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Modern Austrian History: A Response to Pete (Part 1)

August 7, 2009

Over the past few years there has been an ongoing and productive dialogue over the viability of alternative strategies available to young scholars seeking to pursue a vocation in Austrian economics in academia. While there have been disagreements, most parties to the conversation have treated their opponents’ positions with respect and scholarly restraint.

I and others have encouraged the view that Austrians need to think of their career choices in light of their fundamental vocation. Those choices may or may not involve managing one’s professional choices precisely according to a preset program as required by academic conventions. As part of this, I have suggested a new strategy in which young scholars, depending on their aptitudes and preferences, study Austrian economics, including its technical details, on an independent basis, working with institutions such as the Mises Institute, while pursuing a Ph.D. degree in economics in mainstream programs in the U.S. or in the growing number of programs available in Europe. I have also suggested that young scholars might want to consider enrolling in Ph.D. programs in disciplines that are cognate to economics, including legal studies, management, entrepreneurship, business strategy, organization, public policy, etc.

Pete Boettke has a different view. He has defended the position that young Austrians should pursue a strictly conventional path. As part of this, they would do better by pursuing a Ph.D. at a graduate program with Austrian and Austrian-friendly professors and courses. These debates have been mostly civil. Lately, however, Pete has become increasingly aggressive, if not downright intolerant, of those who propose alternatives to his strategic plan. This has culminated in his vehement and misleading attack on me for a paper I just published that did not meet his approval.

Pete’s response to my recent contribution to the Festschrift for Hans Hoppe, “The Sociology of the Development of Austrian Economics,” is the worst case of logorrhea I have seen in many a year. He rehashes and repeats facts and arguments that he has made numerous times before, including a tedious laundry list of his accomplishments, which, incredibly, he himself has portrayed in a previous post a few weeks ago as reflective of an academic career he considers “to be a failure.” In this verbal spew, however, he completely misses the point of my essay.Now, before I go any further in my response I want to emphasize that it is directed solely and exclusively at Pete’s views, except in the cases where I explicitly mention other people. This caveat should be well noted by the reader because Pete has shown in previous exchanges absolutely no compunction in using his current and former students as well as his colleagues as “human shields,” as it were, portraying any criticism of his own views as attacks on them. This rhetorical stratagem inhibits debate on important strategic and academic issues facing Austrian economists of all stripes and I am frankly sick of it. So this one is for you, Pete–and you alone.

Pete’s explicit criticism of my article is easily refuted, so I will deal with it in Part 1. Much more interesting and instructive is the subtext of Pete’s critique which reveals a perhaps unconscious change in his view of the dynamics of the Austrian economics movement precipitated by the shock of the publication of the Hoppe Festschrift. I will deal with this in Part 2

Regarding my article, Pete misrepresents the “punk project” I was taking aim at. I never said, as Pete claims, that the Austro-punks as individuals have “no future in economics and that there work will lead nowhere.” To argue that I did is a gross and willful misreading of my article. Nor did I ever deny that the Austro-punks were bright, would have successful academic careers, publish books, write articles both in Austrian and mainstream journals, win awards, have their works widely cited or be good teachers. I defy Pete to cite any statement in my essay that can be construed in such a way.

My argument was specifically that Austro-punkism represented a meta-economic call to radically reconstruct Austrian economics from the ground up in a way that was inconsistent with the teachings of the acknowledged masters of the discipline such as Mises, Hayek, and Rothbard (See pp. 98-102 of my essay where I identify the meaning of the Austro-punk phenomenon.) In particular, I identified the silly attempt to dispense with equilibrium theorizing in Austrian economics as the essence of the Austro-punk project. My prediction that this meta-economic program would fail miserably has been borne out by subsequent developments. Indeed there was an implicit prediction in my essay that, when it came to dealing with mundane economic issues and problems, the Austro-punks would sell out their meta-economic commitments and, while clinging tenaciously to the term “Austrian economics,” fall back on their “equilibrium” graduate school training. Thus I wrote (p. 103): “When pushed to analyze a real-world problem, Austro-punks generally resort to Chicago price theory, Public Choice theory, Game theory, or Transaction-costs economics, depending upon the era and institution of their graduate training.” This forecast was also right on the money. In a podcast interview conducted by Russ Roberts, Boettke has characterized research at GMU as “a stew of Menger, Boehm-Bawerk, Mises, Hayek, Rothbard, Kirzner, Lachmann, Alchian, Buchanan, Coase, Demsetz, and North.” Also, in enumerating his host of academic achievements–or failures, depending on which of his blog posts that you read–Pete lists James Buchanan, Kenneth Boulding, and Gordon Tullock as “acknowledged masters of economics” that he did graduate work under. Whatever the merits of these eminent economists’ contributions, they are not Austrians, and even less hermeneuticians, so Pete illustrates my prediction perfectly, i.e., the erstwhile Austro-punks have abandoned their project of developing a new system or rather non-system of hermeneutical economics and, instead, employ eclectic bits of Austrian and conventional theory when addressing real economic problems.

