I find Austrian economics interesting from a history of thought perspective and due to their prominence in current debates (thanks in large part to the internet). I also find Cantillon effects interesting, probably real, but not particularly important (and probably theorized a little backwards - a point a forthcoming paper of mine should make clear). Other than that I don't think there's much of anything useful in Austrian economics that isn't also in mainstream economics. You can say it's nice that they care about uncertainty or knowledge or that they think socialism can't work. That stuff's wonderful, but doesn't offer a compelling reason to declare oneself an Austrian. This isn't to say you can't get something out of reading Austrians. There's lots of great stuff to get out of reading Austrians. It's just to say that it makes a better literature than it does a modern school of thought. I think people who like to think of themselves as Austrians would be better off just thinking of themselves as economists that like to read Austrian literature (he might disagree with me on this, but I think of Ryan Murphy in much this way - hell, that's me to a certain extent).
So in that sense I feel like I'm not as dismissive of Austrian economics as Krugman and DeLong are, but obviously I still tick off a lot of Austrians...
*****
...but I can see what motivates Krugman and DeLong.
Krugman is pretty much considered a monster by Austrians. There are Austrian blogs dedicated to criticizing him. Those not so designated have him as a regular feature. Peter Boettke wrote this of Krugman when he won his well-deserved Nobel: "the Swedes just made perhaps the worst decision in the history of the prize today in naming Paul Krugman the 2008 award winner...today I would say is a sad day for economics, not a day to be celebrated. Mises supposedly said during his dying days that he hoped for another Hayek, as I am picking up my jaw from the floor I am hoping for another Samuelson or Arrow to get the award rather the hackonomics that was just honored."
Steve Horwitz leaps from Krugman thinking WWII got us out of the Depression to: "In Krugman’s version of Orwell’s Newspeak, destruction creates wealth, and war, though not ideal, is morally acceptable because it produces economic growth... To argue as Krugman does is to abandon both economics and morality. Big Brother would be proud."
We are regularly told not to judge Austrian economics by the crazy "internet Austrians" - so I'm careful here to select people that are considered the upstanding citizens.
Of course, it's precisely things like this that create the crazier "internet Austrians".
It is not a very easy bunch to talk with.
It's in precisely this environment of a flame-war over Krugman that Krugman remarks on the tendencies of this small group of economists and hangers-on that appears to be obsessed with him. That's not particularly outlandish IMO. If Krugman called Boettke's work "hackonomics", I think it would be fair for Boettke to strike at the character of his accuser. As far as I know Krugman's never said that of Boettke. This would also be the case if Krugman said Horwitz abandoned morality and that Big Brother would be proud of him.
The volume of the attacks on Krugman dwarf the response. We can pretty much count Krugman's forays into Austrian economics on our hands: the Slate piece, the discussion of the sushi model, Murphy's inflation prediction, Krugman having the gall to not appreciate Hoppe saying he should be spoken to like a child, this one from yesterday, etc... In contrast, you cannot go for a single day without a big-name Austrian mentioning Krugman disparagingly. And when Krugman does respond it's more often of the "your ideas seem utterly wrong and fringe" not of the "you're a warmonger" variety.
So while I completely agree and am happy to say that Krugman doesn't really appreciate the depth and breadth of the Austrian position, I find it very hard to point the finger at him on this sort of thing.
*****
I also want to call attention to this particularly excellent insight by Krugman about Austrian economics: "Its devotees believe that they have access to a truth that generations of mainstream economists have somehow failed to discern"
I don't know if Austrians really understand how infuriating this is or how stupid it makes them appear. When people already think that order in human society is spontaneous and not planned, when they already see politics without romance, when they already think that capital and labor are heterogeneous, when they agree that relative prices drive behavior - getting told day after day after day that they don't think these things and they ought to forces them to either conclude (1.) the accusers don't know what they're talking about, or (2.) it's not worth talking to the accusers any more.
This accusation is very hard for "reasonable" Austrians to run from. It's one of hte major theses of Peter Boettke's new book, which has been widely celebrated.
I, like Krugman, consider the recent growth in Austrian economics to bring some real costs with it for society and for the profession (I probably see a few more benefits than Krugman does). Since I apparently have something of an audience I've found it worth confronting these views that (to use Krugman's phrase) "they have access to a truth that generations of mainstream economists have somehow failed to discern". As efforts like John Papola's and movements like the Tea Party bring more people in that seems even more important to me to address. But lately I have been leaning more heavily toward the second option: it's not worth talking to the accusers any more.
