Living in a kaleidic society

December 4, 2005

By jingles_sunderland (Morrisville, NC United States)

Economics is known and derided all over the world at the same time. It lies at the heart of most government policies yet it's predictions are mostly wrong. There are more jokes about economics/economists than about most other things and and the same time within the general economics community there are many scholars who seek to improve the academic standing of the discipline. For a subject which has a Nobel prize there is a remarkable degree of debate and disagreement about the nature of the beast.

This volume collects together a number of papers presented at a conference organised by the Institute of Humane Studies in 1974 at Royalton College in Vermont. This conference marked a resurgence of interest in the so-called Austrian School of Economics which today is supported by thousands of economists throughout the world many of whom have studied at one of the handful of American centres of research in the sub-discipline.

For the novice, looking towards an introduction to the Austrian school may I suggest Stephen Littlechild's excellent work, which although a little dated remains the best available, the Fallacy of the Mixed Economy.

The book is organised under four headings, Introduction, Theory and Method, Applications and Conclusion while the main contributors Murray Rothbard, Israel Kirzner and Ludwig Lachmann, who present tha majority of the papers represent three different strands of the Austrian scholarly tradition at the time.

Dolan presents a summary of the tradition as an introduction to the book, presenting some of the central concepts and highlighting some of the differences between the Austrians and mainstream economics. In the following section, Theory and History Rothbard and Kirzner set out their stalls on the basis of the Austrain Movement. History and the phiosophy of the schoola are more of Rothbard's area of expertise while Kirzner looks at methodolgy and implications.

For me, the third section was the more interesting for the elucidation of some key concepts and the differences between orthodox economics as we know it today. These papers are mainly the perogative of Kirzner and Lachmann although Rothbard contributes a paper on Austrian theory of money, a subject close to his heart and one which is vigorously promoted by the Mises Institute. For anyone new to this area these papers will open their eyes to some continuing controversies in the field. There is also an interesting paper by O'Driscoll and Shenoy on the general applicability of Austrian analysis to the then serious problem of stagflation rather than the failed analysis of the monetarist and Keynesian camps.

The conclusion is a rather elegant and concise paper by Lachmann in an appeal to further develop the Austrian tradition as a distinct entity but to do so in conjunction with some of the reformists in the mainstream, citing Leijonhufvud and Shackle, making common cause to bring those tools and analyses into the general discipline.

Whilst primarily of historic interest in seeing how the Austrian School was reinvigorated by the bringing together of those scholars , it is essentially a call to arms after all, this is a useful introduction to the central tenents of Austrian economics other than by studying the original texts.

At a time when the economics profession both in academia and out is under considerable intellectual attack from a number of positions it is rewarding to note that while orthodoxy is failing there is a considerable body of thought and continuing research out there which is both relevant and useful. My rating of four stars is primarily due to some of the papers being overlong and with lengthy citations which detract from the main analysis. No criticism of the editor is intended, just a personal view of the compositions.