Sunday, March 27, 2011

Misesian Economics: The Search for First Principles

Readers familiar with the Keynesian literature will notice that I have borrowed this title from one of Allan Coddington's famous papers that demarcated the different interpretations of Keynes into separate and distinct schools. The literature since Coddington has followed this classificatory scheme, and I will attempt to do the same with the literature that has emerged from Mises' work. Here is how I see Misesian economics.
1.) Fundamentalist Misesianism: For the fundamentalists, what is central to Misesian economics is Mises' unique methodology. Indeed, most fundamentalists concentrate almost exclusively on this aspect of Mises' work. For example, their interpretation of Mises' more applied work, e.g., business cycles and interventionism, is typically done through the lense of Mises' praxeological framework. Four books stand above the rest for the fundamentalists: Human Action, Epistemological Problems of Economics, Theory and History, and The Ultimate Foundation of Economic Science --- and for Human Action it is the first 150 pages only. Theorists and scholars in this school include Richard Ebeling, David Gordon, Jorg Guido Hulsmann, and Percy and Bettina Greaves. These scholars emphasize the a priori character of all propositions, and debase empiricism in favor of logic. Their audience is select and few.

2.) Libertarian Misesianism: During Mises' stay in New York, there gathered around him a small group of scholars associated with what would later become the libertarian movement. This was an American phenomenon that surrounded the works of people like Isabel Paterson, Albert Jay Nock, John T. Flynn, Rose Wilder Lane, Henry Hazlitt, Frank Chodorov, and Leonard Reed. The man most responsible for bringing this movement into Mises' orbit was Murray N. Rothbard. It was Murray Rothbard that gave libertarians the impression that Austrian economics was their mainstay. This movement culminated with the founding of the Mises Institute in Auburn Alabama, and has continued to gather young scholars who identify as libertarians first, and Misesians second. This movement has also come to supplant and absorb the other schools of Misesian economics, making it by far the most influential within Austrian economics.

3.) Organic Misesianism: This school borrows from the work of Hayek in their interpretation of Mises, and for this reason they have frequently come under heavy fire by the other schools for failing to limit their understanding of Mises to his work alone. This movement was begun by Israel Kirzner and, later, Don Lavoie. This school was further refined and developed through the contributions of important scholars like Pete Boettke, David Prychitko, Steven Horwitz, Mario Rizzo, and others associated with George Mason University and New York University. This school has enjoyed the greatest success outside of Austrian economics, making them the principal expositors of Misesian economics to others in the economics profession.

My own interpretation of Mises is different. I have a long-term project planned for a complete re-appraisal of of Mises' contributions to economics, and I hope someday to write a paper elucidating these differences I have identified in this post.

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