I've had lots of people email me or comment on the blog and let me know that they've dropped Austrian economics and that my blog played a role in that. That is encouraging. Good economics matters to me - that's what all this here and all my effort professionally is all about. It's not so much that Austrian economics is "bad economics" - that list of truths that Austrians think they have special access to that I had above is good economics. It's that there's also a lot of bad economics and bad faith and a willingness to dismiss good science that pervades that community.
But I don't know how many are really going to be convinced, and there are many other things I could be doing. I was thinking the other day about Boettke's mainline/mainstream distinction. I could write a whole paper on how the greatest producers of Smithian economics today are Arrow, Romer, Krugman (for the major themes of the invisible hand, growth, and trade), and Stiglitz (for the scraps - efficiency wages, credit rationing, asymmetric information, monopoly power - all originally major arguments of Smith). It would be a very strong argument. But the people that would care are - I fear - unmovable, and the rest won't care. I'd be much better off writing about the S&E labor market or expanding my work on hiring credits to the North and South Carolina programs or time use decisions in the household.
Both paths are good economics, economics I'm excited about, and questions that are important. But the latter set is distinctive in that people seem to appreciate the contribution. When I tell people in the S&E workforce community that I and people who think like me think that it's important to understand the role of the market process in the S&E workforce, they've pretty much accepted that. When I tell people in the Austrian community that I and people who think like me consider it important to understand the role of the market process in generating a flourishing society, they often refuse to take "yes" for an answer and insist on explaining it to me. That gets old, and I have to confess it sometimes makes me wonder how much substance is really there to engage.
It really goes back to that Boettke interview where he claims that mainstream economists only think about economics 9-5, and people like him think about economics 24/7. It's a total presumption of bad faith, and it makes him impossible to take seriously.
ReplyDeleteOh god I was so furious when he said that.
DeleteWhat's frustrating is that Boettke is a REALLY sharp guy with great thoughts and maybe the best command of that literature of any living economist. He is a font of insightful points.
I just don't know why he's so persistent in trashing other people.
I literally went to sleep last night turning over some ideas that occurred to me in recent discussions of growth theory.
DeleteNo economics dreams last night, so perhaps not 24 hours a day... but then there are nights when I do dream about economics (doesn't make much sense, but that's to be expected!).
He is way off base, and it's not just a swipe - he doesn't seem to be aware that he's way off base.
Same here, but for some discrete choice models I'm working on, so I'm equally insulted. The translation of that statement is essentially that 'mainstream' economists don't care about economics as much as he does, and if he genuinely believes that, then he really can't have ever interacted with any of the 'mainstream' economists he's talking about.
DeleteBy the way, the Krugman comments aren't the worst I've seen. I think the worst was calling the Roth/Shapley Nobel a "prize for socialism."
A prize for central planning I believe it was - yes. Although that wasn't Boettke was it?
DeleteWhatcha working on?
Ah, sorry, you're right, it was Robert Wenzel, who certainly shouldn't be taken as seriously ex ante at Boettke. My mistake.
DeleteBoettke asks Krugman to deal with the scientific literature in Austrian economics. Kuehn responds by using one of my weekly Freeman columns as his exhibit A against Austrian Economics. Fine, from now on, every time I want to show what's wrong with mainstream economics, I will no longer look at the journals, but instead I will find op-eds written by economists in small-circulation outlets and use that as my target.
ReplyDeleteCome on Daniel, you're better than that. And you wonder why Austrians are difficult to deal with? Physician heal thyself.
Yes,I've written polemics against Krugman, but in polemical outlets. What I don't do there is dismiss an entire school of thought based on the popular writings of its practitioners. I simply called that argument of Krugman's ridiculous. If Krugman wants to dismiss Austrians, he ought to grapple with what Austrians have to say in peer-reviewed journals, just as Austrians grapple with the mainstream's scientific work. But of course that would mean actually reading real work rather than lazily skimming a few blog posts.
I honestly don't know why I bother.
Ummm... I'm not responding to Boettke, Steve. I'm reacting to the fact that DeLong now has a post up.
DeleteI agree with Boettke on that - I'd love for Krugman to look at the literature. I said in this very post that I think he doesn't grasp the breadth and depth of Austrian contributions. This is exactly what I mean by "not taking yes for an answer".
This is a blog post, responding to a Krugman and DeLong blog post about a social media website. This is where a lot of economic discourse goes on and where a lot of people are reading about it.
