Tuesday, December 1, 2009

Tyler Cowen Rips "Ron Paul-Lew Rockwell Libertarianism"

George Mason University economics professor, economics blogger at Marginal Revolution and "Economic Scene" columnist for NYT, Tyler Cowen, ripped into what he called "Ron Paul-Lew Rockwell Libertarianism," today in Washington D.C.

The venue for the attack was a Cato Institute book forum that featured Tom Palmer's new book Realizing Freedom: Libertarian Theory, History, and Practice.

Cowen served as commenter on Palmer's book.

Following Palmer's comments, which I only caught the tail end of because of my late arrival, Cowen began his comments, and almost immediately differentiated between what he called "Ron Paul-Lew Rockwell libertarianism" and "realistic" libertarianism. He said that like Palmer, he fell into the "realistic" camp.

During the Q&A, I asked Cowen to amplify on the differences between what he deemed "Ron Paul-Lew Rockwell libertarianism" and "realistic" libertarianism. He pointed to a view on immigration and "too much" conspiracy theory that he claimed the "Ron Paul-Lew Rockwell libertarians" held. He said they were moving toward the extreme right wing Republican camp. He contrasted this with what he called realistic-secular libertarianism. He said he expected that a full split between the two camps will occur.

He then stated that he knew some of the Ron Paul-Lew Rockwell camp have been attacking Tom Palmer for sometime and that he did not understand that.

After the forum concluded, I was able to catch-up to Cowen.

I asked him if he thought there was such a thing as Austrian business cycle theory. He said yes but that there has been no original thinking done in the field since the 1930's.

I asked him if he agreed with Tom Palmer's view that ABCT was a religion. He said yes. I asked him how so, and he reverted back to saying that there wasn't any new thinking in the field, that there weren't any masters in the subject.

I asked if it could be said about most theories that most were followers and that there were few masters. "Even in Keynesianism," I continued. He agreed. I then asked if he, thus, was making a distinction without a difference.

I asked him how he thought ABCT needed updating. He said people had changed and that they now understood to be aware of inflation. That they wouldn't just buy up things in the face of inflation. I asked him if the housing bubble didn't contradict his point. He said that the housing bubble could only be one-third attributed to inflation.

I asked him who he thought was writing economic "religion". He wimped out and told me he couldn't think of any names. He told me that he knew he had read some stuff on it but he couldn't remember the names.

I asked him if he thought anyone at the Mises Institute was writing economic religion. He said some, but again he couldn't remember any names.

I asked him if anyone at Mises was not practicing economic religion. He said Roger Garrison. And then he added, "I haven't spoken to Garrison in a long time, so I'm not completely sure, but I hope he isn't. "

He then told me I could google, Austrian theory and financial crisis, and half the results would be "religious Austrians."

As for Palmer, I had hoped to catch up with him and ask him a few follow up questions, unfortunately he was busy autographing books.

Palmer actually made a couple of interesting points during his comments. He said that some of the most original economic thinking, today, was being written in Chinese. He named some Chinese writers. He also pointed out that many European countries had built up strong nation states because leaders were able to justify the necessity by using the fear of attack from neighboring countries. He further stated that in the past the United States was exempt from this type fear mongering because of the separation by two oceans and also the tranquil neighbors of Canada and the present Mexico. He continued by stating that in the present climate following 9-11, the oceans have shrunk and the nationalistic trend has picked up in the U.S. over the last 9 years. He also predicted a merging of the left wing and extreme right wing nationalism. He pointed out that if ObamaCare passes, the left wing will get what they want. (He noted that the "public option" is socialism, and it was as if different combinations of words were tested to find the one that sounded the least like socialism even though it was.) He predicted that ObamaCare will result in deficits within two years, at which point the right wing will start blaming the deficits on illegal Mexicans, and then the right wing will demand a national ID card.

Palmer also at one point during his opening remarks suggested that libertarians should be tolerant of those who have views different from their own, and find what is correct thinking in those that have different views.

This comment struck me in particular, since he doesn't seem to be very tolerant of those who espouse Austrian business cycle theory, although they appear to agree on many subjects. I found it kind of odd that he wants to make nice with commies, but is about as tolerant of the Austrians as most would be about a mosquito about to sting.

I don't know what the history is between the Palmer camp and the anti-Palmer camp, and I like to see a good rumble as much as the next guy, maybe even more so than the next guy, but you have to have the facts when you rumble. And, when Palmer is throwing around accusations that a theory is religion it is a weak punch, especially when Hayek was awarded the Nobel Prize for the theory, and, most important, it is a logical theory based on strong premises. His claim also shows he does not practice what he preaches, since he is throwing hand grenades in the tent next to him.

