Walter Block Replies to Peter Boettke re Mathematical Economics

from: Walter Block <walterblock@cba.loyno.edu>
to: pboettke@gmu.edu,
 rw@economicpolicyjournal.com,
 Economics Faculty <Economics@business.loyno.edu>

1/2/14

Dear Pete:

I strongly agree with you that math and stat is important for our students if they want to succeed as professional economists (get a phd, and a good job afterward). My colleague John was surprised when I warmly supported his efforts to inaugurate an undergraduate course at Loyola in math econ, or was it econometrics, I forget, or maybe both. But he shouldn’t have been surprised. Just because I am an Austrian economist, and have rather a critical view on both of these subjects (math econ is a snare and a delusion, not to say pure bs: it perverts and undermines good economics; econometrics is ok for history, but not at all for theoretical economics; it is illicit to “test” praxeology with empirical data, only to illustrate it) doesn’t mean I don’t think it important for our students to be familiar with this material. It is absolutely crucial for getting a phd in all US grad schools, and, as you very correctly say, it is difficult, no, impossible, to criticize these intellectual abominations (my verbiage here, not yours) without knowing the first thing about them. However, I only agree with you, oh, 95% on this, not 100%. It is possible to get a phd and have a good career in economics without knowledge of these subjects (although of course quite impossible to criticize them adequately): all a young student need do is get a phd from one of our Austro-libertarian friendly universities in Europe, and then get a job back in the U.S. or stay in Europe. I readily admit that universities in the US are less receptive to phds from Europe (apart from Oxbridge, LSE, Sorbonne, etc.), but Richard Ebeling has one, and has a reasonably good job in the states.

I really think you should develop a thicker skin with regard to being criticized (you talk of my “blasts” at you), lest you be thought of as a person who can dish it out but not take it. Take a look at this excellent essay

DiLorenzo, Tom. 2014. “When Did Ronald Coase Become the Ayatollah of Economic Theory?” January 2; http://www.lewrockwell.com/2014/01/thomas-dilorenzo/the-beltarian-cult/

that tells of how people sharply criticize each other at the University of Chicago. I think we should emulate the Chicagoans in this regard. You say to Bob Wenzel: “I suggest you read the piece with the intent to understand, not with the intent to indict and convict.” Why not both? You imply here that the former is legitimate, but not the latter. I just don’t understand this. Should we not “indict and convict” the Marxians? The Krugmanites? Why not each other?

Nor should there be any mystery as to why I would first, highly recommend to my students Mason in general and you in particular for graduate school, and, also, “blast” away at you from time to time for what I regard as your errors as an economist or a libertarian. I regard you as a magnificent mentor, an excellent teacher and a top scholar. When I send students to you, they almost always attain their phds. As you know, I have had horrid experiences with other grad schools in this regard. Please do not take my substantive criticisms personally. I have also blasted away at other scholars I like and admire and learn much from, such as Rothbard, Hoppe, Salerno, Howden, Bagus, Wisnieski, Molyneux, Ron Paul just to name a few, and have been for years been on good terms with all of them. I have also criticized Mises in almost a dozen publications, and I regard him as the best economist who ever lived.

When I said I agreed 100% with Joe Salerno’s criticism of you, it concerned only your views on why Austrianism is not accepted by the mainstream economics profession. These were my exact words: “I am a BIG FAN of both Bob Wenzel and Joe Salerno. Here, the former cites the latter's excellent critique of Pete Boettke on why Austrianism is not accepted by the mainstream economics profession. Needless to say, I think Salerno 100% correct on this, and Boettke 100% wrong.” How you can interpret this statement of mine as support for anything other than what I actually said, is beyond me.  Certainly, I don’t agree with him on everything; see this blast of mine at him, where Bill and I ‘indict” him and two people he supports:

Barnett, William II, and Walter E. Block. 2005-2006. “Mises, Rothbard and Salerno on Costs.” Corporate Ownership & Control, Winter, Vol. 3, No. 2, pp. 203-205; http://www.virtusinterpress.org/additional_files/journ_coc/issues/COC_(Volume_3_Issue_2_Winter_2005-2006_Continued).pdf

I regard your views on this issue (why Austrianism is not accepted by the mainstream economics profession) as nothing less than preposterous.  Of course, there is a bias against us Austro libertarians. Mises couldn’t get a paid faculty position at a top university. Hayek was blackballed by the econ dept of Chicago, and had to take refuge in their department of Social Thought. Becker and Buchanan have publicly stated we are cultists, and surely this is but the tip of the iceberg; if two such high profile mainstreamers believe this, I imagine most neo classical economists believe it. Sherwin Rosen viciously attacked us; he said in effect that the proof we were wrong was that there were so few of us. When is the last time any of us got published in a top mainstream journal writing as an Austrian? Why are none of us at top universities (with the exception of Mario and Israel)?  And, of course, we are not rejected by the mainstream because for the most part we eschew math models and econometrics. Too many others do too (see the second list in the next paragraph) and they are far from rejected.

Speaking of blasts, when you say “mathematical modeling and statistical testing is the scientific language in which professional economists speak” I regard that as a shot across my bows. Mises, Rothbard, Hoppe, Kirzner, Hayek, are professional economists. They don’t speak in those terms and neither do I. Of course, had you slightly modified that statement to this: “mathematical modeling and statistical testing is the scientific language in which MOST professional economists speak” that would have been unobjectionable, and correct. But, as stated, it is an unwarranted attack on those five Austro libertarians plus many others in our movement. It is also unfair to Coase, Demsetz, Buchanan and Tullock (I think; correct me if I’m wrong on this, I won’t take offense), Epstein, Posner and other mainstream law and econ people. I agree with Bob Wenzel in his critique of you on this matter when he says “Not once in the column do you even give a hint that mathematics may be the wrong methodology for economics and it should be studied only to attack it.” Why do you do things like that?

Pete, you ask me not to “judge (you) by (my) purity litmus test.” But how else can I judge you? How else do you judge other people, other than by your purity litmus test? And don’t say you don’t have one. Surely, you employ precisely that when you “blast away” at people you criticize. The implication here is that I am more narrow minded than I should be and you are not. But, how else are we, any of us, going to get that proverbial one millionth of an inch closer to the Truth than by applying the principles that make the most sense to us?

Different people have different conceptions of heaven. In the view of my friend, colleague and many time coauthor Bill Barnett, heaven is the place where we will know everything. He and I are trying to make our existence here on earth as “heavenly” as we can. Therefore, we are trying to know as much as we can. One way to do this is to come up with a “purity litmus test,” whether for Austrian economics or libertarian political philosophy, use it to the hilt, and let the chips fall where they may. That at least is my own way of operating. As I say, please don’t take any of this personally. I use this purity test on everyone. Certainly, this includes my own past publications, several of which I have had to publicly apologize for, because the later Walter saw an error in what the earlier Walter wrote. Two of them come immediately to mind: my piece with Bill Barnett on Coasean lighthouses, and Hayekian triangles.

If you want to keep this conversation going, I'll be glad to comply. If not, I'm glad we cleared the air a bit. I look forward to a continuation of our two way underground railroad.

Best regards,

Walter

Walter E. Block, Ph.D.
Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics
Joseph A. Butt, S.J. College of Business
Loyola University New Orleans