Austrian Economics and the Secondary Literature by Peter Boettke‏

Let me confess something as I begin this post, I am a historian of economic thought. It is one of my main areas of professional specialization. It has been listed on my CV since the 1980s and I have taught courses in the field, published in the journals in the field, and attended the professional meetings in the field just as long. I am a contributor to the "secondary literature" on Mises, on Hayek, on Kirzner, on Buchanan, on Boulding, on the Ostroms, etc. I obviously view history of economic thought as a worthy professional endeavor.

But I also think this is the #1 problem with modern Austrian economics --- both internal and external perspectives on it. Those working in the area view their work as part of a secondary literature providing commentary on the works of Menger, Mises, Hayek, Rothbard, Kirzner, Lachmann, etc. The question that should be raised is, Did Mises think of himself as part of a secondary literature on the works of Menger and Bohm-Bawerk? The answer is clear; No, he did not. Mises saw himself as part of a primary literature on economics. How about Murray Rothbard? Didn't he start his career off by trying to straighten people out on what Mises said? Again the answer is clear; Yes, but he also saw himself as contributing to the primary literature in economics (and politics, and philosophy, and history). Pete Leeson's 10 Austrian Vices and How to Avoid Them probably captures the mind-set required.

A living school of thought is not judged on the quality of its commentary on previous thinkers; it is judged on how its ideas can address current problems and push forward new ideas that are attractive for a new age. Intellectual history proper contextualizes ideas in their past circumstances to clarify them. While I am an advocate of the contra-whig perspective that sees the evolutionary potential in the history of ideas for contemporary theory construction. The bottom line is that for the Austrian school to move from being primarily backward looking to being viewed as a progressive research program in contemporary economics and political economy the focus has to shift from people to propositions; from historical settings in the evolution of ideas to contemporary problem solving in the realm of theory, application, and policy.

This problem is recently seen in the otherwise laudable effort of Eamonn Butler to provide a primer on Austrian economics. See the discussion at The Filter on this point. Butler's heart and mind are in the right place. He is a clear writer and he has a clear understanding of the basic contributions that Austrian school of economic thought made both during the founding neoclassical period (1870s-1990), the alternative within the mainstream of economic thought period (1900-1940s), and the outside of the mainstream of economic thought period (1950-1980). And, the Austrian school has a lot to offer that is relevant for addressing the issues of our time.

But if Butler's picture of a "primer' were right, then contemporary graduate students in economics would not have much promise of a career in the economics profession. And the economists of the Austrian school would not have much value to offer in addressing the problems of the contemporary world other than pointing backward. Surely there must be continual scientific advance in the research program if a school of thought is going to judged a viable alternative in the scientific community. Knowledge in economics does not just stop with the classic statements of 1948 or 1949, or 1962 or 1973, let alone 1931 or 1940. Didn't those works in 1980s, or 1990s, or 2000s contribute anything to the further development of the Austrian school of economics just as the works of 1948 and 1949 didn't just restate the classic works of 1871 or 1881, or 1890? If not, then shouldn't the modern Austrian school and its thinkers be ashamed of themselves for wasting time and money these past 40 years?

I know that Butler's effort was not intended for graduate students and aspiring professional economists. It was intended for laymen and beginning students. The Austrian school of economics, he is telling his audience, has much to offer that will explain our current situation better than the existing schools of economic thought. And I believe he is right. I also think Adam Smith and J. B. Say can tell us more about the current situation than much of what passes as economic analysis today. (Read the letters between Say and Malthus as a good start) I am in great sympathy with Butler's intentions, and the truth-content of what he is saying. And, let me be clear, I recommend that individuals read this primer and track back to the classic works. But I also think that if all that the modern Austrian school has done since 1974 is making it easier for people to understand what Mises wrote in 1949, or what Hayek wrote in the 1930s concerning business cycles, or what Rothbard wrote about monopoly in 1962 or what Kirzner wrote about entrepreneurship in 1973, then the cost and intellectual time would have been better spent on some other activity than the training of a generation or two of students to become economists and economics professors.

Economics is not literary criticism, despite having aspects of its work which could be so described. Economics is a science that must continually tackle problems in the world. The contemporary economist is a problem solver, and to the extent he/she is a follower of a school of thought it is because the ideas and concepts associated with that school help them in their quest to address those pressing problems about the operation of the economic system. Simply put, we are trying to understand the economic forces at work not on a blackboard, but instead in recorded human history and contemporary economic life. Economic theory (sometimes usefully developed on a blackboard, but not always) is the essential tool in that endeavor. If Austrian economics is to be an attractive set of ideas for the new generation, then it must be continually refining the essential tools for understanding the human condition. It must, in short, be a live body of economic theory development. The learning curve in economics must be upward sloping, if it is flat we are not improving, if it is declining, well that is really bad.

Just as Mises didn't just restate Menger, and Rothbard didn't just restate Mises, our efforts cannot be merely to restate and make more widely known and available the work of Menger, Mises, Hayek, Rothbard, and Kirzner. If that is all we current "Austrians" are doing, then perhaps it is a worthy business to be in, but what it isn't is being in the business of being an economist, and our value to the current discussion among economists about how to address contemporary problems will correctly be judged as dubious at best.

Pete's list of Austrian vices and how to avoid them should be read and discussed seriously (real names only no anonymous bs and/or pseudonyms permitted). It ain't a perfect statement, but it is a lot better understanding of the role that Austrian economics has to play in the intellectual activity of an aspiring economist than those that stress the secondary literature.