old views. So, maybe it is a personal thing. But when I read Barry Goldwater declaring that "property rights" were more important than "civil rights," I was not convinced. I realize others hold different views on this.

Two further comments. I do not doubt that "Rizzonian peace" is possible between more reasoable Rothbardian anarchists at LvMI and libertarians who are inspired by Hayek, which I think is the point of Steve's post. But, I was simply reminding that not everybody associated with LvMI is quite that reasonable, which may be why the point needs to be asserted.

Also on the computability issue, it does in practice indeed boil down to the "halting problem." In reality, both central planners (not that there are any left with any real power, now that markets seem to have taken over North Korea, more or less) and entrepreneurs essentially cut these processes short arbitrarily. This is where the element of "irrationality" or "animal spirits" or just plain old dumb inertia in the case of most of the central planners, comes into play. And, sometimes those decisions work out and sometimes they do not.

This discussion is heading in places that are not only far from the original point but that are also almost guaranteed to lead to trouble. Do not be surprised if I close comments if current trends continue.

O.K., let's get "real." We are not going to see either limited government classical liberalism or Rothbardian-type anarcho-capitalism in any foreseeable future.

The big government State will continue to be with us for all of our life times.

If some day, in the 24th century, liberty triumphs and the government has been reduced in size to the "nightwatchman state," it seems that then will be time enough to debate over if and how to privatize the nightwatchman.

Until then, there are very few of us who believe in and value individual liberty, the private property order, and the truly free market economy, while there are a lot of "them" who wish to maintain or grow Leviathan.

So why don't we each just respect the others, and go about our individual tilling in our chosen corners of the garden of liberty, as our respective philosophical and political conscience dictates to us?

I think we should try to do better than copy those on the left who spend (and have spent) so much of their ideological time arguing with and backstabbing each other over who is a "real" socialist or a "correct" Marxist.

If we do this, then maybe our critics are right when they sometimes accuse of being "cultists" and worshipers of a "faith."

Richard Ebeling

Indeed, Richard. One of the points of my post was to suggest the tent is wider than it might otherwise appear, with all sorts of criss-crossing influences and policy preferences that defy simple categorization.

The real enemy is not within, but without.

I read the paper by Roger and Barkley linked to above. One point stuck in my craw: their acceptance of Keynesian "animal spirits," with what that seems to imply for economic calculation. They cite Keynes' GT and that he "argued that 'propsective profit' cannot be calculated rationally, implying no rational basis on which to found investment decisions. And yet investment occurs...because investors are driven by 'animal spirits, a spontaneous impulse to action rather than inaction'...."
They go on to say that JMK thought that calculation is impossible and that therefore "animal spirits are the springs of action."

I've only skimmed a bit of the animal spirits literature, but what I've seen makes me think it has ignored a massive amount of evidence to the contrary, including both literature on capital budgeting, accounting, and investments, as well empirical evidence of what enterpreneurs and firms actually do in making investments.

And of course for Austrians rationalality or rationcination or reasoning means that all action, including investment, is purposive and goal directed. That doesn't mean hunky dory, or necessarily profitable in an accounting or economic sense. The best laid plans often go awry. But they are not founded on "animal apirits."
Does anyone out there know of any Austrian critiques of "animal spirits" or reviews of Ackerlof's and Schiller's book _Animal Spirits_?


Excellent post, but the conversation I fear has missed the fundamental analytical (not normative) point. The reason why Hayek is critical for anyone pursuing "anarchism" as a progressive research program (someone actually wrote a paper on this :)) is because he treats the framework as endogenous, not exogenous. Most of traditional economics sees the framework as exogenously given --- property rights well defined and enforced; monetary system operating effectively; courts and police, etc. But what if the problems we want to study are in fact the emergence and development of the framework itself (e.g., transitioning societies or failed and weak states). Also, the process of economic development (say why the west grew rich type question) is also about the framework evolving, not exogenously given to us.

Hayek raised these questions first among his peers. He was led to this, I have argued, because he was taken aback as to how those who treated the framework as given often lost sight of how essential certain aspects of the framework were to the operation of the system (e.g., the socialist calculation debate and in particular the model of market socialism).

Kirzner denies that you can have an economic analysis of the framework because economic laws emerge against the given backdrop of the framework. With all due respect to Kirzner, a generation of economists are disregarding his caution and applying economic logic to the situation of the emergence, evolution, and development of the framework.

