Omissions and biases are perhaps unavoidable in such papers, as we tend to focus on our own research interests. Hayek, whom Peter Klein quotes in fn 1, has himself changed his mind about what is the most important contribution made by Austrian economics. In his early writings, he wrote that it was marginal utility; then, it was subjectivism and price theory a few years later, it was the theory of institutions, and finally, as Peter quotes the theory of complex phenomena. His reading of the ‘essence of the Austrian contribution’ evolved with his own research interests!

Thanks for the plug.

Danny Kenny,

Austrian Capital Theory is a fascinating field to study, and the best person on this is Ludwig Lachmann. I would go to a library and check out “Don Lavoie, ed. “Expectations and the Meaning of Institutions: Essays by Ludwig Lachmann.” Please read the essays: “On the Measurement of Capital,” “A Note on the Elasticity of Expectations,” and “Investment Repercussions.” After that, you should be very knowledgeable about Austrian Capital Theory. The Capital Theory chapters in Lachmann’s earlier (1977) book “Capital, Expecatations, and the Market Process” are also very good, and can be purchased from Amazon relatively cheaply.

Pete Boettke,

I think Professor Klein is right. Reading the work of Fetter and Wicksteed is very different from reading the work of more contemporary Austrian scholars. Your objections to the contrary strike me as an assertion only. I would like to see a more focused treatment of Austrian price theory be developed by young Austrian scholars. The most important work that has been done recently is the book by Esteban Thomsen, and that is applied Kirznerian entrepreneurial theory more than theoretic price theory. I think Professor Klein is right on in this matter.

Brian Pitt,

I am glad to see that someone out there appreciates Vaughn’s book. I think it is excellent and should be required reading for every young Austrian. However, I have criticized Klein’s interpretation of her work here: http://blog.mises.org/archives/008739.asp
You and others might find this discussion interesting reading.

I must say that I was quite impressed by this paper. Aside from the ommissions of the developmental work being done by Mercatus scholars, this was just a beautiful paper.

I will note, however, that I believe that Market Process theory IS consistent with Misesian Price Theory. Not only is this seen in Human Action, it is seen in the Epistemological Problems of Economics (63-65). Nevertheless, I am glad to see Vaughn’s work featuring prominently in your paper; she seems not to make it to the reference lists of many Austrian papers.

I respectfully disagree. The applied work in economics and political economy IS very influenced by Wicksteed, Mises and Rothbard, less influenced by Fetter, Davenport and Clark (though not ignorant of it).

Rothbard is a major influence in all of this work and yet that fact is often pushed aside — including the influence not only of Rothbard’s social theory, but his particular approach to economics. Mises’s influence is throughout the works I would argue.

But I guess we can disagree on this and debate the issues in other forums. I think your paper is very well written and I hope widely read.

Pete

Thank you, it works now and thank you for the other reading.

This is a well crafted paper, but I also think your argument has some omissions in it. First, you don’t consider the mundane work that people on your list of those I guess doing esoteric work have done. There is not only a division of labor, but also phases in people’s careers. I am the author not only of methodological writings and history of economic thought, but also applied work in political economy in the fields of economic history, comparative systems, and development economics. Including 3 books on the history, collapse and transition from socialism. And those works employ arguments developed in the fields of money and capital, market theory and the price system, and the dynamics of interventionism, etc. And if you look at my students at GMU, they have done much what you call mundane economics as well as esoteric economics. So the world of Austrian economics is a lot different today than it was in 1994, but I don’t think your paper captures that.

Second, market process theory need not be a theory which rejects equilibrium analysis. But I think to argue that Misesian price theory is not market process theory forgets Mises’s own words — he states explicitly that the “market is a process” in Human Action. Step-by-Step method, Mises has described in a letter to Hayek from 1940 (see the paper by Coyne and myself on this) is process analysis and also owes much to the Swedes.

Third, I do think your paper is well written and tells a certain narrative. But fundamentally I think the omissions — not just of the work associated with me, but Horwitz’s work on monetary theory, Lewin’s work on capital, Prychitko’s work on workers’ self-management, Machovec’s work on competition theory, Ikeda’s work on interventionism, Sautet’s work on the firm, etc. — lead to a stilted narrative.

Fundamentally, I am in very strong agreement with your call for doing economics. I do think the history of ideas is an important subfield, and I do als think methodology is VERY important, but I agree that mundane economics should be the main thrust of our teaching and research endeavors. But I am not sure that your narrative does justice to the efforts in this direction, and because you don’t address these works head on, you are unable to provide the criticisms of the weaknesses in this existing literature so that new work along these lines will move forward rather than spinning wheels.

Pete

There are many good books and articles on Austrian capital theory, references to which are included in the FFKK paper linked above. Hayek, Lachmann, Rothbard, Kirzner, and more recently folks like Peter Lewin have made important contributions to the field. The list at

http://mises.org/literature.aspx?action=subject&Id=10

is also useful, though perhaps broader than what you’re looking for.