The Professional Strategy of the Early Austrian Economists

2 July 2009 at 3:26 am 7 comments

| Peter Klein |

O&M, like other niche academic blogs, deals occasionally with the history and sociology of this or that school of economic or management thought. We think often about professional strategy — how to promote our ideas, how to secure financial and institutional support, how to recruit students and fellow-travelers (“groupies,” according to Nicolai), what competing and complementary movements and schools of thought (not to mention rival blogs) are up to, and so on.

Given our close association with the Austrian school, you might be surprised to learn that the founding Austrians were not at all “strategic” in this sense. They held strongly to the view that truth wins out in the long run, so there is no need to build formal institutions or establish a “movement.” This comes out in a passage from Mises’s recently released Memoirs (a new translation of his earlier Notes and Recollections):

It is necessary to correct the misunderstandings that can be called forth by using the expression “Austrian School.” Neither Menger nor Böhm-Bawerk wanted to found a school in the sense customarily used in university circles. They never attempted to turn young students into blind disciples, nor did they, in turn, provide these same students with professorships. They knew that through books and an academic course of instruction they could promote an understanding suited to dealing with economic problems, thus rendering an important service to society. They understood, however, that they could not rear economists. As pioneers and creative thinkers, they recognized that one cannot arrange for scientific progress, nor breed innovation according to plan. They never attempted to propagandize their theories. Truth would prevail of its own accord when man possessed the faculties necessary to perceive it. Using impertinent means to cause people to pay lip service to a teaching was of no use if they lacked the ability to grasp its substance and significance.

Menger made no efforts to extend favors to colleagues that would be reciprocated with recommendations for appointments. As minister and then ex-minister of finance, Böhm-Bawerk could have used his influence; he always spurned such behavior. Menger did make occasional attempts, without success, to prevent the promotion of those, for example, Zweideneck, who had no sense of what was going on in economics. Böhm-Bawerk made no such attempts. In fact, he advanced rather than hindered the appointments of Professors Gottl and Spann at the Brünner Technische Hochschule.[8]

Menger’s position on such questions is best illustrated by a note discovered by Hayek while perusing Menger’s scientific papers. It reads, “In science, there is only one sure method for the ultimate triumph of an idea: one should allow any contrary notion to run its course completely.”

See also Joe Salerno’s piece on economics as a vocation, not a profession. What do you think — how important  are the professional trappings of an academic “movement”?

Entry filed under: - Klein -, Austrian Economics, Methods/Methodology/Theory of Science, People.

Does Macroeconomic Theory Influence Macroeconomic Policy? Scott Shane Blogging at the NYT

7 Comments Add your own

  • […] austríaca, metodologia econômica trackback Interessantíssimo texto do Peter Klein. Reproduzo um trecho. It is necessary to correct the misunderstandings that can be called forth by using the expression […]

  • 2. Vedran  |  2 July 2009 at 8:28 am

    Great Post!

    I think that a lot of Austrian Economists make the mistake that they assume since Hayek, Mises, and the gang have it right on economics, they must also have the answers as to spreading the message. But this idea is really ridiculous.

    You read Hayek to find out what you should do policy wise, but you don’t hire the guy to be your campaign manager. You hire someone like Frank Luntz to help you out with that.

    Also, there is the sacred cow of all think tanks and academia that good ideas have consequences. But you look around the world and it’s just blatantly not true.

    And lastly, spreading the movement through academia is treated like magical fairie dust. Just write in academic publicatioins and then this magically filters to the rest of the population and you are saving the world by writing in places that no one reads. This is just plain delusional.

  • 3. Rafe Champion  |  2 July 2009 at 9:11 am

    People tend to do what they like and also what they are best at doing. Perhaps the great Austrian scholars liked scholarship too much to do propagand and promotion.
    We have to trade off between what we like, what we are best at and what most needs to be done; happy the person who finds that the three things coincide.
    With more Austrians and fellow trvellers there is scope for more division of labour. Just recall, before about 1970 you could have thrown a blanket over most of the Austrians in the US.

  • 4. Shawn Ritenour  |  2 July 2009 at 10:00 am

    I would also recommend Joseph Salerno’s article, “The Rebirth of Austrian Economics–In Light of Austrian Economics,” in the QUARTERLY JOURNAL OF AUSTRIAN ECONOMICS, Vol. 5, No. 4, pp. 111-28. It is available on-line here: Salerno compellingly argues that capital and institutions are vital for the progress of an intellectual movement.

  • 5. Michael F. Martin  |  2 July 2009 at 1:47 pm

    As somebody who works with inventors and firms protecting intellectual property, it is completely unsurprising to hear that the folks who came up with Austrian theory were not the same folks who spread it. Inventing and entrepreneurship require different sets of cognitive skills and experiences for success. Although VCs tend to downplay the importance of ideas, I see this as an artifact of the trickle of good ideas relative to the flood of willing entrepreneurs, not an invariant truth about the importance of ideas relative to action in general. Theory and experiment are part of the same feedback loop that produces innovation. But at the level of complexity we’re at now, there is and must be a division of labor between the two.

  • 6. Josh  |  2 July 2009 at 6:09 pm

    Interesting post. Coincidently, I stumbled upon an AJS paper arguing that Austrian scholar networking in Eastern Europe helped the transition from communism to markets: Johanna Bockman and Gil Eyal – “Eastern Europe as a Laboratory for Economic Knowledge: The Transnational Roots of Neoliberalism”

    Using Latour’s concepts of “actor-network” and “translation,” the authors show that neoliberalism’s success in Eastern Europe is best analyzed not as an institutional form diffused along the nodes of a network, but as itself an actor-network based on a particular trans- lation strategy that construes socialism as a laboratory of economic knowledge. They argue that socialism was made into a laboratory of economic knowledge during the socialist calculation debate of the 1920s and 1930s. An extensive debate during the Cold War is also documented and shows that a transnational network continued to be organized around attempts to connect the results obtained in the socialist laboratory with debates and struggles in Western econom- ics. Finally, the drafting of transition blueprints in postcommunist Eastern Europe after 1989, with the participation of American econ- omists, is shown to be a continuation of this transnational network.

  • 7. Richard Ebeling  |  3 July 2009 at 8:54 am

    I would just mention that the senior members of the German Historical School were far more “movement oriented.” Gustav von Schmoller, for example, a leading member of the Historical School, used his influence with the Imperial German Ministry of Education to see to it that members of the Austrian School (after they began to appear on the scene in the 1880s and 1890s under the influence of first Menger and then Bohm-Bawerk and Wieser) were basically blackballed from any opportunity for a teaching position in German universities. A number of historians of economic thought have drawn attention to this.

    Menger and Bohm-Bawerk would occasionally attempt to help their colleagues. Bohm-Bawerk’s appointment at the University of Innsbruck was partly due to Menger’s support, and the same applied to Wieser’s appointment at the University of Prague.

    Bohm-Bawerk, in turn, assisted Schumpeter in getting his first couple of academic appointments.

    But, in general, the German historicists were far more “strategic” in this sense than the Austrians in the late 19th and early 20th centuries.

    Richard Ebeling

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