Think of Hayek's intellectually radical statement that the state has corrupted the framework by corrupting money, the law, and morals.

In an all article of mine critical of Rothbard (from the 1980s), I actually argue that Rothbard suffers from his own form of legal centralism --- as he argues that a common legal/moral code of conduct is required. See his critique of Bruno Leoni's Freedom and Law from The New Individualist Review. Rothbard is a normative anarchist, but an analytical legal/moral centralist. This is why the concept of polycentricism becomes important for the "analytical anarchist".

BTW, when Tyler posted his varieties of liberalism on Marginal Revolution awhile ago, I wrote to him privately and said, Hey Tyler you are missing the use of Hayekian reasoning to make "anarchist" arguments. He wrote back --- "I anticipated you would raise this objection."


Rothbard did think that Hayek's theory of "spontaneous order" is excessively vague. And many adherents of Hayek's approach (myself included) would agree that it is under-developed. What are the conditions necessary for or conducive to the success of spontaneous ordering processes? Clearly, not all institutions "that serve the common welfare" (Menger) can evolve spontaneously all at once. For example, the Law Merchant could not evolve until at least basic property rights were secure. Most of the empirical analyses of spontaneous order so far are either fairly vague or ad hoc. By the latter I mean they do not make reference to a general theory with conditions, ceteris paribus clauses, and so forth.

Agreed Pete. In fact, I have also tried to make this point about how "the framework" can't always be treated as "external," rather it depends on the question we are asking. I did it from a Lachmannian perspective, but it amounts to the same point. Interested folks can find that paper here: .

Yes, Mario, this is why we need to embrace the concepts of "indeterminacy" (alla Hardin) and the "plea for mechanism" (alla Elster), and to work on spontaneous order theorizing that recognizes both "bright side" and "dark side" forces. This is one of the things I have been more closely associated with in the work with Dick Cornuelle (and Bill Dennis and Leonard Liggio) with the Fund for the Study of Spontaneous Order. See the special issues of journals that I have edited --- JEBO on the Ostrom's; Public Choice on Tullock; and more recently the forthcoming issue of Society on Peter Berger's work. In the fall we are hosting a conference on James Buchanan detailing his contributions to spontaneous order theorizing.

The "conditions" as you put it, I believe fall out of "institutional analysis" --- thus to fit the pieces together you have "rational choice theory" (a behavioral model of it) and "equilibrium theory" (a process model of it) and "institutional analysis" (a 'dirty' empirical version of it). Or to think of it more along Nozickian lines (see ASU section on invisible hand explanations) you have an animating force (purposes and plans), you have filter processes (institutional mechanism at work) and you have equilibrating tendencies (and the welfare implications). This style of reasoning is found in Menger, Mises and Hayek, but also in Schelling and Tullock and Buchanan and Coase and Alchian and Buchanan. It is NOT found in (at least not obviously in his scientific work) Friedman, Stigler, Becker, Lucas, etc. Or at least that is what I would argue is the case.

Steve and others,

I actually don't think Don Lavoie was on this issue. He was more or less a normative anarchist, who sought to provide Hayekian reasons for Rothbardian conclusions. But he also was more of a "rights thinker" than the work on endogenous rules. See his argument in National Economic Planning: What is Left? This is the way I started by approaching these issues --- see my chapter in Why Perestroika Failed on Charting a New Course. That was a Lavoie inspired chapter.

But going back to graduate school, I was also interested in the endogenous rules work. If you look at one of the "In the Journals and On the Shelves" columns that I did for Market Process, I focused on these issues and discuss a paper by Ulrich Witt on the evolution of rules, work by Robert Frank, and others relevant to this style of work. Then there was the empirical work that all came out around the same time (circa 1988-1990) from Benson and also Avner Greif (and of course Janet Landa, Lisa Bernstein, Anderson and Hill, Karen Clay, etc.).

So I think the Lavoie project moved to a more empirically based project that provided the actually history of how rules evolved and came to be enforced by actors outside of the state. My interest in this started with studying "black markets" in the Soviet Union (which I got from my understanding of the Austrian critique of socialism and the study of Soviet reality guided by my teacher Michael Alexeev and the literature he pointed me toward). The idea of seeing a system operate different from what the official system claimed how it was working was a huge idea for me --- and then I saw that Mises made a similar argument with respect to monetary systems --- in his critique of state theories of money, and his embracing of de facto monetary systems. The question now becomes scalability, not existence --- and how, not whether.

