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”. Continue reading

How to Teach the History of Economic Thought

by Gene Callahan

I was recently asked about a good textbook to use in teaching the history of economic thought. Well, last year I had used William Barber’s book, and found it wholly adequate. But as I was teaching the course, I became somewhat uneasy about the textbook approach. I started to feel I was giving what Michael Oakeshott referred to as a “museum tour” of that history: “Over there, on your left, is Aristotle… he held exchange should take place when values exchanged are equal. There, on the right, is Adam Smith. Do you see the extensive division of labor in his diorama? Just past him is David Ricardo…” Continue reading

David Hume and Friedrich Hayek: Classical Liberal Giants

by Mario Rizzo

I have just discovered the wonderful coincidence that May 7th is David Hume’s birthday and May 8th, as I have known, is Friedrich Hayek’s birthday. It is Hume’s 300th birthday – how amazing that he is still so relevant in a myriad of ways. It is Hayek’s 112th birthday.

As most of our readers will know, Hayek thought that David Hume’s political philosophy was one of the most important intellectual developments in the classical liberal heritage. David Hume was also a source of inspiration for the work of James Buchanan and his schools of public choice economics and constitutional political economy. Continue reading

Happy Birthday, Carl Menger

Carl Menger, the birthday boy.

by Mario Rizzo 

Today is the birthday of Carl Menger, born February 23, 1840. Menger was, of course, the founder of the Austrian School of Economics. His Principles of Economics, a great achievement for its time, is still well worth reading. It conveys like no other book at the time (and unlike most basic texts today) the importance of mind, knowledge, ignorance, causal relationships between goods and wants, and of course marginal utility. I think we can still learn from Menger’s book today, especially about the importance of knowledge in economic development. Austrians should be pleased to have such a great mind as the founder of their school.    Continue reading

Broadening Economics Education

by Mario Rizzo  

Policy Ideas in the History of Economic Thought

It is no exaggeration to say that if a bright undergraduate wants to get into a top Ph.D. program he needs to take a good deal of mathematics. Many advisors will recommend a minor in mathematics or even a double major in mathematics and economics.  

As a result of all this, many of the best undergraduate economics students are mechanical problem solvers. They are in a kind of self-referential bubble, but to a much lesser degree, of course, than are top-department Ph.D. students. They expend tremendous amounts of energy with very little payoff in understanding how real economies work. 

However, things would not be so bad if students also took courses that emphasized the broader, historical, institutional, and, dare I say, philosophical aspects of economics. But the intellectual opportunity cost is wrongly perceived as being too high. (Perhaps the career opportunity cost is high, but that is a separate question.)  

Absorbing a broader perspective would encourage tolerance for a variety of methods and a greater appreciation for the complexities of economic policy. It would also increase respect for economists of a previous age who knew so much.  

So enter my course, “Policy Ideas in the History of Economic Thought.”  (See link above.) Continue reading

Has Anyone Ever Tried to Formalize Austrian Economics?

by Gene Callahan

I’ve been asked that question several times (often via e-mail from some reader of an online article of mine.) Well, Monday, at our colloquium, we discussed a paper presented by the Italian economist Giandomenica Becchio on the economic (and ethical) work of Karl Menger, the son of the founding Austrian economist Carl Menger. She had several remarks in her paper that caught my fancy. She noted that Karl, in his advocacy of mathematical economics, saw himself as forwarding his father’s program of seeking “exact economic laws.” She quoted Oskar Morgenstern saying that “the axiomatic method must be applied to economics with no regard to the realism of hypotheses” — which struck me as a modified version of Mises’s “a priorism.’ Continue reading