Sunday, January 3, 2010

Understanding the Rich Tradition of the Austrian School

Those of you not familiar with the history of the Austrian School of Economics may not understand the brouhaha over the news that some George Mason University economists have announced that they will no longer be identifying themselves as Austrian economists.

To you I have one bit of advice, save your pennies and be patient. Here's what I mean.

Some weeks ago economist Richard Ebeling was kind enough to email me a galley copy of his forthcoming book. Because of a busy schedule I only today opened the book up to read. The title of the book is: Political Economy, Public Policy and Monetary Economics: Ludwig von Mises and the Austrian Tradition.

There appears to be no more apt a book to understand the work of Ludwig von Mises and the rich tradition of the Austrian School. And make no mistake, Ebeling understands the tradition. In the book's acknowledgements he writes of meeting Austrian economists: Murray Rothbard, Israel Kirzner, Friedrich Hayek, Ludwig Lachman, Fritz Machlup and Oskar Morgenstern.

Of Machlup and Morgenstern, he writes:
Machlup and Morgenstern both had their owns forms of old-world Viennese charm, and generous willingness to share their ideas and recollections of Vienna and the Austrian School in those now very far bygone days of the 1920's and 1930's. Machlup, in particular, shared fascinating and often amusing stories of the intellectual environment among the academics at the University of Vienna, and about the circle of scholars who made up the membership of Mises' "private seminar."
GMU professor Boettke wrote about the term "Austrian economics":
The term "Austrian economics" has become as much a hindrance to the advancement of thought as a convenient shorthand to signal certain methodological and analytical presumptions.
But this is nothing new for scholars in the Austrian tradition. As mainstream economists hop on one bandwagon or another, it has always been the Austrians who understood their outside, yet principled position. Ebeling continues in his acknowledgments:
Conversations with Ludwig Lachmann were always a great and challenging delight. I would enter his NYU office, and immediately after closing his door, he would say in his slightly gravely sing-song, German accent. "Well, Mr Ebeling, in these four walls we can speak our mind." Soon we were lost in fascinating talk about the trials and tribulations of the economics profession, and its failure to successfully grapple with the dilemmas of radical uncertainty, kaleidic expectations, and disequilibrium dynamics.
To somehow grab the essential theories of this group of principled scholars yet whitewash the great scholarly tradition is simply bizarre.

It is thus a near a gift from the heavens that Ebeling's book on Mises and the Austrian tradition will be published in February. It will certainly serve as an important antidote to the whitewashers.

I must further comment that the publisher, Routledge Press, is clearly aiming the book at an institutional academic audience, given the list price of the book is $140.00. This should be noted, since another point Boettke makes in his break with the Austrian Economics designator is that his group is more interested in scholarly research rather than to "identify with any political party or specific political movement." A list price of $140 suggests that Routledge certainly sees an academic market that Boettke fails to.

I will have a more formal review of the book closer to publication. However, needless to say, I think that this is an important work, and given the developments at GMU the timing couldn't be better. Even at $140 list price, for any serious student of economics, there is going to be huge consumer surplus upon purchase and reading of the book.

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