Are Non-Misesian Austrians Too Lazy or Too Statist?

Economics Economics Questions
1

I was reading the Market Financial today and came across this post from last month:

Mises v. Hayek v. Boudreaux

Written by Jeff HardingAlerts, Expert Opinions, US MarketsJan 26, 2011

Recently Cafe Hayek’s Don Boudreaux put up a list of his top ten economists. There was one glaring omission: Ludwig von Mises. I was absolutely bowled over by this. He mentions a lot of fine economists, with Friedrich von Hayek his number one choice. When asked about Mises he says:

Don: Mises has just never done it for me. I love his 1922 book Socialism, and his book Liberalism. He was a damn good economist, no doubt.

Reader: Have you read “Human Action?”

Don: Yep. Snooze.

I don’t know what to say other than that Boudreaux just slipped about 10 notches down on my list of respected economists. I hate to do that because he is one of the most prominent economists and figures in Austrian theory economics. I am a big fan of his “letters from Don,” his constant stream of letters to editors and his defense of free trade. Other than that I haven’t read any of his major works.

Here is my comment on the subject from Cafe Hayek:

Mises contributions to the intellectual foundations of social sciences and economics, as pointed out above were without peer. Think of his writings on epistemology as kind of a unified field theory of human action. But the problem with Mises was, well, Mises. He was known to be uncompromising, rigid, and one not to suffer fools lightly. Friedman commented on Mises in a deprecating way: at a Mont Pelerin Society meeting, Mises called many of his fellow attendees “socialists.” Also, Friedman said to effect that he (Mises) said you could know things just from theory. Imagine that. Well, Milton was wrong, his monetary theory was wrong, and he no understanding of epistemology. I greatly admire his defense of free markets and his role in the popular media, but, let’s face it, he was a monetary interventionist, the equivalent of economic central planning through the Fed. If you read Hulsmann’s bio of Mises, a great intellectual achievement in itself, you will get a sense of the man: fierce dedication to intellectual rigor and a desire to achieve truth above all else in his life. I don’t mean this to sound like a Mises hagiography, but I think his intellectual achievements were far superior to Hayek, and I agree with the commentators who say without Mises, there would have been no Hayek or Rothbard. I think Don and the others who think Mises is boring have just missed the point. That is, Mises is difficult, Old School, and hard to get into. Hayek is far more approachable. A great economist to be sure, but, as pointed out above, what did he contribute in economics that wasn’t founded on Mises?

It made me wonder: why do so many ‘Austrians’ stick to the inferior Hayekian analysis when they have to be aware of Mises? It is not even that they seem to disagree with Mises, it is more like they have never even read him. They typically have no interest in substantive analysis of methodology or epistemology in economics even though this is key to the difference between Austrian and mainstream economics. Instead they seem to practice ‘economics’ solely from the angle of technocratic policy recomenndations.

Is the divide caused by intellectual laziness or a simple aversion to radicalism which causes them to take up the sometimes social-democratic views of Hayek as against Mises?

2

This dude is a little rusty about his knowledge about Mises and Hayek. I personally believe that you HAVE to be a good Miseian in order to be a good Hayekian. There is a good article by Steven Horwitz that explains that in order to fully understand Hayek, you must know Mises. http://www.gmu.edu/depts/rae/archives/VOL17_4_2004/1-Horowitz.pdf

I disagree with Hayek’s conclusions on many things but the Hayekian frame work can clearly be just as radical as a Miseian framework or a Rothbardian framework… That is why there are people that would consider themselves Hayekian anarchists, like Horwitz, himself, claims to be. In fact, philosophically, Hayek and Mises are very similar because they have a consequential framework instead of a Rothbardian natural rights framework.

I fell into that same ''Mises -vs- Hayek" trap a while back ago but after reading some Hayek works, it was easy to tell how similar the Mises framewrok is and Hayek one is

3

I was going to respond to this, but since apparently the only two options are ‘too statist’ or ‘too lazy’, I guess I can’t.

Don is an anarchist and works like 70 hours a week - as far as I’m told, though.

Also relevant: “My list is compiled based upon my own assessment of the mixture of the quality of their insights and influence.”

4

And I’m not sure what Hayek’s ‘social democratic’ views - if only we lived in the social democratic world of Hayek compared to what we have! - have anything to do with thinking he’s a good economist. Do you really think they go like: ‘ow, well, Hayek is a far better economist than Mises, because Mises was such a radical classical liberal!!!’?

5

No, I think they unconsciously discount anything that smacks of hardcore libertarianism.

Although Hayek may have just been appealing to SocDems in his Constitution of Liberty the work itself was undeniably social-democratic. It was horrible, atrocious, repulsive, anti-libertarian. Just like the Mont Peleron society I find many ‘Hayekians’ - like many Friedmanites - are not remotely libertarian, but are instead advocates for a ‘more efficient’ social democratic statism. I don’t want the government to be ‘efficient’. I want every dollar it takes to be squandered and eaten up in overhead, I want its police to accept bribes for trivial sums, I want its courts imploded and completely blocked, I want its public schools to be disasters so people will stop supporting it. So it will lose power and credibility.

This is one problem I have with the idea of libertarians being elected. Suppose they were. To some extent they might stop the act of governance. All well and good. But a side effect of this is to make the State more sustainable and, in the long run, far more dangerous. I say, anarchy or bust.