Besides, how is it called for to write like that even in a popular setting? The volume of attacks that Krugman gets far exceeds anything he tosses back and you can't ignore that when you're trying to figure out why he lashes out in the blogosphere.
re: "If Krugman wants to dismiss Austrians, he ought to grapple with what Austrians have to say in peer-reviewed journals. "
Yes - I said he needs a better grasp of the depth and breadth of what Austrians actually say, didn't I?
This comment has been removed by the author.
ReplyDelete(Oops I misread your post. I thought Daniel you were denying that Krugman had said WW2 got the US out of Depression.)
ReplyDeleteHalfway out. The most convincing evidence is that monetary policy got us halfway out too.
DeleteBut the people that would care are - I fear - unmovable, and the rest won't care.
ReplyDeleteYou're probably right about that. It's partly why I stopped stressing my point about Hayek and Sraffa; mainstream people weren't surprised that I thought Sraffa had a valid point, while Austrians were not likely to agree with me.
LK loves that one, so you've got that (in the same way that Bob Roddis loves my RAE piece, of course!)
DeleteDaniel,
DeleteWho is LK?
Yes, as Aidan says below there's a blogger known as "Lord Keynes". I really don't like referring to him as Keynes so I call him LK. The short hand is common on Bob's blog although maybe not for my reasons.
DeleteOn the topic of Hayek-Sraffa-Keynes, see Glasner's newest.
DeleteMy absolute favorite reaction to Krugman's Nobel Prize was Russ Roberts saying "Today’s intellectual climate is a taste of what it must have been like to believe in liberty in 1933" and that Krugman was "an opponent of liberty."
ReplyDelete(http://cafehayek.com/2008/10/krugmans-prize.html/comment-page-1)
HA! I must have missed that.
DeleteIt really is a hostile atmosphere.
I'm pretty sure Russ Roberts was referring to Roosevelt and the New Deal, not to the Nazis.
DeleteI was boggling at the comment, but this has to be right. In that context it makes sense.
DeleteDavid,
ReplyDeletePresumably he's referring to "Lord Keynes": http://socialdemocracy21stcentury.blogspot.com/
"I don't think there's much of anything useful in Austrian economics that isn't also in mainstream economics."
ReplyDeleteI think Free Banking is an important issue that isn't in mainstream econ. Why isn't it at least discussed as a theoretical possibility, and why should we assume a priori that a central bank is optimal?
Very good post by Selgin on this topic: http://www.freebanking.org/2012/12/03/fedophilia/
Krugman's book on Int'l Econ. supports free trade and discusses it at length. So why don't finance/macroeconomics textbooks even mention free banking?
I agree this would be interesting to hear more about.
DeleteIt's not quite true that the mainstream doesn't discuss it. Charles Goodhart is the usual citation and I think people simply consider him decisive. And of course a lot of the justifications for central banking take the absence of central banking as the comparison.
It is hard for me to assess whether this is actually under-discussed or whether it's comparable to an anarchist complaining that nobody in political science asks why we should have a state at all (the answer being "we've all agreed and if you want that to change its incumbent upon you to furnish a new argument").
There's also an extent to which there's no point in talking about a phenomenon that doesn't exist. The only people that really talk about gold standard banking any more are economic historians, right?
These are just possible answers - this is an area where I'd agree I'd be interested in more discussion. You'll notice I don't write much about it one way or the other precisely because I don't know much about it. I have raised a concern that Keynes raised in the early thirties about why free bankers wouldn't respond to a crisis that delivers a shock to their balance sheets and an increase in uncertainty the same way everyone else does: by pulling in, not by expanding. The only answer I ever got to that was "those sorts of shocks wouldn't happen under free banking".
It's not an area I know well - I try to stick to areas that I do know. But I would agree that even if it's a problematic neglect, at least it would be interesting to se more of that.
Yes, you're right about Goodhart. I guess what I mean is that free banking is never discussed in textbooks. Incorporating a theoretical/historical discussion of the Mengerian theory of money and how coins, banks, banknotes, and clearing systems developed would be useful and interesting for students, I think. It would take half a textbook chapter at most. Something like a condensed version of part I of Selgin's Readings in Money and Banking: http://www.terry.uga.edu/~selgin/econ4100.html
DeleteOne thing about historical discussion of the gold standard is that so many people seem to get it wrong. E.g. Krugman (I don't mean to pick on him!) said here: "under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933. Oh, wait."
http://krugman.blogs.nytimes.com/2012/08/26/golden-instability/
He's implying that the gold standard caused these crises. Certainly, that's a part of it, yet you can't talk about the 19th century panics w/o mentioning the restrictions on branch banking and requirements for purchases of state debt to back currency issue (i.e. restrictions on free banking). You might say, "Who cares, that's old hat," but this type of historical inaccuracy still tinges a lot of modern debate. The Free Bankers' (White/Selgin) understanding of this history is just better and more complete imo.
