Saturday, September 15, 2012

Sample of one (well, two depending on how you want to count it) on the mainstream and openness to Austrian economics

Steve Horwitz's reply to Bryan is up. I found this interesting:

"In general, I think Caplan’s picture of mainstream economics is far too rosy. In fact, one could argue he is guilty of some “myside bias” of his own. Teaching at George Mason might give one a somewhat slanted view of that mainstream, given the array of eclectic and open-minded types who populate the halls there. Like Pauline Kael’s line about how Nixon could have won when “nobody I know voted for him,” there might be some availability bias in Caplan’s view of the mainstream of the profession. Despite the somewhat more open environment of recent years, the attitude of mainstream economists beyond GMU toward papers that lack mathematical modeling or statistical testing (or an experiment) ranges from uncomprehending to hostile. In the parts of the mainstream that Caplan inhabits, that is certainly less true. But it is also true that Caplan himself would only be viewed as “mainstream” within the halls of GMU. I suspect that in a randomly selected second tier Ph.D. institution, the mainstream is much less open to Austrian ideas than Caplan’s experience at GMU might suggest."

I have two little vignettes from American University - which is left of mainstream, often dissenting from the other side. First, my history of thought professor from last year told us that he would have liked to teach Austrian economics in our PhD thought class, but he didn't know it well enough to do it justice. There was no lack of openness on his part at all (even though he's by no means an Austrian) - in fact he respected Austrian economics enough that he wanted to do it well and knew he couldn't, but still told us that because he wanted to put it on our radar screen if we wanted to look into it.

Second, a friend of mine is TAing the undergrad history of thought class taught by another decidedly non-Austrian professor and he is teaching Hayek, I am told. This is nice for two reasons: first because he's teaching Austrian economics. But also because he is moving the class past Keynes. A lot of times history of thought classes stop at 1936 (for obvious reasons - there's a lot to cover and you have to rush through just to get to 1936), so there's a whole bunch of stuff mid-century that isn't "modern" and so isn't taught in other classes, but is also missed in thought classes. Hayek is one example, but another that this professor is teaching the undergrads is John Kenneth Galbraith.

There is no real reason why the mainstream should be closed minded towards Austrian economics. Disagreeing strongly with Austrian economics is not the same as being closed minded. Hayekian macro especially is something the mainstream should be very open to. Hayek essentially adds another marginal condition relating capital operating in different stages of the production process to each other, and that marginal condition includes an interest rate, which has interesting policy implications. Sounds pretty neoclassical to me. I may even try to write it up this winter when the insanity of everything else I'm working on ends.

1 comment:

  1. I'll double your sample size...

    We have specifically discussed Hayek in at least two of my classes: Environmental Economics and Scientific Methods (which is pretty much a philosophy of science class). In both cases, the overall presentation was certainly favourable.

    I was also speaking to one of the economic history profs who teaches a very popular course, "Crash and Crisis", at the Master level. The course is predominately geared towards Minsky and Kindleberger, but also includes a module on Schumpeter for example. We were discussing some of the key differences between Minsky's (deterministic) approach and that of Kindleberger and I asked him his thoughts on the Hayekian theory of low interest rates and mal-investment. His reply was that he wouldn't mind emphasising this a bit more, but his main problem with Austrian economics is that it's so amorphous. Having gotten found myself in countless contradictory and vague arguments on AE before, I can certainly sympathise.


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