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Cowenian Second-Bestism Smackdown

As Pete Boettke notes, “Tyler Cowen argues that in hindsight, we should consider the bailout to have been successful in averting a financial meltdown of the US economy.  He specifically asks me whether I can bring myself to admitting this.”

Boettke heroically says no. And Cowen is getting a good and well-deserved austro-libertarian smackdown on the Internets: a sampling:

My own previous comments on Cowen include Comment on Tyler Cowen’s “Kindle and DRM and Netflix too” (about his pro-copyright views); Wirkman Virkkala, the “Locofoco Agnarchist,” on the confused Tyler Cowen; What Kind of Libertarian Are You? (rebutting Cowen’s absurd smears of Mises Institutes as “nationalists”); and Things Go Better With Koch … ? (noting Charles Burris’s observations about “Kochtopus minions such as Tom G. Palmer [and] Tyler Cowen,” and “The precocious Tyler Cowen has gone on to be one of the most pliable instruments in the Kochtopus toolbox, especially when it comes to denigrating Austrian economics and the work of Ludwig Von Mises”).

For some other web commentary on Cowen, see Tyler Cowen: Statist, anti-Rothbardian agent of the Kochtopus; and David Gordon’s The Kochtopus vs. Murray N. Rothbard, Part II, which states, in part:

Grinder placed particular emphasis on Tyler Cowen, a brilliant student who had been interested in Austrian economics since his high school days. Cowen enrolled in an Austrian economics program at Rutgers, where he impressed both Joe Salerno and Richard Fink with his extraordinary erudition. When Fink moved to George Mason University, Cowen moved with him; and he completed his undergraduate degree there in 1983. Grinder considered him the next Hayek, the hope of Austrian economics.In accord with the elite universities policy, Cowen went to Harvard for his graduate degree. There he came under the influence of Thomas Schelling and gave up his belief in Austrian economics.

After he finished his PhD in 1987, Cowen was for a time a professor at the University of California at Irvine, and he used to visit me sometimes in Los Angeles. I was impressed with his remarkable intelligence and enjoyed talking with him. But I remember how surprised I was one day when he told me that he did not regard Ludwig von Mises very highly. Here he fitted in all-too-well with another policy of Richard Fink and the Kochtopus leadership. They regarded Mises as a controversial figure: his “extremism” would interfere with the mission of arousing mainstream interest in the Austrian School. Accordingly, Hayek should be stressed and Mises downplayed. (After the collapse of the Soviet Union, which led to new interest in Mises’s socialist calculation argument, this policy changed. The mainstream, though of course continuing to reject Mises, now recognized him as a great economist.) The policy was strategic, but Cowen went further – he really didn’t rate Mises highly.

Cowen eventually returned to George Mason University as a Professor of Economics. He is said to be the dominant figure in the department. Because of his close friendship with Richard Fink, who left academic work to become a major executive with Koch Industries and the principal disburser of Koch Foundation funding, Cowen exerts a major influence on grants to his department.

Although he is largely favorable to the free market and believes that the Austrian school has contributed insights, Cowen remains a strong critic of Austrian and Rothbardian views. He has published a book that sharply attacks Austrian business cycle theory, Risk and Business Cycles: New and Old Austrian Perspectives (Routledge, 1997); and in an article written with Fink, “Inconsistent Equilibrium Constructs: The Evenly Rotating Economy of Mises and Rothbard” (American Economic Review, Volume 75, Number 4, September 1985), he argued that a key feature in the economic theory of Mises and Rothbard, the evenly rotating economy, is fundamentally flawed. It was ironic that the hope of Austrian economics, according to Grinder, and the prime ornament of his stress on elite universities, wrote an article for the most prestigious economic journal in the United States critical of the theory Grinder wished to propagate. Cowen has also criticized libertarian anarchism, another fundamental plank in Rothbard’s thought. He has defended government funding of the space program and limited government subsidies for the arts.

