by Stefan Kolev*
For a better understanding of the turbulences of our time, studying those earlier politico-economic debates which focused on fragile orders of economy and society can certainly prove insightful. In The Viennese Students of Civilization, Erwin Dekker addresses such an age and interprets the works and impact of economists often labeled as the “Austrian School” – economists who are both the research object for historians of economics and the source of inspiration for today’s “Austrian Economists”.
Dekker’s endeavor is an ambitious one. First, the literature on these economists has grown immensely over the last four decades, so some readers may believe that everything essential has been said already. Second, this 150 years-long tradition poses numerous serious challenges for historiography. Facing these adversities, the innovative and often provocative approach of the book is all the more refreshing and energizing.
Already the title, The Viennese Students of Civilization, provokes – it is rather unusual to entrust economists with the study of their civilization. Dekker, an assistant professor of cultural economics at Erasmus University Rotterdam, focuses on the concepts of civilization and culture, explicitly ignoring the often vague historical distinctions between them. The justification for this focus is convincing: He depicts markets as genuinely cultural phenomena – they are shaped by culture, but also influence culture themselves. Dekker locates the term “cultural” between “naturally given” and “deliberately designed” and describes with it results of human coexistence. The book sheds light primarily on the last decades of Austria-Hungary and on the interwar period – periods of multiple tensions, and precisely these tensions serve as the background for portraying the attitude of the Viennese economists to the decline of Central Europe and the embattled Western civilization.
Dekker does not stop with presenting the economists’ internal debates at their diverse conversation forums inside and outside the University of Vienna. Moreover, he shows how deeply embedded the economists were in the various Viennese circles, how much their research benefited from this network of overlapping conversation circles, and how the economists often saw their publications merely as a by-product of the conversations. This setting lets the intellectual uniqueness of fin de siècle and interwar Vienna stand out impressively: The economists were not only in a continuous conversation with historians and jurists, but also with philosophers, psychologists, mathematicians and physicians – and owing to Viennese café culture also with journalists, writers, politicians and government officials. Anyone who constitutes a knot in such a network is compelled to develop a broad access to one’s research object, the market.
The openness in the selection of the analyzed group is also an asset of the book. In doing so, Dekker circumvents the sterile, sometimes sectarian-like debates as to who belongs to the Austrian School. These debates often end with the unsatisfactory result that only a group aligned to Ludwig von Mises remains. Dekker, in contrast, assigns in his narrative a high priority also to Joseph Schumpeter’s positions, an author often discarded as “un-Austrian”. Friedrich August von Hayek is another focal point, and it is his attitude towards the Western civilization which reveals particularly vividly how the self-perception of the Viennese changed over time.
What should economists do? During the evolution of economic thought, very different responses have been formulated to this question, accompanied by metaphors such as the engineer, the physician, or the plumber. The responses of the Viennese also diverged. The central tension identified by Dekker is the one between the economist as a passive student of market processes and their cultural implications, and the economist as an active defender of the Western civilization’s preservation. A wave-like pattern is discernible over time: Early in the 19th century, especially in the works of Friedrich von Wieser, cautious optimism and deep pessimism alternated each other, and pessimism led to deep resignation and depression in the Schumpeter-Mises generation during the 1940s. It was precisely at this time, however, that a key shift took place in the generation of Hayek and Karl Popper: Several scholars of this generation opted for actively defending the Western civilization which had been pushed to the brink of collapse by various totalitarianisms. The tools were books such as “The Road to Serfdom” and “The Open Society and Its Enemies”, as well as the founding of forums such as the Mont Pèlerin Society – in Dekker’s view, establishing the latter also expressed the desire to revitalize the Viennese culture of conversation.
Civilization is tiresome. It imposes burdensome restraints on our instincts and passions. And it is astonishing how ubiquitous this contemporaneous diagnosis was: in the Vienna of psychoanalysis, in the understanding of the interest rate as a restraint of impatience, or in the debates about the burden of individual responsibility. The current turmoil on both sides of the Atlantic shows that today yet again many citizens experience markets, their openness and the necessity to follow their rules as an excessive burden. If you are concerned about this new fragility of the international order and read Dekker’s captivating essay in the history of economics, you cannot help thinking about the self-perception of today’s economists. Are we perhaps also responsible for the current fragility of Western democracies? Do we spend too much time and effort on the passive task of understanding the market – and thus often forget to patiently explain the meaning and importance of the market for a free society?
An earlier version of the review was published in German in the Economics section of Frankfurter Allgemeine Zeitung on March 20, 2017.
Erwin Dekker: The Viennese Students of Civilization. The Meaning and Context of Austrian Economics Reconsidered. Cambridge University Press, New York 2016, 220 pages, 110$.
*Stefan Kolev is a Professor of Political Economy at the University of Applied Sciences Zwickau and Deputy Director of the Wilhelm Röpke Institute in Erfurt. During his stay as a Research Fellow at the Center for the History of Political Economy at Duke University, he presented at the Colloquium in October 2016.