I do hope you find the time to delve into the literature someday. Selgin's Theory of Free Banking is online as a Kindle version here: http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=2307
I also like White's "Theory of Monetary Institutions" as well as the reading packet linked above.
Re: balance sheet shocks--White has written (I believe) about the private clearinghouses and how they responded to panics. If not hampered by regulatory restrictions, they likely would have done a better job. Even assuming that the system inevitably contracted after crises, a central bank could be limited to a "night watchman" lender of last resort role, while allowing the free banking system to manage the money supply in normal times. But you're right, I need to learn more about Monetary Disequilibrium and Yeager to address the issue of crisis response.
I don't mean to insist that "I'm right, you're wrong! Free Banking RULZ!" But White and Selgin are both very thoughtful, interesting writers who are highly worth reading. They're the true modern heirs who have done the most to advance Austrian thinking on monetary matters, and it would be a pity if you didn't get to know them better. That's all.
I'm not an economist, and only ever formally took intor econ decades ago, so my impressions will be coloured by that, but Daniel puts his finger right on something I've noticed: the presumption tha everyone else is blind. This looks buffoonish to outsiders like me frankly. And it also seems to lead to the kind of amped-up terminology I have bitched about over other blogs. It's like anti-abortionists who think calling everything murder and everyone murders drowning in ionnocent blood advances their case. I see the equivalent from self described Austrians all the time.
ReplyDeleteAnd not mentioned here the complete conflation of positive and normative theories. When challenged everyone denies they have confused them, but just look at how the term "Keynesian" is actually *used*. It's like confusing Darwinist and Social Darwinist, and not noticing.
I'll join the chorus on this "presumption that everyone else is blind" refrain.
DeleteI have friends that "converted" to Austrianism in the wake of the financial crisis. The effect it had on their outlooks and interactions with other people was profound. It was as if they had discovered the Philosopher's Stone of economic knowledge and were now privy to a great economic truth that had hitherto eluded everyone else. Worse, some began to cast themselves as public intellectuals, whilst parroting dubious catchphrases and atavistic prejudices (on empirical stuff in particular). The irony is that these were the same people I have known for years, and let's just say that intellectualism was never a charge you could lay before them in the past.
Of course there are many insightful and reasonable Austrians that are well with listening to. Bob M, Jon C, etc. My problem, however, is that it has the same effect as many extreme ideologies; it convinces (some) adherents that they have been closet intellectuals all along and their opinions are now obviously more correct than anyone else's. Religious zealots get a hard time, but in my experience few people are more self-righteous than "born again" Austrians (and certain libertarians for that matter).
Some aspiring sociologist really needs to study the interactions between these various sub-groups within academic economics. As an outsider this entire catfight is more about what amounts to a sociological phenomenon than anything else.
ReplyDeleteWhile I agree that the presumption of that everyone else is blind is a bad thing, I don't think it is too difficult to argue that Austrian economics is probably treated as something a kin to heresy by non-Austrian economists. And heresy is particularly troublesome to the orthodox in times of stress (since times of stress lead to questions regarding authority, etc.). Is this a time of stress in academic economics? Probably, what with everything that has happened since 2007.
It's much less of a 'catfight' than you think. It's not like we're seeing these guys in journals or conferences. The only time I have to think about them is when they kick up a fuss on the internet. To be fair, they've done a really good job, via things like hijacking wikipedia and making that ludicrous Keynes vs. Hayek video, to make it seem to outsiders like there's some kind of actual debate and dichotomy.
DeleteYou wanna take over the blog for a few weeks so I can get some work done, Pseudonymous? You've been dead on in everything you've said today.
DeleteNo way, man. I have matlab 'busy' screens to intently stare at.
DeleteHow does one "hijack" Wikipedia pray reveal? It is after all a resource based on crowd sourcing. That's just a really weird sort of accusation to make.
DeleteAnd frankly, you're engaging in exactly the sort of discourse about heretics one would expect out of a Orthodox believer. This doesn't speak to the truth about the orthodoxy or the heterodoxy.
