Sam Grove is pestering me in the comment section of Russ Roberts's post on Keynesian willingness to argue with skeptics. I thought my most recent response would be of some interest to readers here.
[This initiation was somewhat out of the blue... it really is as abrupt as this] Sam Grove: "Daniel, how much effort have you put into studying the Austrian perspective on economics?"
Me: "Quite a bit Sam"
Sam Grove: "Did you learn anything?"
Sam Grove: "Did you find any substantive criticism of Keynesian economics?"
Me: "To be honest there is not much to find in the Austrian literature, Sam. There are good criticisms of the early Keynesians in Friedman, Modigliani, and Phelps. Lucas has some great criticisms that Keynesians have laudably and thoroughly incorporated into their understanding of the world. I think most Austrian critiques of Keynesianism are of low quality. For some it's through no particular negligence on their part - just poor argument. For other Austrians its because they have an obviously weak grasp of the material.
I don't value Austrian economics for what it has to say about Keynes.
I value Austrian economics for:
1. It's elaboration of how interest rate fluctuations affect the capital structure, which is a point mentioned by Wicksell, Keynes, and others but not nearly pursued with the detail that Hayek and others have pursued it. That is real value added.
2. A nice restatement of the price mechanism and market order. This one is obviously nothing new to the Austrian school, but it's still an important literature they've contributed to.
3. Often they have good treatment of value theory. I think the work on ordinal utility is quite weak and misunderstands the claims of cardinal utility theory. I am mostly referring to their work on intersubjective utility comparisons, which is quite good.
4. Austrian history of thought and economic history - while some of it is highly polemical and absurdist - is also often quite good. Rothbard is particularly good on this actually (that is not a sentence you'll hear me say very often).
One more thing Austrians do not do well at all is methodology. Most of that work is not of very high quality as far as I can tell. The other frustrating thing is that Austrians constantly make claims about what "the mainstream" thinks that isn't true at all. I'm not even just talking about the rowdier blogs. I mean things like the Companions to Austrian Economics and the Handbooks and things like that. Canonical, vetted stuff. That sort of hyperbole isn't really appropriate and turns a lot of people off, which is unfortunate for all parties I think.
That's what I do and don't appreciate about the Austrian school at least. What about you?"
Don't let anyone tell you Daniel Kuehn doesn't give the Austrian school a fair shake. I've got no interest in being belligerent just for the hell of it. If I like something I'll tell you I like it, and if I don't I'll tell you I don't and if I'm not sure I'll tell you I'm not sure. And if you're not sure, just ask.
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