The Viennese culture of conversation: Understanding and defending fragile orders

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”.

Thomas Mayer: “I am an Austrian in Economics”

by Andreas Hoffmann

In today’s publication Thomas Mayer writes that he is “an Austrian in economics.” Mayer is the chief economist of Deutsche Bank Group and head of Deutsche Bank Research. Mayer argues that Austrian theory fits recent events well.  He suggests that

“Failure of the liquidationists to overcome the Great Depression of the early 1930s prepared the ground for an era of interventionist economic policies. Modern macroeconomics and finance nourished the belief that we can successfully plan for the future. But the present crisis teaches us that we live in a world of Knightian uncertainty, where the ―unknown unknowns dominate and our plans for the future are regularly thwarted by unforeseen and unforeseeable events.

A (Social) Capital Idea!

by Sandy Ikeda

Over at The Austrian Economists Dave Prychitko writes:

I still have trouble with the concept of Social Capital. I know what it means. Peter Berger encouraged us to read and discuss Granovetter fifteen years ago, and we did. Enjoyed it, and thought it was a great breakthrough in understanding networks, tacit knowledge, expectations, coordination. But I don’t see why we Austrians should call it social “capital.” If those outside the school want to do so, fine. But should Austrians? I seem to be the only one who criticizes the social capital concept. Why do I hesitate? See, for example, Kirzner’s (or Lachmann’s) book. I know what they mean by the word capital. I know how it fits into higher-order goods, and so on. I’d like to see how “social capital” is “capital” in the Austrian sense of the term. Not by analogy, but by direct theory. How does it fit into our higher-order goods concept? How does it directly relate to interest and time preference? And so on.

I won’t try to address all of Dave’s concerns here, only the part about the appropriateness of the term and the Lachmann connection.