That said, Palmer appears to be a bright guy. Based on his absurd charges that ABCT is a religion, I would have never gone out of my way to read anything else Palmer wrote. It struck me as very mediocre writing. From what I caught of his comments today at Cato, I am now intrigued enough to read his new book. Just how can a guy make such absurd statements and at the same time sound intelligent on other topics? Maybe the book will provide a clue.

As for Cowen, he's a bright guy, but I don't get how people fawn over his intelligence. At best, he is a sloppy phraser of his terms. Ron Paul and Lew Rockwell merging with the extreme Republican right? This would be the pro-government, pro-war right? Paul-Rockwell stand against 80% of what the pro-war, pro-corporatist big government Republican right stands for. Maybe Cowen is more Machiavellian than I give him credit for and he knows exactly what he is doing by attempting to paint Paul-Rockwell in a corner that they clearly don't belong.

It's the same with the discussion on ABCT, I was trying to get as much as I could out of Cowen, so I didn't challenge him on every point, but much of what he said to me about ABCT indicated he didn't understand it, or he was, again, being Machevelian in building a straw theory.

Which really alarms me in a way, because he told me that some of his students at George Mason University had Austrian "religion". Which to you kids I say, if his comments to you are the same as they were to me, your prof either doesn't understand ABCT or he does and is building a strawman for other purposes. Study on your own, read everybody's views, and go with what is most logical.

All this said, Cowen did tell me his next book is on the decidedly non-Machiavellian topic: The Economics of Food. He tells me that the book will explain how to find good eating places around the world. I'm thinking he can't possibly have an agenda with this book other than to make a few $$$, so this book may really show us what kind of economist Cowen really is and how creative he can be.

It's obviously the kind of stuff he shoud be writing.


  1. Please.....

    Its one thing to say that ABCT is a "religion." Its another thing to demonstrate that ABCT is a religion. As long as Palmer or Cowen fail on the latter point, their claims should be taken as "made in the absence of supporting evidence."

    Let Palmer/Cowen & Co read "Money, Bank Credit, and Economic Cycles" by Jesus Huerta de Soto if they believe original business cycle thinking eclipsed in the 1930s.

  2. I'd say something here that would bring into question psychology and what these two individuals would give up in terms of power, prestige and social reputation if they were to be more consistent (ie Austrian) in their views... but no one would want to hear that, and it'd appear as equally baseless conjecture until revealing itself as true at a later date.

    That being said, Bob Murphy should enjoy this post, it essentially confirms everything he had been guessing at lately.

    I have to say I'm not a partisan one way or another but this was a pretty weak showing by Cowen (and Palmer) and it again reminds me of how I was often treated by my professors in college. No way I can ever get THEIR "religion" if they won't tell me why it is that I'm so heretical to begin with.

    Would've been really funny if you had finished your conversation with Cowen with something like, "(takes off mask) ...well guess what, I AM AN AUSTRIAN ACOLYTE! A boogawoogawooga!" he probably would've peed himself a little.

    Actually... why isn't anyone at the LvMI trying to organize a GMU-Austrian synthesis forum/debate?

  3. I don't really get the "there are no masters" line. Does he mean master like Jedi master, or is he saying no one is even doing a master's thesis on ABCT it is so stagnant?

    I'm not making a joke, I really don't get it. If Palmer were discussing the situation and said "there are masters" I would take that as an insult, whereas Tyler is saying the lack of modern masters means it is stagnant?

    Also, do you have a tape recorder on you or is this all from memory? How do we know you aren't (subconsciously) punching up your interviews to make them really juicy?

  4. For someone that classifies himself as a "libertarian bargainer" he certainly doesn't seem to want any compromise to do with Ron Paul, who in my opinion is one of the leading causes of the current libertarian movement.

    I do see some tiny truth to what Cowen is saying, but if he wants to distance himself from the Ron Paul movement than he is going to get lost in the dust. So be it.

  5. Steve,

    This is the obvious fraud of Tyler Cowen's position... he claims to be a middle-man yet gets uptight about people who aren't in the middle like he is. This is the same lie journalists peddle-- "we're all objective, non-partisan interpreters of fact and opinion."

    The reality is we're all human and we all take to polemics. Even the middle-men. Be more respectable if Cowen would admit that rather than playing the intellectual Jesus.

  6. @Bob Murphy

    I am pretty sure he meant masters in terms of Jedi or superior knowledge black belt stuff. I'm sure Cato will have a youtube up of the forum.