Anyway, I have been amazed that so few within our supposed camp don't seem to understand this project when they look at the work of Stringham on the one hand (mechanisms of exclusion from clubs) and Leeson (mechanisms of inclusion in the process of social cooperation). It is not Rothbardian, it is not Lavoie-inspired Hayekian Rothbardianism, it is something new --- Hayekian analysis of the Misesian proposition concerning social cooperation under the division of labor is perhaps the best way to think about it (but even that isn't quite right). BTW, in my paper on Hayek and cultural evolution in Cultural Dynamics (1990) I actually make this suggestion that it is this Hayekian analysis of Misesian proposition of Ricardo's Law of Association where progress will be made -- so I guess I have been pushing this line with my students for awhile. But I didn't make as much progress as I would have liked and my statements remain more suggestive than substantive contributions. At least that is how I would critically look at it.

Is there even a dichotomy between mainstream and Austrian economics?

To Mario's post in particular: Richard Pipes has a positive account of how rights to real property emerged. When members of a group (tribe) accepted the inheritance of real property down hrough family lines, that was the beginning of property rights as we know it. There was perhaps an element of power at first, but eventually might made right.

What is, often becomes what is right. Interestingly, after his first visit to Russia after the end of the Societ Union, Jim Buchanan excitedly told me that he had completley changed his views on the emergence of property rights. Seeing the process at work in Russia, he said it could only happen in a Hayekian fashion: rights emerged from the brute force of reality. No constitutional agreement.

Law Merchant dealt, of course, with trade in goods and commerce. That is different than real property law. It's a distinction that Hayek does not focus on.


Thanks for your comment. Now I get a clearer view on what you are saying - and I understand your position as well as your person. We have (and we never had - imo) no quarrel. :))

Does anyone know if recordings of Hayek's debate with Marriam exist, and if so, of any plans to release them in a downloadable format?

Eric: a transcript more or less can be found in *Hayek on Hayek* I believe. I don't have my Hayek here at home to double check.

I had thought that Lavoie wasn't even a minarchist! I could have sworn I heard him endorsing certain liberal policies that libertarians & conservatives would denounce. I also thought that Barnett no longer considered himself an anarchist (why would an anarchist support the invasion of Iraq?).

Rothbard always considered himself an acolyte of Mises, so we might call him a "Misesian anarchist" just as Roy Childs was a Randian anarchist. Neither Mises nor Rand were anarchists, so a Hayekian anarchist would be no odder!

"Consequentialist anarchist" might not be the best term, most people would associate that with David Friedman. Either Rothbard or Block criticized Friedman for not "hating the state" enough. They said that in addition to minarchism vs anarchism there was an issue of radicalism, and while DF was anarchist, he wasn't radical (David concurred with this assessment). Perhaps "organic anarchism"? Per Bylund had an essay at Strike the Root criticizing anarcho-capitalists who have developed some intricate system of how the coming anarchy will be. He calls that "blueprint anarchism". The (quite anti-capitalist) anarchist Bob Black wrote about something similar in "My Anarchism Problem".

I should say "heard of him" instead of "heard him". I'm in my early twenties and never met any of these people.

I just had a seance with Lysander Spooner. He mentioned in no uncertain terms that anyone who supports the Constitution of the U.S., as Barnett does, cannot be an anarchist.


Don Lavoie was a very committed radical libertarian. I worked as his TA/RA and I wrote my dissertation under him. I was very close to Don personally and professionally -- you can read my tribute to him at his memorial service online. Don had a great influence on a number of students at GMU in the 1980s and 1990s -- Dave, Steve, Emily, and Virgil are just a few, but there were many others who have contributed greatly to radical libertarianism and the teaching of Austrian economics.

I recommend you read Don Lavoie's National Economic Planning: What is Left? (Cato, 1985), as well as Rivalry and Central Planning (Cambridge, 1985). Don wrote several other essays which laid out his vision of truly free society.

It was never Don's political position that caused concern among some Austro-libertarians, it was his philosophical stance. Don was a post-positivist who relied on arguments from post-modernism to make his case for post-positivism.

