Thursday, August 9, 2018

A Further Comment: Should There Be a Truce in the War Between the Austrian School and the Chicago School?

Walter Block is out with a great exchange on the battle between the Austrian and Chicago schools. (See it here.)

I want to advance Block's position even further using the thinking on libertarian strategy that Murray Rothbard outlined in an unpublished paper. What he said about libertarian strategy also works for the advancement of Austrian economics. In the remainder of this commentary, I will refer to Rothbardian "Austrian strategy" when he was actually technically in his paper discussing libertarian strategy.

The key part of the paper that applies here is
that, according to Rothbard, it is okay to form alliances with others if it helps expand awareness of Austrian economics in general or if the alliance leads to a specific advancement that is in line with Austrian principle.

His one proviso was that an Austrian couldn't go against Austrian principle when working in an alliance.  You can keep your mouth shut about positions someone you align with disagrees with you about, but you should not ever go against principles. That is, you can promote together what you agree on but never sell out.

Thus, it is fine to speak before any group, of any persuasion (Chicago school, Keynesian, commies, whatever),  on a topic that you can talk about from an Austrian perspective. Such a talk would expose your particular thinking to that audience. That's a win for Austrians. It introduces Austrian thinking to a new group.

Likewise, if an Austrian has the opportunity to write a paper on the evils of rent control in conjunction with say a member of the Chicago school. that is fine if the paper under discussion explains the evils of price controls and historical data is used only to point to past distortions of rent controls as examples of what happens rather than used as a claim the historical data proves rent controls are evil. Since the Austrian school rejects such empirical "proofs."

So Rothbardian strategy is about expanding awareness of Austrian thinking, perhaps using allies in the advancement, and winning small battles, again, perhaps with allies. But never selling out Austrian principles when involved in any alliances.

This is the problem with significant alliances with the Chicago school. The split between the Austrian school and the Chicago school is at a very fundamental level that includes methodology, monetary theory and perspective on acting as a technocrat for the state.

Both schools can be free market advocates in a way but the more radical free market views of the Austrians are going to make it difficult for an Austrian on many positions to work with a Chicago school economist and maintain principle--the breaking with principle being the absolute worst violation of Rothbardian strategy.

In his exchange, Block highlights the many ways the Chicago school economists are a bunch of technocrats for the state, always snatching a free market victory by finding a twisted role for the state:
the wicked Chicagoites, pushing their fed, their voucher systems, their negative income taxes, their malevolent universal basic income plans.
And then there is the problem with the Chicago school not exactly opening their arms to Austrians. Walter again:
 Also, the Chicagoites teach at Chicago, UCLA, and many other prestigious places. Where do the Austrians hold faculty positions at? To ask this is to answer it. How about them being nice to us? When’s the last time they hired an Austrian? Never, that’s when. Friedman and Stigler blackballed Hayek from the Chicago econ dept. He taught there, but only at the committee of social thought. Did any of them ever hire Rothbard? Mises?
Of course, there is nothing that says they should hire outside their confused positive methodology but it must be noted that they don't.

So to recap, if we consider that the use of alliances is to boost Austrian strength by expanding awareness of Austrian theories, it is difficult to see how such an alliance can be reached to any significant degree, if at all, with the Chicago school. They really don't want to play with us and they play often enough with the establishment and elitists that from their cost-benefit analysis perspective, it is probably a benefit for them to shun our more consistent, though radical anti-government perspective. In other words, they get invited to more cocktail parties than we do and alliances with us would spoil that for them.

That said, there are two ways that it is possible to interface with Chicago school economists (or other non-Austrian school economists). We can come to their support if they are taking a position that is very Austrian in perspective, especially if they are not getting the usual support from their fellow Chicago school peers on the topic.

I have used this approach in another intellectual sphere and people who are dangling from tree branches notice when you tell them that it is positively a cool acrobatic move they are making while you also hold a net underneath them so that they can land safely. They will notice and they might appreciate it with good things happening from an unexpected place.

Another approach is to bomb away at a confused essayist with an audience in the hope that you goad him into a response which results in his audience becoming aware of you.

Walter uses some kind of kung fu move where he is a master of being kind and bombing away at the same time. And I have seen him use this technique with remarkable success. He is at a total different level from the rest of us. He should be studied for his technique alone. I am amazed at some of the things he pulls off.

That said, I am with Walter here. Aside from some kung fu moves, we should be mostly in full war on a second front with the Chicago school. Almost any kind of alliance with them is not going to help Austrians. But we can keep an eye out for the occasional straggler that we can work with. and I will run an occasional Milton Friedman video clip on, say, the benefits of free trade.



  1. "Walter uses some kind of kung fu move ..."

    What's that line from a movie?: "I'm not Tony Stark." Perhaps Walter is.

  2. Friedman was good at getting on mainstream shows and spreading his message. In the Internet age, Austro-libertarian "celebrities" have effectively developed their own forums, but I wonder if they've been as effective as Friedman in getting into the mainstream media. David Stockman, John Stossel, Michael Malice, and Dave Smith seem to be having some success, but maybe the mainstream media these days is less interested in giving Austro-libertarians the access it gave to Friedman. That could be because the media has changed, or because Friedman's form of liberty was much "safer" to hear.

    1. The latter. The FED is the state's primary looting machine. Citizens are not allowed to even conceptualize its existence. Libertarians seem unable to grasp the state's thought suppression process.

  3. The whole idea of playing nice to gain ground and "legitimacy" reeks of some LP strategic nonsense. The war between the two schools is a great thing. As a young 20-something searching for "what is right?", it highlighted the differences between the two foundational theories/principles. This led me down the path of Austrian and Rothbardian theory.

    It takes an inquisitive mind to reach certain conclusions. If you muddy the waters to gain "legitimacy" from less inquisitive people you haven't really gained anything at all.

  4. Remember also there is the old Chicago and the new Chicago. The Old Chicago which is based on Frank Knight radical uncertainty is very much Austrian friendly. James Buchanan was probably the last of the Old Chicago tradition.

    What most people including Austrians consider 'Chicago School" is the positivism of Friedman and the stuff from Lucas, Sargent, Becker etc. When in reality by Frank Knight and Henry Simmons standards, the New Chicago thinking is at odds with it's orginal thinking.

  5. Working with others to achieve a common goal? Don't lolbertarians start kvetching about collectivism when this happens?