In fact, as I understand it, don't these Austrian fellows have their own journals, conferences, etc.? And isn't it fair to say that the fight within Wikipedia is merely one of many proxy's for the fighting that is going on within academic economics generally over these big macro issues? Daniel has repeatedly denied this sort of thing, but honestly, the way that the economics blogosphere obsesses over this stuff one can't help but see a lot of fire there.
Ya what's your background/whatcha working on with these discrete choice models? Forgive me if you've told me before. Sometimes - for whatever reason - its harder to remember personal info I've learned about a pseudonym.
DeleteHere's something lighthearted to walk away from this discussion with: http://faculty.fgcu.edu/bhobbs/Economists%20Meme.jpg
DeleteAnyway, it all just goes to show that at least on macro issues economics is pre-paradigmatic (which is a good enough reason to be really skeptical of what economists say on macro related issues). :)
Delete"It all just goes to show that at least on macro issues economics is pre-paradigmatic"
DeleteDisagree, and we've been over this before I believe. The conditions laid out for paradigmatic science are all quite easily met by economics of all varieties. Pseudonym is right - you really have to mistake the popular discussion for the scientific discussion to conclude what you're concluding.
There are dissenting fringes. I think a lot of this is due to the fact that people are interested in both normative and positive questions and the two are often conflated or considered in concert. It's perfectly fine to consider them in concert - it's more efficient that way. But we shouldn't conflate them.
They do have their own journals. My point is that the academic interaction is basically nil, and, even then, academically they are a much smaller proportion of the population in terms of professors and articles published, so things like the Keynes v Hayek video severely overstate the nature of the 'debate.' Also, by "hijacking wikipedia" I mean misframing (implicitly or explicitly) fringe critiques as more salient than they are--I posted a different comment on some other post on here about it. To be clear, I don't think most people are purposely misframing the debate (except that goddamn video). I just think people misunderstand, like it seems you have, that the state of the blogosphere is simply not the state of the discipline, and so the "macro warriors" are mostly just a couple really persistent bloggers.
DeleteIn fact, it's a little sad how so few economics academics have embraced public scholarship, and even fewer talk about actual academic work, rather than current events.
I totally agree with that meme, btw, although I'd replace the very last image with http://cameron.econ.ucdavis.edu/stata/stata10regression.gif
Daniel: I'm, broadly, in IO. Any more specific and I might not be able to hide behind this pseudonym!
DeleteThe Austrians in mainstream journals point is a delicate one. There's good interaction, and this is a good thing.
DeleteSuffice it to say:
1. There seems to be a lot more Austrian work that is hermetically sealed off either in the Austrian-specific venues or in books that pretty much only Austrians read.
2. A lot of the Austrians that do make inroads do so simply because they are doing good economics that mainstream people recognize as mainstream economics, and
3. The work done by Austrians in mainstream venues is very different from the sort of conflicts that people imagine exist because of the things that get said in Keynes/Hayek raps or in the blogosphere. In a similar vein, many of the accusations popularly associated with the mainline/mainstream dichotomy would not be recognized by mainstream economists as something they reject or lack.
Are we just talking macro, or what? There is a significant contingent at the Southerns. You can find them there. According to the first journal ranking I found, Journal of Law & Economics is ranked 16th. Public Choice is ranked 57th. If you think that Austrians aren't publishing there, you aren't looking at their CVs. There are also MANY inroads in mainstream development journals. The emphasis has been for a long time to reach out to the rest of the profession. The "popular" stuff has just surged ahead recently.
DeleteIt's not like I disagree with everything you say on this, but too much of this is sour grapes over how well libertarians have done with marketing themselves in the last five years.
And again macro is a bit different from all of this, but part of that has been that the emphasis has been on applied micro for several decades now. That's beginning to change.
Ryan -
DeleteNot sure if this is to me or the original claim by Pseudonymous.
If it's to me I agree with everything you said - that was the point of my last comment. I do not think you can argue that Austrians don't publish in mainstream journals. But there's also this parallel literature where a lot of the really "Austrian" stuff gets done. I think Austrians writing in the mainstream are really just producing mainstream economics of the sort that Austrians are interested in doing - it would be very hard to pick a lot of that out as "Austrian" if you didn't know the author.
This is a good thing - as Peter Boettke says, schools of thought should sort of disintegrate into the rest of the field.
Disagree, and we've been over this before I believe."
DeleteNo, we haven't. The one time I proposed it in the past you just waved it off. Suffice it to say that I do not find a mere declarative statement terribly convincing.
