This writer claims that Friedrick Hayek is not an Austrian economist. "My equation of Austrian economics with Mises and Rothbard rather than F.A. Hayek is bound to be controversial. The primary justification for this is simply that Mises and Rothbard clearly rejected many of the key elements of modern neoclassical economics, while Hayek did not. If Mises and Rothbard are right, then modern neoclassical economics is wrong; but if Hayek is right, then mainstream economics merely needs to adjust its focus."
There’s a lot of dispute over that, Huelsmann covers it in his work on Mises. Essentially Hayek had one foot in the Walrasian camp, the other in the Austrian camp. He was definately heavily influenced by Walras, and he had no issues with the use of math in economics. However, I wouldn’t go so far as to say that he wasn’t an Austrian, since the Austrian school has many different opinions within. He was just a member of the Menger - Wieser - Hayek - Kirzner branch of the school as opposed to the more rationalist Menger - Bohm Bawerk - Mises - Rothbard - Hoppe.
He also did wonderful work in Austrian macroeconomics.
Alasdair MacIntyre gave as good a definition of a tradition as I’ve ever seen:
an argument extended through time in which certain fundamental agreements are defined and redefined in terms of two kinds of conflict: those with critics and enemies external to the tradition who reject all or at least key parts of those fundamental agreements, and those internal, interpretative debates through which the meaning and rationale of the fundamental agreements come to be expressed and by whose progress a tradition is constituted.
Thus, yes, Hayek was an Austrian economist (just as NeoLiberals and Libertarians are both liberals); and it is simply factionalism to deny anyone the title because they do not follow ‘the party line’. Even if you think the party line is correct, rejecting others from the tradition just because they are dissimilar on a few points is just plain cranky.
What about this?: “If Mises and Rothbard are right, then modern neoclassical economics is wrong; but if Hayek is right, then mainstream economics merely needs to adjust its focus.”
Didn’t Hayek win the Nobel prize for promoting the Austrian theory of the business cycle? How far is ABCT from mainstream economics?
And I agree with Rothbard’s friends. They waited for Mises to die, and then gave it to Hayek because he wasn’t a “monster” like Mises. Hayek was a compromiser.
To not include Hayek in the rank of Austrian economists is an arrogent, and foolish decision that denies the movement one of its most fruitful thinkers.
Hayek was a compromiser, which is why the people following his tradition have overseen the growth of leviathan, and massive human suffering through American militarism.
And the fringe Mises/Rothbard orbit has produced the modern radical libertarian movement which rejects state, rejects violence and doesn’t equivocate on the market.
I’m sure Hayek thought what he was doing was right, but the fact that the ABCT is promoted by LvMI and not GMU or Cato, that it is Tom Woods from LvMI with a NYT bestseller explaining ABCT, and only Ron Paul who will speak on the political trail about his theory, that should speak for itself.
And who actually claims to be Hayek’s tradition? Surely there is the Mt. Pelerin Society, but that’s not a Hayekian tradition, that’s just an organization that he created, and that will reflect the politics, and values of whoever is in it. Also keep in mind that organizations founded to reflect certain values may turn towards completely different values; for instance, Rothbard’s involvement with Cato, and the LP.
The last time I checked neither were created by Hayek, nor do they claim to be continuing a purely “Hayekian” tradition.
Hayek was an equilibrium theorist after his teacher, Wieser, he also considered maths to be allowable in economics. Whereas the Misesian line of Austrianism rejects equilibrium theorizing and mathematics.
It’s said that it’s easiest to read Hayek as a neoclassical with a background in Austrianism. His best work is by far with ABCT work, which is quite a distance from the mainstream. Nonetheless, he is considerably closer to the mainstream than Rothbard and Mises were.
I wouldn’t say so, there’s definately some extent of truth in that statement, not enough to deny him of being an Austrian though, but Caplan never said that.
The ABCT was more Hayek’s doing than Mises’s, granted the latter came up with it (although, not intentionally) but Hayek elaborated upon it and integrated Austrian capital theory.
Hayek’s views on capital (and his earlier ones on methodology) are so utterly at odds with those embraced by mainstream economics that I cannot understand how that statement could be anything but nonsense. If mainstream econ “adjusted its focus” that way it’d be morphing into Austrian econ, with merely a few more steps needed to render it consistent with subjectivism (and purge it of any remaining scientistic garbage.)
I was thinking about later Hayek when I wrote that post. As for capital, it could be included into mainstream macroeconomic theorizing just by relaxing some of the aggregation, granted, it still wouldn’t be consistent Austrian subjectivism, but that was sort of Caplan’s point.
No, I am referring to the nonsense they believe insofar as perfect competition is concerned, as well as their treatment of utility - actually I wonder if they’d find any support in Hayek even there, certainly not with regard to the former, and I have not read much by him on utility but I am sure he did not view it as neoclassicals do. Taking in Hayek’s view of capital would be tantamount to conceding most of the case to Austrian economics (as it would cut away entire swathes of mainstream theorising, e.g. the possibility of overproduction/underconsumption on a free market, sharp division between credit and capital and so on), regardless of how they perceive (their flawed) methodology to be. The later Hayek is more neoclassical on methodology, i.e. more wrong.
I agree, nonetheless, with Hayek’s later methodology in mind this could be done without undermining the entirety of neoclassical mainstream economics. On the other hand, if one were to eschew the entire use of equilibrium theorizing as the Misesian line of Austrianism does then the neoclassicals would cease to be that and would become Austrians. I think that was largely Caplan’s point.
Keep in mind, I say this as somebody with a great deal of respect for Hayek and a large dislike for Caplan. I just think that whilst a lot of the conclusions would be different, mainstream economics would not be undermined entirely with the inclusion of Hayekian insights.
The sole remaining step would be for neoclassicals to accept disequilibrium analysis as opposed to their static (or “comparative statics”) models, and realise utility is purely ordinal (as far as measurement goes) and subjective, which they do but fail to apply properly.
Sure, but presumably because of Wieser’s influence, Hayek often didn’t embrace disequilibrium analysis himself. In which case, Caplan’s point still stands.
You wouldn’t know it from my text book, which mentions “utils”.
Well if Caplan’s point is that Hayek is not as Austrian as Mises or Rothbard (or any bunch of other Austrians) I’d agree, but I am not convinced neoclassicals can simply adopt the Austrian view of capital and leave their theoretical framework wholly unchanged, because the Austrian theory of what a capital good is &c. is highly rooted in its subjectivist approach. I am not sure to what extent Hayek’s work reflects this but if it does it would entail many more changes than a mere shift of focus. All the more so if Hayek accepts the doctrine of the subjectivity of costs (i.e. treats all costs as opportunity costs.)
