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Steve Horwitz on “Austrian Economics Today”

Steve Horwitz delivered a nice talk on “Austrian Economics Today” at a FEE Seminar on June 8, 2009. In the talk, Horwitz is very complimentary of the Mises Institute [6:14 et seq., et pass.]. He focuses on their online publications and resources as their main contribution.

It’s interesting that he describes [7:25-] the Mises Institute “approach to Austrian economics” as “an internalist strategy” (he is careful to note that this is his, not their, terminology). By “internalist” he means they are interested in “building Austrian economics from the inside out”–putting together an expanding core of Austrian economics. Now I do not really object to this way of looking at it–except note that he views an “approach to economics” as a strategy. I think the approach to economics is and ought to be how you think it is best understood. It is first and foremost an attempt to understand what is true about economics. It is not a strategy. It is about understanding the truth; not a strategy about the best way to persuade others. In fact I think a focus on “strategy” tends to corrupt the pursuit of substantive truth. I wonder if Horwitz is letting too much of his own libertarian orientation–libertarians are too often overly focused on strategy and tactics–which would be ironic, given his criticism later in the talk of combining or linking politics/norms/values with economic science.

Anyway, I found it curious Horwitz not only talked about different strategies–I can understand that–but he seemed to so closely identify Austrian economics ideas or methodology, which have to do with substantive ideas, with the strategy. Seems off to me. (Also, it is interesting to note that Horwitz makes these comments about the “internalist” strategy at Leonard Read’s FEE–the Leonard Read who wrote Talking To Myself, a theme of which is “I am the only part of society I have been commissioned to save.” and “…each must look inside himself…Thus do individuals ‘reform’ society.”)

Also, later in this talk [40:00-], Horwitz talks about how Austrian Economics should be about interaction and engaging with the mainstream economists–Brad DeLong and others feel compelled to respond to Austrian cycle theory, for example, because Austrians are out there, engaging–via blogs and other means. He mentions the Marginal Revolution blog, for example. Now he is talking about the impact of Austrian bloggers here… and emphasizes we are part of the economic profession, and that this is a means of engaging. Of course, as he acknowledges earlier in his talk, the Mises Economics Blog is very influential… so does this mean we in fact engaging with the outside world? If so, whence “internalism”?

Also, regarding the term “Austro-libertarian”–he says he hates it. But he admits he’s fine with the idea of libertarianism influenced by Austrian economics. But he dislikes the term because it may turn off non-libertarians who may be potentially interested in Austrianism… and be swayed in our libertarian direction later (and even though he admits most of his audience here is libertarian too!). He tries so hard to distinguish libertarianism, a political philosophy, from economics… even though the latter used to be called political economy. I don’t understand this critique. He admits most Austrians are libertarians–like he is. He admits that there is nothing wrong with libertarians drawing on Austrian economics. He acknowledge non-libertarians who learn Austrian economics might be nudged in the libertarian direction. He realizes his very audience here and his fellow faculty members are virtually all libertarians. So what do I care that it bugs him that some strategy he has in mind may be hampered by my calling myself–quite accurately, as he admits–an Austro-libertarian? I am an Austro-libertarian: it’s the type of libertarian I am. And I frankly think any Austrian who is not a libertarian must be a misanthrope–and I bet Horwitz thinks so too. He says we should keep economics and politics separate. Sure. We do. We Austro-libertarians understand wertfrei. But AE can contribute to libertarianism; and most Austrian economists are libertarians for a reason: for the reason that if you are not a misanthrope, if you want peace, harmony, prosperity, and you understand economics, then you will reach libertarian conclusions. So I disagree that the term “Austro-libertarian” is “problematic.” Calling an accurate label that describes ones own views, and he views one hopes others will adopt, problematic, is an odd way to simply make the uncontroversial recomendation that we should distinguish fact and value. If we thought Austrian economics and libertarianism were the same thing, the very term “Austro-libertarian” would make no sense: it would mean “libertarian libertarian” (or Austrian-Austrian?).