"There are dissenting fringes. I think a lot of this is due to the fact that people are interested in both normative and positive questions and the two are often conflated or considered in concert. It's perfectly fine to consider them in concert - it's more efficient that way. But we shouldn't conflate them."
This all sounds very much like the sort of thing one would see as part of the discourse of a pre-paradigmatic science. Re-read Kuhn and you'll see what I mean.
"I just think people misunderstand, like it seems you have, that the state of the blogosphere is simply not the state of the discipline, and so the "macro warriors" are mostly just a couple really persistent bloggers."
I am suggesting that where there is smoke there is fire. In fact, if you look at this from a sociology of knowledge perspective this sort of small group within a larger field action is what one should expect in a field where claims to authority are in play and an orthodox contingent is playing a rearguard action. That doesn't mean that the orthodox or heterodox are correct (I can't tell you either way), but I can say that this looks exactly what I describe it to be.
Ryan,
DeleteI do agree. There is a lot of sour grapes going amongst conservatives and liberals as libertarianism gains a foothold in the realm of politics. Competition always annoys the heck out of monopolists and duopolists. :)
re: "No, we haven't. The one time I proposed it in the past you just waved it off"
DeleteNo, if I recall I addressed it in detail. I'm happy to say you've made your case and I found it unconvincing. Give me the same credit.
re: "Suffice it to say that I do not find a mere declarative statement terribly convincing."
Well that's why I referenced our prior discussion. I don't have time to re-litigate it again just to get to the same result right now.
Besides, you pretty much stick to declarations here, so you shouldn't get that upset over it.
re: "This all sounds very much like the sort of thing one would see as part of the discourse of a pre-paradigmatic science. Re-read Kuhn and you'll see what I mean."
Could you give me a page number? I don't recall Kuhn ever suggesting that concerns with the normative implications of scientific answers made something pre-paradigmatic. If you are just saying the fringes are less reasonably considered scientific because they conflate normative and positive questions I'd agree with you on that as a general statement.
I think you are putting a very odd spin on all this.
No, you basically said, that's all very interesting, etc. but you're wrong. Indeed, you summed up your reply in two sentences as I recall. It's you're blog. Look it up and prove me wrong. :)
DeleteKuhn is very explicit on this point; you should expect a pre-paradigmatic science to have a number of competing schools on a particular subject and that their discourse is rather contentious (after all, the standard Keynesian vs. Austrian view is hardly the only viewpoint on the business cycle and all that jazz and the language used in that debate is downright rather intemperate). This is very early on in the work.
Right but that's the whole point. There is a consensus. The principle arguments are over what mechanisms are particularly relevant at a point in time, because there is obviously not a single cause of recessions. I think you have a very skewed perception of the state of economics, and of course the internet Austrian phenomenon has actively fostered this perception.
DeleteSome people think we are at a crisis point where we might get a new paradigm in macro. I think that's probably not likely, but who knows. If that does happen it will be an agent-based macro. But being in a crisis and a potential paradigmatic transition doesn't mean that you're pre-paradigmatic.
Quoting Wikipedia just because it's easy: "The first phase, which exists only once, is the pre-paradigm phase, in which there is no consensus on any particular theory, though the research being carried out can be considered scientific in nature. This phase is characterized by several incompatible and incomplete theories. If the actors in the pre-paradigm community eventually gravitate to one of these conceptual frameworks and ultimately to a widespread consensus on the appropriate choice of methods, terminology and on the kinds of experiment that are likely to contribute to increased insights, then the second phase, normal science, begins, in which puzzles are solved within the context of the dominant paradigm."
This obviously doesn't describe any field in modern economics. We have a consensus conceptual framework. We have a consensus on appropriate methods. We have a consensus on terminology. We have for quite a long time - at least two centuries. I'm not as well versed in the older literature to say if it predates that.
You're either butchering economics, butchering Kuhn, or both.
Well, obviously I am not butchering Kuhn because what you quoted from Wikipedia is exactly how I described Kuhn's argument (though a bit more fleshed out).
Delete"This obviously doesn't describe any field in modern economics."
That's your assertion. :)
On the Wikipedia kerfuffle, I'm surprised that you didn't link to this (maybe I missed it though): http://xkcd.com/1167/
"I am suggesting that where there is smoke there is fire."