    As for my personal conversation with Tyler, I didn't have a tape recorder, but I don't think he would dispute anything I reported.

  7. It's not actually ethical to blog a private conversation. I also would note there are a few errors and inaccuracies in this account and I would suggest that you should take it down.

    Tyler Cowen

  8. This guy obvious knows nothing about Ron Paul or Lew Rockwell. Sounds like he is jealous that his students do. Ron Paul is a hero.

  9. You wrote:

    I asked him if he thought there was such a thing as Austrian business cycle theory. He said yes but that there has been no original thinking done in the field since the 1930's.

    My response: Just because the theory is "old" does not mean it is any less valid. The more sound the theory is, the less it needs to be tinkered with. A sound theory tends to stand the test of time. I see this as a testimony of the theory and not a negative. His response is weak argument.

    You also wrote:

    I asked him how he thought ABCT needed updating. He said people had changed and that they now understood to be aware of inflation. That they wouldn't just buy up things in the face of inflation.

    My comment: This is another weak argument. It is only logical that an increased awareness of inflation would absolutely accelerate the "buying up of things" as people would seek to get rid of the depreciating dollars faster than before.

  10. It's worth pointing out that Stephan Kinsella used his foot to homestead Tom Palmer's ass.

  11. @Tyler Cowen

    Could you please amplify on the errors and inaccuracies. I will be more than happy to post your account.

    I stand by my report.

  12. Cowen...
    is an ass.

    And Austrian economics, is not even a theory about economics, let alone a religion.

    From what I understand, its a disvowal of theory. It´s axiomatic, which is entirely different from structural theory.


  13. In the video, Palmer and Cowen are very disingenuous. Palmer starts saying he's not one of these libertarians who's against marginal improvements. He implies that some of us "radicals" are against even marginal improvements. This is untrue. All radical libertarians I know would prefer 31% to 35% tax, say, even though 0% is even better.

    The problem is that most of the sellout measures they favor are not unambiguous improvements; the voucher system a perfect case. That expands the size of government welfare and control over education, for example. That is bad, not good.

    Cowen (around 47:00) and starts saying he doesn't know why some of the Rockwellers attack Palmer just because we have intellectual disagreements. Another lie. It's because he personally, viciously attacks some of the best libertarians in the world, and lies and slanders. It's not just an intellectual disagreement. Would that it were.

  14. http://mindbodypolitic.com/2009/12/02/marginal-redefinitions/

  15. The lack of any intellectual content in Messrs. Cowen and Palmer's attacks on Ron Paul and the Austrian School masks a more serious problem. The Cato Institute is neo-liberal. They however brand themselves as libertarian. This creates a widespread confusion between neo-liberalism, a doctrine that embraces such evils as monetary inflation and managed trade (WTO), with libertarianism, which at its core is the political and econonomic development of the doctrine of non-violence in the context of natural property. A formal split between Cato-style neo-liberalism and liberatarianism is a good thing, if it leads to clarifying the radical difference between the schools of thought represented by Cato and by the Mises Institute.

  16. The rift between the Cato/GMU crowd and the Paulian/Auburn (Mises Institute/Lewrockwell.com) crowd is something that always bothers me. I didn't become really aware of it until a year and a half ago.

    I was brought into this movement via Paul's presidential campaign. At the time, I only came in with him with the war issue and the Guiliani moment. But the guy kept saying things that were so different, so off the wall, I had to understand what the hell he was talking about because I'd never heard any politician, much less a presidential one talk about them. I actually had to study and read a bunch of books just to get where he was coming from. Even though I liked he had a logical framework in comparison to other politicians who had none, I'm naturally skeptical and couldn't take all of what he said at face value. Every statement, every book I read, every line, every fact had to be questioned, attacked, and argued with. But it was hard, as almost all of it followed logically.

    Within six months, I was sold on 90-95% of the platform. And where I didn't agree, I understood where he was coming from based on the framework he set out. I have since dropped out of the political aspects of Paul's movement. I no longer wish to be involved in any activism save for marginally cheap debating of economics, the wars, civil liberties, etc from time to time on the few non-political forums I frequent. In fact, I know I have made a limited number of converts through my tiny efforts.

    Consider that three years ago, I was a quasi-socialist-- But I was educated via Paul's efforts and have tried to do so with others. The Paul/Rockwell crowd is what led me to Cato and GMU. There's good work being done at both places and the animosity bothers me. For Palmer to say repeatedly somehow the Paul/Rockwell crowd are extremists with religious zeal is stupid. Last I checked there is no church, there is no bible, there is no pope, there is no heaven or hell in the Paul/Rockwell movement. To me, they are people that do not compromise. For someone to take somebody else's principled stands as extremism is senseless.

