Tuesday, December 1, 2009

What Is Austrian Economics?

By Mario Rizzo

Many years ago (around 1982, I think) Jerry O’Driscoll and I wrote a paper that was the basis of an American Economic Association session. The paper was called “What is Austrian Economics?” The paper gradually evolved into our book, The Economics of Time and Ignorance.

The purpose of this book was to present Austrian economics in an updated fashion. To do this we needed to do two things: (1) uncover many of the fundamental ideas implicit in the tradition but not, as of then, sufficiently elaborated or made explicit; and (2) confront Austrian ideas with recent developments in economics, both mainstream and outside of the mainstream.

We faced many initial negative criticisms of the book. I will say that I was very disappointed by some of the old-guard reaction to the book. But do not confuse “old guard” with age because some of the greatest encouragement we received was from Professor Ludwig Lachmann who well understood the necessity of going beyond what the previous generation of Austrians had bequeathed us.

Remember that for many years Austrian economics was in the wilderness and the simple preservation of the Mises-Hayek tradition was a service of tremendous value. Many of those who were would-be Austrians in the 1970s and early 1980s really knew little of the tradition. They had to learn before they could make progress within the tradition.

But this resistance was more than loyalty to a tradition. It was symptom of the discomfort many felt in going from a stagnant research program to one that is growing, stretching, evolving and making errors. The true spirit of science, as Karl Popper continually taught, is to recognize that from errors we make some of our most important discoveries. Obviously, it is not that we strive to make errors. But bold thinking will, ex post, often reveal that the scientist was wrong. But we go on.

I do remember that some commentators made fun of us and the title of the book by saying things like “ignorance of economics” or “ignorant economists.” Some of these were outside of the Austrian camp and some were inside.

I also remember my friend Peter Boettke saying some years later that Ludwig von Mises was not afraid to criticize the great Eugen von Boehm-Bawerk. So neither should we fear to criticize previous Austrians.

This is history – much of which may not be known to younger generations of Austrians.

The history has a current purpose, however. We need now to refocus on the question: Just what is Austrian economics?

Read the full article here.

No comments:

Post a Comment