The modern history of Austrian economics and of libertarianism has yet to be written as much of the history has been written to date by parties choosing one side or another, rather than a more "objective" assessment of the arguments presented, the implications, and the sociology of this sub-culture in economics and social theory. Don Lavoie, in particular, gets a very shabby treatment and thus those of us who were close to him often are compelled to correct the record on this. But the false rumors persist. The fact that someone such as yourself could believe that Don actually held policy positions which libertarians would object to is shocking -- to be clear this is a man who was anti-war, anti-drug war, anti-public school, anti-central bank, in favor of radical decentralization, free trade, and free thought, and of course anti-central planning, and anti-interventionism. Don Lavoie was an anarchist - normatively (rights theory) and analytically (decentralized systems).

Discussion of "inclusion" and "excusion" mechanisms and other membership issues can found in Hayek's _Fatal Conceit_.


Glad that I was able to clear things up. I apologize to Steve for sort of opening up a can of worms that is probably best left closed. Let the reasonable Hayekians deal with the reasonable Rothbardians and ignore the others.

Pete is saying a lot of interestng things.

Bill S.,

Well, Roger is someone who has written critical things about animal spirits, so maybe he should answer you. I would argue that just because there is an irrational, or more accurately, emotional, element to animal spirits does not mean that they are not purposive or goal directed. It means that all those things you alluded to, such as capital budgeting, are all based on guesses that cut short a fully rational analysis. In the end, the decision to invest involves emotions, some gut element that inspires or supports the making of the decision to act.

Let us keep in mind that the overwhelming majority of attempts to start new businesses fail. Truly rational individuals would not even bother to try. Those who succeed, of course convince themselves after the fact that they succeeded because they were so smart and wise and farsighted, when in fact a huge amount of luck was involved, that the estimates made turned out to be not too far off, or things worked out even better than they suggested, although smarter people are more likely to succeed than those less smart, even as we all know that many successful businesspeople operate on "instinct" or "intuition," however much intellectual analysis of guesstimated capital budgeting has gone on prior to their decisions.

And, most new businesses are entering markets where there are a small number of other serious competitors, so all their estimates are based on assumptions about how those will react and how the entrepreneur will react to them, and... well, there we go into the infinite regress without a necessary halting. Hence, those who act cut it short, which may be done by simply accepting some arbitrary set of estimates that then become the basis for the decisions and action, although in the end, the action still takes some emotional oomph to get it going. That is where the animal spirits come in.

What is the purpose of the Austrian movement today?

I ask this as a serious question. It is no longer (and I would argue never really was) based on "fundamentally different philosophical foundations" from mainstream theory. Beyond that, it has a novel business cycle theory which has never been adequately backed up by evidence. Hayek's discussion of knowledge is thought provoking but many people who don't call themselves Austrians appreciate this. Rothbard, besides sparking some interest in Mises and libertarianism in general, contributed little to economics proper.

Where is this all going? When I see George Selgin, a self-proclaimed Austrian, agreeing wholeheartedly with Scott Sumner, someone who claims to be an advocate for cutting edge mainstream theory, I wonder. Is Austrian economics now mainstream or is it no longer relevant?

I am not a troll, but simply a frustrated student who has become disillusioned with the movement that brought him to economics.

George Kerevan is the comments editor of the Scotsman newspaper and is the Scottish National Party's prospective candidate for the Edinburgh East constituency in the forthcoming British general election.

Mr Kerevan once (spontaneously!) described himself to me as a "Hayekian anarchist".

Nicely put, Steve. I would add only that sometimes we get too wrapped up in making fine-grained distinctions among ourselves rather than focusing on a critical central message: People are better off when their freedom is maximized. Most folks I talk to recognize this principle but fear anarchy. The more we articulate sensible and compelling arguments for more liberty, the more people will start realizing that we do not have to settle for a government that is strangling us all. Put another way, we spend too much time convincing each other and not enough convincing others.


I agree that luck and emotion are part of the business environment and operating a business.
However, if I understand you correctly, you seem to think (with the behavioral economists) that rational action or rational decision making is inconsistent with luck and emotion. Thus a business owner whose startup turns a profit thinks he did it because he was smart and ignores other factors, luck, etc.