Strangely, in the Q&A, he likes “anarcho-capitalism” because the “in-your-faceness” of it “leads to interesting conversations.” More strategical concerns. What if “Austro-libertarian” “led to interesting conversations”–would it be okay then?

{ 6 comments… add one }
  • t wirkman v September 18, 2009, 10:40 pm

    For what it’s worth (and it ain’t worth much), I dislike the term “Austro-libertarian” too. Hey: I’m not an economist, though I read a LOT of economics. I find the term “Austrian” goofy. Austria is a country. The country has nothing to do with to do with contemporary “Austrian economics.” So carrying on this atavistic nomenclature into a pairing with a political philosophy sporting a strong American history (with major contributions from England and France) seems doubly goofy.

    Of course, I have a lot of influences to my own thought, economic and political. These include Herbert Spencer’s revival of Scottish Enlightenment concepts and the French Liberal School’s distinctive development of Smithian and Sayvian themes. My preferred approach is to not name a school, but stress the main themes that cross disciplines and schools:

    methodological individualism
    emergent order
    co-operation theory
    etc etc

    As far as libertarianism goes, these days I’m cuckoo for locofoco.

    Oh, if I were young and on the make, and had scant conscience (not an uncommon combination), I’d stake out a claim as an “Austrian” economist who opposes libertarianism. I’d do my thesis on Wieser, and insist on using the basic tools of AE to explain how liberty is just as problematic as a mixed economy. The argument, after all, should be fairly easy to make, once you allow for the sloppiness of evolved orders, and the human expectation of and love for contrived orders.

    For my part, I am one of those rare individuals with an actual taste for emergent order and open civilization. But I realize my taste is not the normal taste, any more than my taste in classical music is the norm.

  • Stephan Kinsella September 18, 2009, 10:53 pm


    Semantics is not my forte’, I’ll admit. But if you find “Austrian” “goofy,” what about “Austrian economics”? What about Chicago school? What would you call Misesian-Rothbardian praxeological economics instead?

  • t wirkman v September 18, 2009, 11:09 pm

    Yeah, like I said, I do find AE a bit goofy a designator. Chicago School is less goofy in that it remains at the center of the movement. There is an actual school in Chicago that teaches “Chicago Economics.” Perfect!

    I like the term “praxeological economics” for the Misesian-Rothbardian approach. I find this approach most congenial to my own way of thinking. I was convinced of it, by the way, by the Count Destutt de Tracy. (But with Misesian argumentation in mind.)

    But I also like the focus of the Hayekian wing, which I think of as a revival of Spencerian themes. I would call this “evolutionary economics.”

    It’s interesting that both approaches are fairly clear in Menger. Praxeology was latent in the cause-and-effect discussions in his first book, and the evolutionary stuff quite explicit in his second.

    To those who combine approaches, as modern “Austrians” generally do, the approach could be “evolutionary praxeological economics,” or EPE for short. For those who take up the “knowledge” theme as central (revival also from Menger, but with credit only given to Hayek), add in the Shackleian term “epistemics.” It could be “EPE epistemics.”

    Well, to me the epistemic aspect is part of praxeology, as is methodological individualism, and just as the emergent order stuff is part of evolutionary research. So EPE works fine with me!

    But all of this is “constructivist,” as Hayek would say. It assumes a single mind can design the best designator. Hayek would probably sigh and say that “Austrian economics” is the best that disparate economists in a certain tradition could agree upon.

    I say it isn’t like the gold standard, it’s more like the Romanian Kent Cigarette Pack standard.

  • t wirkman v September 19, 2009, 10:20 am

    By the way, as irksome as a bad moniker like “Austrian economics” can be, a good and clever moniker can be FAR more irksome. What am I talking about? Why, “Masonomics,” of course!


  • Michael Wiebe September 20, 2009, 7:20 pm

    “libertarians are too often overly focused on strategy and tactics”

    How things have changed! It was only in 1990 that Rothbard wrote: “While Marxists devote about 90 percent of their energies to thinking about strategy and only 10 percent to their basic theories, for libertarians the reverse is true. Little thought or discussion has been
    devoted to strategic or tactical problems.”

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