Not from me. I just got a book called “A History of Economic Thought” by John Fred Bell.
Surprisingly he has a chapter on the Austrian School but claims it is silly for 2 reasons. Here they are:
"Since the theories stem from subjective evaluations, the first general criticism is directed at the hedonistic, pain versus pleasure, caluculations. The Theory makes value not an attribute of the goods but an attribute dependent upon a psychological determination of utility as conceived by each individual who responds to a host of environmental factors. As Gray put it, ‘Value then, is a judgement of the mind; not a property of the thing or an independent entity’…The productivity of all factors would be affected by the addition or withdrawal of any one factor, since they are jointly responsible in total production; this the product of any one could not be independently computed…If one is interested in price theory, the analysis must be more specific and less all-inclusive, with some recognition being given to the circumstances of time and place and prices of other factors and products. …Final choice is dependent upon many other factors besides expected pleausre or satisfaction as balanced against the dissatisfaction of doing without.
The Austrian Analysis would make the individual a calculating machine which would always come up with the right answer on the value of producs, hence the amount that would be supplied, and so on. The pricing process in the market is not as simple as that. "
Bell, 450-451
" Finally, the value theory is completely monistic. When considered by itself, it is indefensible. The Austrians excluded supply or cost of production as being of significance and the concept of mutual dependence of supply, demand, and price as well. They were obliged however to make some use of supply, but only in an indirect manner; they reasoned that cost of production determines supply; supply determines marginal utility and marginal utility determinesvalue. The reverse is just as inadequate; as Marshall pointed out, "If this series of causation really existed, there could be no great harm in omitting the intermediate stages and saying that the cost of production determines value. For if A is the cause of B, which is the cause of C, which is the cause of D; then A is the cause of D’.
Neoclassical economists holds the Austrian analysis to be inadequate because of the failure to consider supply as a factor correlative with demand in determining value and price, and the failure to recognize the mutual interdependence of supply, demand, and price."
Bell, 451
I have a hard time even understanding these arguments. As for 1, I don’t see there being an issue at all. As for 2, I don’t see that even resembling the Austrian position.
He claims that praxeology stipulates that a person uses hedonistic utilitarian calculus to come to decide how to reach an end. Praxeology does not imply nor state that. People have theories and complex mechanisms for coming to conclusions as to how to act, and praxeology does not deny, nor contradict that. So he’s attacked a strawman.
On 2)
An important thing to remember here is that sunk costs are sunk, hence do not determine price. The price is determined at the sale. The aggregate of all pricing of all things, and the willingness of people to exchange one good for another manifests itself across a market in the form of supply and demand. Supply and demand doesn’t determine the price level for one sale, it determines the overall price level across an economy.
Also, supply and demand may also be consciously factored in by the parties as they negotiate a price.
Supply and demand are better at explaining economic forces that cause changes in prices, rather than pegging a concrete price at which a seller should sell or a buyer should buy.
Supply and demand curves continually transform as a result of the bargaining process, and something similar to Mises’ regression theorem could probably be used to explain the first economic exchanges which started to put prices on things.
Wrong, Bohm-Bawerk has a purely positive theory of capital. What he means to say is that Austrians view humans as, well, humans, that is, thinking creatures who engage in purposeful action.
Only Austrians believe in subjective value? Since when?
Yes, the labor theory of value has long been refuted.
Yes, a calculating machine who decides what he/she wants (humans thinking)!
This is just plain wrong. So many people criticize Austrian economics without ever reading a single page written by any Austrian economist (and in this case, any marginalist).
Marshallian and Keynesian (not Neo Keynesian) price theory revolves around the firm and input costs. They basically still hold onto the law of costs, you know, the labor theory of value.
Bell shows he doesn’t understand neoclassical microeconomics let alone Austrian economics. He argued, apparently, that Austrian economics is silly because it denied a non-human standard of value. (Edit: poster above beat me to it.)
Therefore:
In the words of Lichtenberg, that book concerning the “history” of economic thought is better off as paper mache in a bust of the writer of that “history”.
Why do so many people want to write histories of economic thought rather than make contributions to economic thought first. I know. Because they are so-called Institutionalists, like that author of that “history”. They make straw man attacks against marginal utility, and then talk about how great Polanyi or Galbraith are.
If I guessed right about how Bell organizes the book, then I would follow Lichtenberg’s instructions. However, I’m sure its a thick book; better recycle the paper instead. As Schopenhauer bummed off Lichtenberg: we don’t have time to read rubbishy literature, once we discover it such, because we lack the time to read all the good literature.
I’m under the vivid impression that, stripping the colorful terms employed, the author is simply saying “such Austria Economics tricks can’t help me, the bureaucrat, in my job of directing other people’s lives”. He is correct.