6

This is probably one of the most insane attempts of psychologize that I’ve ever encoutered on this forum. Before you denounce people like that, it might be interesting to actually talk to them, their normative views and their relation to their descriptive analysis.

And yes, the third part of CoL is horrible. The first and second part, however, are more philosophical arguments that can be incorporated in a Hayekian anarchist world view. You do realize that there are a lot of Hayekian Anarchists, right? You are aware of these people?

Furthermore; saying policy x is better than policy y is not the same as saying ‘we should have policy x in stead of a free society’. One can advocate certain policies, whilst aiming for a free society. I disagree with this idea of political change as a general rule, but that’s simply a disagreement over methodology, not goal.

What you are basically advocating is that the world should go to hell because than people might be more inclined to freedom. That’s one strategy. A strategy that actually has little to no scientific support, in that sense that people, as a general rule, don’t respond to failing government services with a higher demand for freedom - ceteris paribus. Government failure, as a general rule, doesn’t create libertarians.

7

You do realize that there are a lot of Hayekian Anarchists, right?

And 99.8% of them are not. What’s the ratio for Misesians? 50% or more? There’s probably a reason for that, you know.

Government failure, as a general rule, doesn’t create libertarians.

So what? Nothing does. People aren’t libertarians. Acceptance is key.

8

Do you have data to back that up?

9

A Misesian type of anarchist would be closer to a Hayekian anarchist instead of a Rothbardian anarchist because Mises believed in consequentialistic philosophy, like Hayek, instead of natural rights like Rothbardians…

10

It sounds like you more or less answered your own question. That, and I think the author offered a decent answer as well:

I think Don and the others who think Mises is boring have just missed the point. That is, Mises is difficult, Old School, and hard to get into. Hayek is far more approachable.

11

I find Hayek tedious, roundabout and quite frequently wrong. I find Mises not only readable but vastly more intelligent, insightful and - for that matter - funny.

12

I think I’m in the same boat as Ricky.

I find Hayek’s writings baffling. Whereas Mises’s writings are clear and enthralling.

13

You hit the nail on the head with your comment on the Cafe Hayek blog. It’s about “no understanding of epistemology” although I wouldn’t put it precisely in those words. It’s more about not fully embracing Mises’ praxeology, and instead just paying the occasional lip service to it. Some explicitly reject it. Some are not even familiar with it, or don’t take it too serisouly. They don’t understand that Austrian economics absent praxelolgy is basically just mainstream economics.

It has nothing to do with Anarchism or anything like that.

14

My major complains about Hayek are conflating knowledge and calculation problem, going backwards on methodology and epistemology and putting out some of the worst legal writings I have ever read outside of Posner.

15

Where does Hayek “conflate” the knowledge and calculation problems? Hayek is clear that his “knowledge problem” is an addition to Mises’s calculation problem, because he believed Mises’s calculation problem to be incomplete. To some extent or another, I think Mises would agree with Hayek’s criticism, although it would take them to two different areas of study. Mises filled in the lacuna by providing an explanation of a working pricing process in Human Action, while Hayek tried to discover what prices represented and how they conveyed subjective knowledge (i.e. preference). It’s also important to realize that Hayek was writing when economist such as Lange and Lerner had accepted Mises’s calculation problem in regards to socialist economies, and instead began arguing in favor of this mystical concept of a socialist economy with market prices (let’s call it a mixed market). Mises, in Human Action, avoids accepting their framework, and says that there are only market economies and socialist economies, not half-socialist economies and not half-market economies. Hayek, I believe, was trying to argue within their framework. It was two different methods of going about developing theory of the pricing process.

16

People who have read Hayek would understand that it is Menger, not Mises, who separates Austrians from other schools of thought.

17

@Coase

yes, Menger is the founder of Austrian Economics but Menger only applied micro-framework… Mises went further and applied macro framework into the Austrian school… more specifically, he talked about money, alot… he then merged his idea on money with Bawerk’s idea of interest to come up with the beginning stages of the Austrian Business Cycle, which explains Capitol theory on a marco and micro level… Hayek took Mises theoy on the cycle and explained it further… As Rothbard puts it Mises “healed the artifical split [macro & micro split] and made micro and marco one whole beautiful intregrative system of economic analysis.” I would suggest listening to this http://mises.org/media/961/Mises-in-One-Lesson

18

"Isaac “Izzy” Marmolejo wrote the following post at 02-06-2011 11:40 PM: I disagree with Hayek’s conclusions on many things but the Hayekian frame work can clearly be just as radical as a Miseian framework or a Rothbardian framework"

Are you implying it’s good to be radical for its own sake?

Also, what is radical about Mises?

19

  1. No, the point I was getting across is that we shouldn’t judge Hayek on his conclusions, we look at his framework. And from there one can be a minarchist or anarchist. People could do the same thing with Rothbard, for example. There are Rothbardians that are minarchists (Ron Paul) and Rohbardians that are anarchists…

  2. The Mises framework can be very radical, just look at Mises’ most famous follower, Rothbard.

20

I believe the OP refers to the economic contributions of Mises as oppose to Hayek. Not who is more compatible with Anarchism or whatever.