I completely disagree with this. Most people don't deny that these other things play a role. As for your claim that most businesses fail, so that "truly rational people would not even bother to try" to start one, again I disagree.
I think the problem is what you mean by rational. For me, it simply means someone who uses reason or ratiocination. It doesn't mean that decision making is necessarily good, or that people don't make flawed decisions sometimes, even a lot of them.
If I fail to solve a math problem, it doesn't mean that I'm irrational. It just means I made a mistake or didn't understand how to solve it.
Btw, my candidate for one of the worst books ever is _Predictably Irrational_, even though it was exceptionally well written.


You should read The Economics of Time and Ignorance by O'Driscoll and Rizzo. Available free in my office.

I'm online for a few minutes, which gives me a chance to address issues from Lee and Bill.

Lee: what Barkley said. If you are predicting the future through a process that contains a large arbitrary element, it may or may not work out. In a market context, that's okay because we have an ecology of entrepreneurial forecasts and visions. In a policy context, we must rely on one Big Player epistemic monopolist, which creates the risk of inefficiencies that are significantly larger than those of a "free market."

Bill: See also my recent post @ ThinkMarkets:
My post neglects to mention Dick Wagner's "entangled political economy," which matters here. The issue is whether the animal-spirits tail wags the real-economy dog, and my answer is that is depends on the policy regime. Keynesian policies create a Keynesian economy.

Jake: You gotta take the truth where you find it, so we don't have any taboos against mainstream economics, which has indeed come around to a much more Austrian character than it had when I started grad school in 1980. Austrian economics is still very much worth the effort, however, because of its unexploited riches. The Mises Circle was incredible and it repays the effort hugely to explore that tradition. In particular, I think it's hard to really get the Hayek's full epistemic vision, which ramifies deeply. An immersion in "Austrianness" helps to bring Hayek home and is therefore, again, worth effort IMHO.


My only comment beyond Roger's at this point is that I would say that some degree of intelligence or knowledge is probably necessary but not sufficient for entrepreneurial success. Those who make it are substantially the beneficiaries of fortune (luck), but those who propose or plan to do ridiculous things will not make it, such as assuming that one will be able to send things from one place to another at faster than the speed of light, just to pick an extreme example, although someone might in effect make such an assumption through poor logistical calculations.


First, why do you say there isn't any radically different philosophical foundation? I can infer that you got this line from my colleague Bryan Caplan. But perhaps you have come to it yourself. I would argue this is false. As I stress to my PhD students it depends on what word in the phrase Austrian Econonmics you want to emphasize. If you emphasize Austrian, then there are a host of philosophical and methodological issues (and intellectual/historical context). If you emphasize Economics, then you will focus on various different analytical positions related to subjectivism in values, knowledge, and expectations; to heterogeneity of capital goods that have multi-specific uses; to the role of time in economic activity; to the role of entrepreneurship and the market process, etc.

Those who emphasize Economics are trying to find ways to relate their work to other economists; those who emphasize Austrian are either trying to relate their work to other continental philosophical traditions in the social and cultural sciences, or emphasize the internal development of the school from Menger to today.

As a teacher of PhD students, I have emphasized Economics to my students, but I try to make them aware of the Austrian. But the reasons for that decision are very specific to the broader issues of the economics profession, etc. But my professor Don Lavoie emphasized the Austrian part, and thus we studied philosophy with him and other continental philosophers (at GMU, but also from U of Maryland and Catholic as well) and the philosophy of science debates of the day. Personally, I think this education served me very well, but I also think the intellectual context has shifted drastically from the 1980s to the 2000s.

Why someone cares about philosophy is that it determines not only what are considered good questions, but also what are acceptable answers. A lot of people think they can do scholarship without taking a philosophical stance, but this is wrong. See Daniel Dennett's Dawrin's Dangerous Idea where he points out that science is never done devoid of philosophy, the choice is really between a well understood philosophical position, or an implicit philosophical position that is brought on-board unconsciously.

Austrian economics is definitely based on a different philosophical foundation from the standard neoclassical economics dominated by formalism and positivism. If for formal tractability we have to model economic activity not as a process, but as a state of affairs, then we have lost sight of the essential elements of how the market actually works. If for positivist reasons we have to work only with that which is measurable, but much of economic life comes in a form not so readily measurable, then focusing on measurement misses the non-measurable but essential components of economic life.