Finally, I want to call Pete out on his false statement that the Austro-punks never “derided the masters or engaged in gross misrepresentations.” Pete accuses me of “pull[ing] a cheap scholarly trick by claiming that he doesn’t want to accuse any particular persons and has studiously avoided any reference to particular persons . . . ” He adds that “Joe does not provide a single citation of any of the Austro-punks by name of by work.” Remember the old Austrian Econ list, Pete? Well, I wrote a follow-up paper to my Austro-punk piece a few weeks later in 1995 naming names and providing quotations from this list. I sent it to Larry White, whose considered opinion in such matters I value, and asked him if he thought I should circulate it. He persuaded me not to on the grounds that it would be unnecessarily divisive. When Stephan Kinsella many years later asked me to include it in my contribution to the Hoppe Festschrift I turned him down because I did not want to embarrass you and others by airing your youthful indiscretions. However, since I refuse to stand mute when accused of rhetorical tricks by someone who seems to have a selective memory or a very tenuous acquaintance with the truth, below I provide excerpts of that unpublished paper which includes quotations. (I had photocopied and still retain in my files about 30-40 pages of similar bilge that was written on the list.) I should here note here that while I do incidentally provide quotations by Steve Horwitz, Dave Prychitcko and Karen Vaughn below, I do not wish to implicate them in engaging in falsehood because unlike Boettke they never denied publicly that they have made such statements. The extract from my paper begins in the next paragraph:


In a lecture given at the Vienna Coffee House sponsored by [Jacob] Hornberger and [Richard] Ebeling’s Future of Freedom Foundation in Virginia a few days before Murray passed away [January 1995], Pete was caught on audiotape, in his typically flippant manner, unburdening himself of the following nuggets of wisdom: Murray Rothbard “fudged the data” in America’s Great Depression in order to justify his claim that the 1920s was an inflationary decade and that, therefore, the Austrian Theory of the Business Cycle is applicable to explaining the Great Depression; Austrian economists should do philosophy, but they should do “good philosophy” not “bad philosophy like Hoppe.” To make matters worse, this audiotape was marketed internationally through FFF . . . .

Expressions of Austro-punkism generally involve one or more of the following types of conduct: casual dismissal of the works of the masters (Mises, Rothbard, and Hayek), uncomprehending, if not whimsical, calls for a radical reconstruction of Austrian economics, gross and willful ignorance of basic Austrian works on particular subjects, and the sneering imputation, without substantiation, of other than scholarly motives to the masters as well as to workaday Austrian economists one disagrees with. The following are examples, all culled randomly from discussions on the Austrian Bulletin Board over the last year:

I think there is a strand within Mises that allows the interpretation that Salerno gives to him, but only if you read the passages that Joe uses way out of context, and have a political axe to grind in showing that Hayek and Mises need to be de-homogenized. [Steven Horwitz]

Steve has never seriously engaged my arguments in print yet blithely imputes to me and others who agree with my work, e.g., Rothbard, less than respectable motives for maintaining an intellectual position Steve happens to disagree with.

The great Rothbard possessed many qualities very brilliant (perhaps genius like [?]) … but a large dose of the political. The political often got in the way of the scholar. . . . [Peter Boettke]

Let’s see, now, when Pete and Steve (above) seriously impugn the scholarly integrity of other Austrian economists, there is nary a peep of dissent, let alone outrage, on the list; but when Pete is victimized by the harmless razzing of Hoppe, the Mises Institute is charged with complicity in precipitating an Armageddon of intolerance and factionalism within Austrian economics. Hmm, could it be that the high-flown metaeconomists are held to a different standard than we workaday Austrian economists?

But at the end of the day, Mises and Hayek (and Menger) were economists … an economics without information and incentives is simply “bad” economics … in fact ignornant [sic] economics–whether that qualifies for selling out to neoclassicism or not is irrelevant. [Peter Boettke]

So much for those who, like Rothbard and Mises, argue that information and learning processes relevant to the application of praxeological theorems must be drawn from historical disciplines. If it is inconsistent with Stiglitzian economics, it is beyond the scholarly pale, according to Boettke.

But really our capital “theory” is incomplete … aborted. Hayek’s Pure Theory book … is the first of an intended two volume set. And Lachmann’s book is really a prolegomena. [David Prychitko]

Has Dave carefully studied the extended discussions on capital theory in Human Action and Man, Economy, and State, let alone Garrison’s writings on capital? Any Austrian economist worth the name should have, and if he has, how can he make such a sweeping claim without references to them?

I want to argue that there is a third way. That third way involves rejecting the equilibrium-bound theories of neoclassicism and versions of Austrian economics tied to equilibrium constructs for a view of economic theory that takes disequilibrium seriously …. [Steven Horwitz]

Ergo, Mises and Rothbard do not take disequilibrium seriously.

I agree that true liberals like us should have no objection to voluntary market experiments like labor managed firms. … As for why conservatives are generally against worker management I think that has to do with a certain kind of mentality that wants to keep people in line and assert their own authority over others. [Karen Vaughn]

Gee, Karen, quite insightful–but hasn’t Mises written a 40-page article analyzing the shortcomings of producer cooperatives? And what about Rothbard’s argument that workers prefer capitalist firms because the former would rather rid themselves of the burdens of entrepreneurial uncertainty and capitalist waiting for income? Why doesn’t the chronicler of the neo-Austrian School deign to meet or even mention their arguments instead of smearing them as narrow-minded conservatives?

The younger generation of Austrian economists, I would suggest, if they are going to improve the theory must kick the old masters in the head; destort [sic] their teachings; pollute it with ideas from other traditions … in a word–reconstruct. [Peter Boettke]

In this last quote, Pete, of course, means polluting Mises and Rothbard with the likes of Joe Stiglitz, Douglass North, and Alfred Chandler, his neoclassicals du jour; but if, for one glorious moment, we take Austrian economics as the cozy network of confreres and chums portrayed in Karen’s book, and which Pete usually has in mind when he uses the term, then the pollution of the clubby atmosphere of Austrian economics has already begun with the Austrian Scholars Conference–and Pete soon will be getting a lot more pollution than he ever bargained for, and from young and serious scholars whose names he doesn’t even know yet.

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