    On overall philosophy and economic theory, I think Cato, GMU, and LvMI are equal. In terms of effectiveness, the Paul/Rockwell crowd is much better. I believe this because, one, as I said before, they do not compromise-- And while their message may differ within their own crowd, the people in their crowd are, for the most part, consistent. And two, they are a more populist movement based on talking to the layman instead of academics or politicians-- they are out to educate the public, not debate with other professors or marginally influence government policy.

    I'd like it if they all worked together. Of course, I expect my little rant here to go unheeded. But such is life.

  17. I suspect Cowan is blinded by the golden glow of follow NYT columnist Krugman's Nobel prize. Only Krugman himself could make less sense.

    On ABCT, those of us who understand and use this valuable tool of reason were NOT surprised by the current economic "Meltdown," to coin a phrase. Most other economic thinkers were.

    Ken VAn Doren

  18. @Cowen - it's certainly impolite to blog a private conversation, but it ain't unethical. Not by any stretch of the imagination.

    People report private conversations all the time. They write books about them in some cases. If you can't deal with that, don't have conversations.

  19. I might add this was at a gathering following a formal event where, my guess, the gathering was designed to promote further discussion AND get the word out. It wasn't like Wenzel and Cowen are best of buddies and Cowen was revealing to Wenzel that he was having a secret affair.

    Further, what exactly did Cowen say that he doesn't want public?

  20. For the record, Cowen contrasted "reasonable libertarianism" (not "realistic") to Rockwellism. Check the video: http://www.cato.org/event.php?eventid=6567 . Not that that's a major difference, but critics might as well be accurate.

    People who find an intolerant, vindictive strain in some forms of "libertarianism" may find that this comments section confirms their fears.

  21. "I found it kind of odd that he wants to make nice with commies, but is about as tolerant of the Austrians as most would be about a mosquito about to sting."

    I hear the echoes the extreme right-type fanaticism that tore apart the Young Americans for Freedom. You about as tolerant of tolerance as he is of the Austrian school of economics.

    I don't agree with Cowen (or Palmer), but they do have a point about the Austrian school: they are profoundly off-base when they talk about how we know the ABCT is true. Mises was PARTICULARLY bad in this respect. They argued that because the theory was just SO good, so internally consistent logically sound that it MUST be true. This is retarded and unscientific. We develop theories to explain how the world operates- we then test and compare them to real world. If they create testable and repeatedly accurate predictions, we accept the theory as correct. But Mises disdained to argue empirically. The fact that he predicted the 1929 crash, according to him, was irrelevant and people should not accept the ABCT on those grounds. They should accept it because it's just SUCH a NICE theory! Baloney. We can say with confidence that the theory is valid because it repeatedly predicts and explains economic phenomenon better than any other theory.

  22. This is absolutely ridiculous. I love Ron Paul and I worked on his campaign. Now I work at Cato, and I attended this book forum. Tyler was simply answering a question about the division between different camps of libertarians and specifically Ron Paul people. I AM a Ron Paul person, I love Ron Paul, but I never liked his (current) ideas about immigration policy or excessive promotion of conspiracy theories. Tyler also mentioned that Dr. Paul is correct to question our current policy of a welfare state and having such open borders. That is a policy discussion. The question was not about Austrian economics or anything else... And the answer did not "rip" on Ron Paul-Lew Rockwell Libertarianism in my humble opinion.

  23. @Nena Bartlett

    Thanks for your thoughtful comment.

    It sounds to me like you then disagree with Tyler, since he is the one that says he sees a split coming between the two libertarian camps, and if you listen further, which I didn't bring up in my original post, he hints at some time of bad feeling he gets from the Paul/Rockwell wing. (Does this mean you will have to choose?)

    As for the Austrian stuff, that is what he told me in conversation after the formal end to the book forum. Because you are at Cato, you probably get a chance to see Tyler more often than I do. Ask him yourself, if he thinks Austrian business cycle is "a religion."

    Or better yet, email him and ask him what he really told me, since in the comments here he says I have "errors and inaccuracies" in my report (which I stand by, but as I have noted, I am perfectly willing to publish any reply by Tyler addressing my recounting of our conversation)

    Thanks again for your comment.

  24. I'm curious if Professor Cowen considers his colleague Peter Boettke a follower of the same ABCT "religion," or if he also dismisses Boettke's work on Austrian business theory despite it being far more recent than the 1930's.


