Observations by Steve Horwitz, which are so good I have no desire to attempt to paraphrase: As an Austrian, I am sympathetic to their arguments about the suicidal formalism of mainstream economics. I do think that such formalism gets in the way of our understanding the world outside our office/classroom windows. I agree that economics could and should be taught differently to both undergrads and grad students (see post earlier this evening on my interview experience this weekend). So along those lines, fine. However, as Pete [Boettke] also noted, this is not the way to raise these issues, especially by disrupting speakers etc. More important: What I wonder with all of these various criticisms of mainstream economics, especially by younger people, is whether its really about the economics or about the policy conclusions. Another way to ask that question is whether Austrians are welcome at the party. After all WE ALSO reject perfect markets and the idea of perfectly rational/informed consumers (and producers!). We also reject the formalism. But we also think markets work better than alternatives and that they they can indeed produce limitless growth for billions. So are we in or out? The problem at the base of this is that both the neoclassical defenders of markets and their critics accept the claim that the social benefits of the market are linked to the rationality of actors and the perfection of markets. Therefore, if you can show that markets are imperfect (market failure arguments) or that humans are irrational (agent failure, as in behavioral econ), you have thereby undermined the case for the superiority of markets. Note that both the neoclassical defenders and critics agree on this. So when critics like these rightly point out that markets arent, in fact, perfect, and human arent, in fact, perfectly rational, what can the neoclassical defenders really say? Theyve pitched their tent on those grounds, have they not? Looping back: the real question for these protesters is whether they are really willing to entertain the proposition that eliminating the suicidal formalism and doing disequilibrium analysis with fallible human actors might well give us arguments FOR the market, rather than against it. If Austrians are in, then we know that they are serious about the intellectual criticisms. If we are out, then this is all a smokescreen for anti-market ideologies. My experience with some of the post-autistic economics crowd (which raises similar issues in Europe) is that they are open to Austrians. I do not know about this group.
Posted on: Tue, 06 Jan 2015 03:07:34 +0000
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