DeleteSmoke in Detroit doesn't mean that there's a fire in San Francisco. What you are consistently misunderstanding is that not only is the blogosphere not the discipline, but there isn't much overlap, period! Are there any people in the blogging wars who are actually participating significantly in the macro literature? I'm not in macro, so maybe I'm a little outside the loop.
I am not misunderstanding anything. I understand that is your and Daniel's argument. My response is that I do not find it convincing; indeed, I think it is the sort of remark that one ought to expect when it comes to protecting the good name of economics (har!) from a claim such as mine. The blogosphere is in fact probably a somewhat less polite reflection of what is going on higher up on the food chain in other words, so saying that there is some sort of Chinese wall between the two doesn't really make much sense from that perspective.
DeleteLike I wrote initially, an aspiring sociologist really needs to look at these various sub-groups within this overall population. I've read some rather rewarding research on physicists and chemists by sociologists who did the same in those fields and I think it could work here too (if it hasn't already been done).
I really wish people felt themselves free to butcher Kuhn. Why anyone respects him baffles me.
Delete"My response is that I do not find it convincing"
DeleteSince you don't seem to have any evidence against it other than your gut feeling, and you refuse to believe anything but, there's no point in trying to convince you otherwise, I guess.
Indeed, what this reminds me of is the artificial distinction between analytical and continental philosophy (not an original idea to me, it is something that has been acknowledged by various philosophical renegades and rebels for a couple of decades now). The distinction is taught like its some bright line when in fact it was never so and I can show you any number of so-called analytical philosophers (just to go with one of the supposed differences) who write jarringly dense, baroque prose and so-called continental philosophers whose writing is as clear and readable as one can hope from a philosophical text. Perhaps it isn't a perfect analogy but I think it fits fairly well (at least to this outsider).
ReplyDelete"You can say it's nice that they care about uncertainty or knowledge or that they think socialism can't work."
ReplyDeleteI'd say they did a bit more than just "care about" uncertainty or knowledge, or "think" socialism can't work. They actually *theorized* about these matters, and did so when not a lot of other economists were.
"Krugman is pretty much considered a monster by Austrians"
What infuriates Austrians about Krugman, I think, is the combination of the following elements (all of which are necessary and no incomplete combination of which would be sufficient for Krugman's ability to infuriate Austrians) 1) his political ideology, 2) his Keynesianism, 3) (what they see as) his utter intellectual dishonesty, 4) his great rhetorical skills that let him get away with this dishonesty (his rhetorical skills that convince a lot of people that it's not him being dishonest but his opponents) 5) his prominence in the public intellectual arena. It's this combination that makes Krugman the main economist/intellectual that Austrians love/hate to hate.
"We are regularly told not to judge Austrian economics by the crazy "internet Austrians" - so I'm careful here to select people that are considered the upstanding citizens."
ReplyDeleteI think Horwitz's reply to this point in the comments is largely appropriate and correct here.
"Of course, it's precisely things like this that create the crazier "internet Austrians".""
Meh, this may play a causal role in that, but to a a much larger extent I think these two (Horwitz's comments & "crazier internet Austrians") have one or more common causes (as well as several other individual causes)
"It's in precisely this environment of a flame-war over Krugman that Krugman remarks on the tendencies of this small group of economists and hangers-on that appears to be obsessed with him. That's not particularly outlandish IMO. If Krugman called Boettke's work "hackonomics", I think it would be fair for Boettke to strike at the character of his accuser. As far as I know Krugman's never said that of Boettke."
No, but that doesn't seem to be the proper comparison. A more appropriate comparison would involve the question whether Krugman has ever said something similarly insulting about other prominent Austrians (so not about Boettke individually). And I would easily bet $100 or 3 bitcoins that he has.
"The volume of the attacks on Krugman dwarf the response. "
ReplyDeleteWell, obviously, but again that is not the proper comparison. Krugman is just one person and the Austrians are a whole bunch of people (especially if one were to include not just professional economists, but also bloggers and commenters)
The better comparison would be between attacks by Keynesians in general (or even just those Keynesians who are of the Krugmanian persuasion) on Austrians.
And even then one could add that in general there seems to be less reason for people who are in the mainstream to spend time attacking people who are not, so that regardless of who is intellectually or morally superior the fact that Krugman and fellow Keynesians spend less (average or even total) time (more or less impolitely or viciously) attacking Austrians than the other way around, it's unclear what significance this have, let alone whether it provides an argument for your assertion that "So while I completely agree and am happy to say that Krugman doesn't really appreciate the depth and breadth of the Austrian position, I find it very hard to point the finger at him on this sort of thing."
