Austrian Economics in Transition

16 September 2010 at 2:11 pm 6 comments

| Nicolai Foss |

The Austrian School of Economics continues to provide grist for the doctrinal historian’s mill. New interpretations are developed. Forgotten manuscripts by prominent Austrians are still being discovered. The discovery of the Mises archive about a decade ago by Jörg Guido Hülsmann comes to mind. I recently had the pleasure of reading four hitherto unpublished Hayek papers (including his talk at Cambridge in 1931, immediately before the lectures at LSE that became Prices and Production, that Joan Robinson later described/dissed in this manner, referring to a question by Richard Kahn: “Is it your view that if I went out tomorrow and bought a new overcoat that would increase unemployment?” “Yes,” said Hayek, “but,” pointing to his triangles on the board, “it would take a very long mathematical argument to explain why”).

Many of those who have done important work on the history of the school includes committed contemporary Austrians (e.g., Joe Salerno, Roger Garrison, Richard Ebeling, etc.), but very substantial research has also been contributed by economists who may may not consider themselves Austrians (this includes many European  scholars, such as Hansjoerg Klausinger, Meghnad Desai, Rudy van Zijp, Jacb Birner and many others). This evening I had the opportunity to browse Austrian Economics in Transition, which is an example of this kind of doctrinal history scholarship. The book is edited by Harald Hagemann, Tamotsu Nishizawa, and Yukihiro Ikeda, and was published a couple of months ago by Palgrave MacMillan. It is a collection of essays, 16 in total, by European and Japanese scholar, originating from a conference on Menger in Japan in 2004, and addressing the history of the Austrian School until approximately the end of  World War II. 

So far, the contributions seem relatively incremental , and I don’t think any are on the level of importance for our understanding of the School of, say, Salerno’s dehomogenizing of Mises and Hayek (my further reading may change this impression, though). Among the highlights: Yukihori Ikeda discusses Menger’s liberalism, and argues (based on the Rudolf lectures and Menger’s lectures on public finance) that Menger was less inclined towards what we would today call libertarianism than most later Austrians. There is an interesting piece by Keith Tribe on Weber and the Austrian School. In the most technically difficult of the papers, Arash Molavi Vassei strongly criticizes Mises’s interest theory and his business-cycle theory, faulting Mises for several logical errors. Hansjoerg Klausinger contributes a note on the Österreichisches Institut für Konjunkturforschung for which Hayek and Morgenstern served as the first two directors. Clearly something I can recommend for those who take an interest in the history of the Austrian School, but not a set of contributions that I think will decisively rock the boat.

Entry filed under: - Foss -, Austrian Economics, History of Economic and Management Thought.

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6 Comments Add your own

  • 1. joshmccabe  |  17 September 2010 at 4:18 pm

    Nicola, could you give us a summary of Keith Tribe’s chapter on Weber?

  • 2. Rafe  |  18 September 2010 at 12:13 am

    The 2009 conference of the History of Ec Thought Society of Ausralia HETSA had a stream of papers on Austrian Economics. The abstracts and pdfs of the papers are here

    Japanese authors are prominent, presumably due to the Menger Library books that ended up in Japan. Who got his fishing rods? Maybe the Japanese got them as well.

  • 3. Rafe  |  19 September 2010 at 5:48 pm

    Bruce Caldwell delivered a crushing rejoinder to Salerno’s take on Mises and Hayek. If you ask him nicely he will send it to you.

    Pete Boettke has a piece on the way the Weber/Austrian connection broke down, he blames Durkheim, Talcott Parsons and the myopia of the Austrians who focussed too narrowly in economics and lost track of the bigger institutional picture.

    Click to access rational_choice.pdf

    On points of detail, I think Durkheim was not so bad and Parsons was ok in TSSA 1937 and then went bad. Parsons of 1937 plus Popper and Mises in their work at that time had the elements in place required to keep the big picture focussed but then something went wrong.

    Boettke et al have a nice story about the loss of the institutional elements that have been regained in recent times, like re-inventing the wheel.

    Click to access 2008%20The%20Evolution%20of%20Economics,%20Long%20Term%20View.pdf

    Don’t miss Mario Rizzo calling the Austrian troops to the barricades.

  • 4. Peter Klein  |  19 September 2010 at 7:34 pm

    Rafe, I think you’re talking about this one:

    I wouldn’t call it “crushing,” though Bruce makes some interesting points. See also Salerno’s rejoinder:

  • 5. Rafe  |  19 September 2010 at 11:42 pm

    Thanks Pete, Bruce’s reply looked strong and I have not had the opportunity to read the counter-argument.

  • 6. liberty  |  21 September 2010 at 12:17 pm

    I would love to hear an Austrian and Keynesian discussion on Hayek’s response to Kahn’s question. It sounds as if he was conceding the Keynesian aggregate demand point …

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