Now let me take up just a few of your final claims on the wide acceptance of certain Austrian points. First, let me state clearly --- for those of us involved in Economic research our goal is for our ideas to become mainstream. I make a distinction in my work between mainline and mainstream. The ideas of Mises-Hayek are definitely mainline, but they have not often been mainstream. But obviously that is what we are trying to pull off. Nobody wants to be a lone wolf howling truth in the backwoods. But you claim that all the unique Mises-Hayek points have been accepted into the mainstream if they are any good. Now, let me say that there has been a great amount of progress in economics in the direction of Mises and Hayek. And there is a large contingency of slightly out-of-sync economists who share many analytical points with Mises and Hayek: Alchian, Buchanan, Coase, Demsetz, Easterly, Frydman, Greif, Hardin, Kuran, Leijonfvud, Milgrom, North, Olson, Ostrom, V. Smith, Tullock, Williamson, etc. Some of these thinkers have earned Nobel prizes, all have achieved professional acclaim. But none are in the same mainstream royalty as that of Becker, Friedman, Lucas, Samuelson, Stigler, Solow, etc.

But yes certain aspects of Mises-Hayek have penetrated the ideas of property rights, organizational economics, experimental economics, coordination macroeconomics, and rational choice political science. Let me give two examples from books that have recently been published -- -Roman Frydman's Imperfect Knowledge Economics; and Russ Hardin's How Do You Know?

Both books are very much influenced by Hayek's ideas and develop them in their own way.

This is progress. But for a full understanding of what Mises-Hayek were up to in their work I'd say that you'd have to see their work in full -- philosophical perspective + analytical points. This project still has much to offer those in the social and policy sciences.

I guess at this point, I would just suggest you take Mario up on his offer and get a copy of The Economics of Time and Ignorance.

I find Pete's analysis of the neoclassical mainstream instructive. His phrase, the "mainstream royalty," is especially suggestive.

There is always dissonance in orthodoxy, and Ludwig Lacmann in particular always wanted to exploit that by finding strategic allies. I always found him strategic in his outlook. My sense is that Don Lavoie was influenced by him in that regard.

In macro, I have observe that one school tends to be dismissive of the evidence offered up by the others. (Check out Peter Temin's review essay on RBC in the Sept. 2008 JEL.) Nothing special about ABCT here. Macro is in disarray, despite the self-congratualtory terms in which it is trumpeted by the mainstream royalty.

David D. Friedman's anarchism is also closer to Hayek than to Rothbard.

Unless Jake McCloskey is referring to some of my grad-school juvenalia, he will be hard-pressed to justify his reference to me as a "self-proclaimed Austrian." In truth I long ago jettisoned the label, not to be sure because I no longer draw inspiration from the great Austrian economists, but simply because it's confining to belong to any "school." (For one thing, it puts one in a position of having to defend oneself against the charge of heterodoxy!)

McCloskey is equally unjustified, I think, in suggesting that Scott Sumner is somehow a representative of run-of-the-mill mainstream thinking. No one I imagine would be more surprised by that assertion than Scott himself.


You have repeatedly made this point. But I am curious to know who YOU think the self-proclaimed Austrians are. Nothing in your work or your demeanor is that much different from the way Larry and Mario have professionally behaved, nor how Steve and I have behaved, nor how my former students Pete and Chris have behaved. Yet in some sense we are all identified by others as "Austrian" (and criticized by some within the Austrian camp as not sufficiently Austrian).

So I am interested to know who you consider to be the individuals you are running away from --- Mises, Hayek, Kirzner -- who? White, Rizzo, O'Driscoll, Garrison --- who? Leeson, Coyne, Stringham, Powell -- who?

BTW, you are not alone in wanting to get beyond the restrictions that the label sometimes brings with it.

Anarcho-Capitalists should stay close to their Austrian brothers, because the rest of the Anarchist movement sure doesnt want them. Anarchists are not merely anti-state, but against concentration of all forms of power and hierarchy, which means that boss-worker relationships should be torn down in favor of more egalitarian union or cooperative enterprise....where responsible positions are elected and on regular rotation if they must exist at all.

Ancaps are widely hated by the rest of the Anarchist movement, and for good reason. Rothbard was an ideological abomination, advocating that child abuse and allowing children to starve to death as punishment was perfectly proper and ethical. The people who look up to this guy are generally bad people who should be shunned by rational society, and should seek the protection of those who will have them.......Ancaps are not even accepted by Anarchists, so I dont see how they can afford to isolate themselves from other Austrians or pretend to be more elitist by pretending to be Anarchist.

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