  25. Mario Rizzo calls for cooler heads to prevail: http://blog.mises.org/archives/011153.asp

  26. You have an obligation to get your facts/quotes straight. Here's what Palmer wrote:

    "1. A number of people seemed angered by my use of the word "religion." Let me clarify. By “religion,” I was not referring to the methods of investigation of Menger, Mises, Hayek, et al. That was certainly not my point. I used the term to refer to people whose method of investigation is to quote sacred texts as, well, sacred, without bothering to ask whether the claims quoted in fact can be checked, verified, disproven, compared with other claims as explanations of complex phenomena, etc., etc. Woods’s book qualifies. In comparison to Norberg’s (which also relies on insights from Mises and Hayek into booms induced by manipulated credit markets), it’s less serious and more an act of religion."

    "2. I’m not criticizing “ABCT” in general, either. I’m not committed one way or the other. I’m asking whether the theoretical account in Woods’s book (and not some other version in some other essay somewhere else) accounts for what happened. Woods himself sets a test on p. 82, after much insistence that “Austrian business cycle theory” explains what has happened in the present crisis: “If Austrian business cycle theory is correct, we should expect the most significant declines to be in the capital-intensive industries in the higher-order stages of production.” He applies that to the Japanese economy in the 1990s and cites a 2002 article by Ben Powell in the Quarterly Journal of Austrian Economics on “Explaining Japan’s Recession.” Note the words, “If Austrian business cycle theory is correct….” It suggests that if that is not what happens, Austrian business cycle theory is not correct. So, did we see “the most significant declines in the capital-intensive industries in the higher-order stages of production”? Is that what happened in the current case? Was the crisis a rippling out of the process he describes? Is it the case that the crisis was due to overinvestment in the “home construction” industry? (“Artificially low interest rates misdirected enormous resources into home construction.” P. 75) Was a collapse of the “home construction” industry the source of the problem, and not, perhaps, a financial house of cards built on a speculative bubble? Is it the case – and Woods cited it specifically on p. 82 as a test of “ABCT,” that “As the company works towards completing its projects [TGP: in this case, for Woods, it is “home construction”], it will find that the resources it needs, such as labor, materials, replacement parts – called by economists ‘complementary factors of production’ – are not available in sufficient quantities. The pool of real savings turns out to be smaller than entrepreneurs anticipated, and thus the complementary factors of production they need wind up being scarcer than they anticipated. The prices for these parts, labor, and other resources will therefore be higher than entrepreneurs expected, and business costs will rise.” Is that what happened? Did the home construction industry find that labor, parts, and other “complementary factors of production” rose higher than entrepreneurs expected, which caused them to stop building homes and lay off workers, which caused a crash? Yes, or no?"


    That is not calling a theory a religion. It is calling the attitude of a writer religious, for just quoting it without defending it or subjecting it to any test. You seem fast and loose with your quotations or misquotations. If you're going to make a point, better to get it right from the outset.

  27. That's really bizzar. We've got Neo-Cons and MArxists to opose and he's picking fights with Ron Paul for not being "libertarian enough."


  28. It seems to me that the Elephant in the Room that all are ignoring is the Iraq War. There's a very strong correlation amongst libertarians between opposition to the war and espousal of ABCT / opposition to the
    bailouts. (And the opposite.) Not a perfect correlation, but a very strong one, especially among a select group like libertarians.

  29. @Robert Wenzel,

    I guess I don't agree with Tyler because I think there already is a split between the two libertarian camps. As someone who would like to affect change and influence the downsizing of the federal government, this is quite frustrating. Barely anyone listens to us as it is, we don't need infighting to further discredit us.

    Having worked on the Ron Paul campaign, I can tell you that I, too, get a bad feeling from some people in the "Paul/Rockwell wing." And the dismissive reaction from the beltway libertarians also bothers me. But c'mon people, who cares? Is this the time to talk about the few crazies in the libertarian movement -- when we are completely outnumbered by delusional democrats and terribly misguided republicans? They are SO MUCH WORSE! And because of their size, they have so many more intolerant jerks and crazies, so many more people who don't understand a lick of economics, so many more enemies of freedom. We aren't going to get anywhere we need to be if we can't get past our internal politics.

  30. Cowen is just making a personal attack.

    Not well there is no intellectual substance to his remarks.


    It's pure assertion with no coherent argument, no support, no examples, no literature, no nothing.

    It's Cowen going after the economists who have pointed to Cowen's demonstrable ignorance of the explanatory structure and theoretical content of the ABCT.

    No one has added much of anything to Newtonian theory in the last hundred years -- does that mean it's now "religion"? What a pathetic excuse for an argument -- the sort of thing now typical from Cowen when the topic of ABCT comes up.

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