One might object to what I have said so far. Although the heavy Koch support for Cowen did not advance Austrian economics, was not a flourishing Austrian program established at George Mason? If so, did not the generous fellowships offered by Koch organizations, such as the Claude Lambe Foundation, play a major role in this happy development? Fellowships were also given to those studying in the Austrian program at NYU.

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{ 2 comments… add one }

  • David K. Meller August 28, 2009, 3:17 pm

    It is a matter of opinion whether or not von Mises, Rothbard, Hermann-Hoppe, Walter Block, et al are “too extreme” or overly “radical”. However, I think that their works have been in publication long enough to begin to evaluate whether their so-called extremism or radicalism have been less effective than more moderate articulation of the libertarian and free market message.

    There may be reasons why a libertarian, depending upon his listeners or readers, may wish to embrace caution or moderation in his opinions about a policy issue, but the oft-repeated assertion by moderates that so-called “radicalism” per se is disagreeable to others is probably mistaken!

    I think that it is fair to say that their influence compares very favorably with that which can be attributed to more moderate expressions of libertarian advocacy, from Milton Friedman and James Buchanan to the CATO Institute and Reason Foundation.

    It would seem that the conservative mainstream is, if anything LESS friendly to the free market today than in e.g. 1980, when GOP candidate actually suggested–to the enthusiastic approval of the party faithful–to abolish the Federal Department of Education and Department of Energy. He never did so, of course, and subsequent GOPers–with the exception of Ron Paul–made their peace with runaway government and its inflation, taxes, and trillion $$$ deficits.

    Most new supporters of the Mises Institute (and similar institutes) seem to have been inspired by the passionate and consistant radicalism of people like von Mises, Rothbard et al. They did NOT embrace the libertarian viewpoint because of caution or moderation on the part of their teachers.

    Ron Paul encountered MORE opposition from GOP moderates during his Presidential run, then from overt socialists among the Democrats last year seems to tell us that intelligently presented laissez faire ideas certainly can be very strong and persuasive in building the mass movement for liberty and private property. Self described “moderates” may not have been as effective in building a constituency for freedom as they had hoped.

    PEACE AND FREEDOM!!
    David K. Meller

  • Ohhh Henry August 28, 2009, 4:33 pm

    There is nothing extreme or immoderate about telling the truth. One may refrain from telling the truth in order to spare someone’s feelings. But in discussing public policy to refrain from speaking the truth is absurd. It is not a question of sparing people’s feelings, it is a question of facts and simple, clear arguments concerning elemental (natural) laws of human behavior.

    Where the “moderate” libertarians fail is that they walk the plank and step away from the world of logic and truth, into the land of fairy tales told by daydreamers and self-interested fibs told by political hacks and rent seekers.

    I consider the argument that “you have to go along with the political spirit of the day in order to influence people” to be analogous to watching a bunch of looting rioters and concluding that instead of denouncing and resisting them, you should try to infiltrate their group, win their confidence by participating in the looting and then start to win them over and make them change their ways gradually. But once you have endorsed or participated in robbery you have no moral leg to stand on, no credibility, and in any case you’ve probably started to pull in so much dough from the looting that you are less and less able to find any reason to stop the looting. That is why Reagan was a sellout and a complete waste of everyone’s time, and it’s why Dr. No, Murray Rothbard, L. von Mises and Lew Rockwell are heroes.

    It might have been possible to fool yourself, back in the days of Reagan, Clinton or even George Bush II that big government and runaway spending weren’t all that bad and that things will even out over the long run as long as the “third way” is followed. But now that the house of cards is collapsing people are looking for rock-solid intellectual and moral ground on which to rebuild their lives, save their careers and replenish their savings. That is what brings them to mises.org and lewrockwell.com – because they offer clear and lucid facts and analysis, in contrast with the squishy intellectual and moral equivocation that exists everywhere else.

    I might be missing the boat but I don’t detect a large movement of disaffected citizens to other equally passionate – but illogical – solutions to the status quo (Keynesianism, Marxism, cult religions, whatever) so I conclude that it is the logical and moral clarity which attracts people to “extreme” (read: consistent) libertarianism, and not the passion of its defenders.

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