To be sure, as an argument for that claim you also wrote "And when Krugman does respond it's more often of the "your ideas seem utterly wrong and fringe" not of the "you're a warmonger" variety."
3 Things in response: 1) I'm not sure whether it is less offensive to call somebody "crazy" or a "cultish" than it is to call them a warmonger, 2) I'm pretty sure (I don't feel like spending the time to document it but I'd be comfortable making a bet) that Krugman has also accused Austrians of severely immoral things, 3) I think (but am not sure) that you exaggerate the way Horwitz was supposedly mischaracterizing Krugman's views on the morality of war spending (unless it wasn't Horwitz you had in mind when you referred to somebody calling Krugman a "warmonger")
"I also want to call attention to this particularly excellent insight by Krugman about Austrian economics: "Its devotees believe that they have access to a truth that generations of mainstream economists have somehow failed to discern"
ReplyDeleteI don't know if Austrians really understand how infuriating this is or how stupid it makes them appear."
Yes, I can see and appreciate your point, but I can also see and appreciate the point of the Austrians that mainstream economics has gone astray for a long time and has missed some important insights that the Austrians do take seriously.
"When people already think that order in human society is spontaneous and not planned, when they already see politics without romance, when they already think that capital and labor are heterogeneous, when they agree that relative prices drive behavior - getting told day after day after day that they don't think these things and they ought to forces them to either conclude (1.) the accusers don't know what they're talking about, or (2.) it's not worth talking to the accusers any more."
Again, I see and appreciate your point but I also see and appreciate the Austrians' point that mainstream economics, although it may pay lip service to these insights or even has incorporated them in some ways or to some extent, doesn't actually do them justice fully or at all in the way in which it deals with them. Personally I simply don't know nearly enough economics to assess who is (more) right. And I fully believe that many Austrians, especially "crazy internet Austrians" wholly underestimate what mainstream economics *has* accomplished or does acknowledge in these areas.
Austrians may (or may not) be right that mainstream economics has failed to incorporate or incorporate properly a number of important insights, but it *is* very easy or natural to go from that possibly correct point to the more grandiose point that the mainstream is just stupid or dishonest and the Austrians are correct and have definitve replies to to all of the mainstream's objections etc. And I think there *is* a strong tendency among Austrians (especially but by no means solely among non-professional Austrians) to make this kind of inference, and thus to come across as strange, immature or cultish even.
"I've had lots of people email me or comment on the blog and let me know that they've dropped Austrian economics and that my blog played a role in that. That is encouraging. Good economics matters to me - that's what all this here and all my effort professionally is all about. It's not so much that Austrian economics is "bad economics" - that list of truths that Austrians think they have special access to that I had above is good economics. It's that there's also a lot of bad economics and bad faith and a willingness to dismiss good science that pervades that community."
ReplyDeleteYes.
"But I don't know how many are really going to be convinced."
Very few will. But the same goes for the other side(s).
"When I tell people in the Austrian community that I and people who think like me consider it important to understand the role of the market process in generating a flourishing society, they often refuse to take "yes" for an answer and insist on explaining it to me. That gets old, and I have to confess it sometimes makes me wonder how much substance is really there to engage."
ReplyDeleteYes, I can see and appreciate that point, but also that of the Austrians who insist that your explanation is not as good as *their* explanation. The annoying thing is if it's crazy or at least over-confident internet Austrians who will bluntly and without hesitation tell serious and learned professional economists how they're all wrong and don't know nothing. And again, there *is* a strong tendency toward this kind of attitude within Austrianism.
(As well as a strong tendency among crazy or over-confident internet mainstreamers to dismiss all seemingly non-mainstream ideas)
Thanks for the string of thoughts. I disagree with a lot of what you've got here obviously, but don't feel like it's worth going through and enumerating where I think you're wrong (you probably already know!). But I do want to let you know I appreciate the extended response.
ReplyDeleteGood, thanks.
DeleteKrugman ..it’s interesting that they can neither explain why they were wrong nor admit that this poses a problem
ReplyDeleteI view Austrians like Elliot Wave theorists, descriptive and narrative, but only in retrospect, not being predictive or prescient. Austrian ideas are moralistic, simple, and appealing to the common man generalizing as it does from households and believed by ordinary business. There is less substance there than proclaimed. I tend to follow Ritholtz in ruthlessly eliminating sources of confusion and error; you aren't trying to make money but you are trying to understand your own reasoning. When it doesn't assist in that, it is probably best to let it go.