A Lesson in Going too Far

In a short comment on George Selgin’s recent contribution to the Cato Unbound debate on the use of theory and data in Austrian economics, Danny Sanchez writes,

But Selgin, who actually understands Mises’ writings enough (and is honest with himself enough) to not call himself an “Austrian…”

Maybe there’s unstated context behind that statement, although it directly follows a paragraph where Danny subtly criticizes Steven Horwitz’ ascribing of strict a priorism to a caste of ‘internet Austrians’ — so please, fill me in. But, apparently, in order to be a ‘true’ Austrian you must strictly adhere to the Misesian doctrine of strict theoretical a priorism, as if L.v. Mises were the ‘end all, be all’ of the Austrian school. Danny even goes as far as accusing those who still call themselves Austrian, yet stray away from praxeology, of intellectual dishonesty.

Give me a break.

27 thoughts on “A Lesson in Going too Far

  1. Danny Sanchez

    You’re right about the “honesty” bit. I did go too far with that. I’ve taken it out. Thanks for calling me on it. But I stand by my broader point.

  2. Isaac Izzy Marmolejo

    Jon, you better start deducing and start listing out your apriori proofs or else you aren’t Austrian!

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  4. Dan(DD5)

    You’re not going to get a break because that precisely the point of praxeology. You get no break!! Horwitz apparently thinks he gets a few here and there.

    I don’t think Danny went too far. I think that Steve Horwitz has been playing it on both sides for far too long and it’s about time somebody call him out on it. Steve has time after time refused to admit that he is not a praxeologist. Read his books! there is nothing there about how praxeology is not enough all the time, or how empiricism is OK sometimes , etc… See also any of his lectures at FEE. However, it is obvious that he strays away as soon as he starts to argue for MET and “free banking”. When he has been called on it in the past, he has refused to acknowledge it. Now suddenly he comes out of the closet writing about how it’s OK to stray away and still be an Austrian. So what the heck is an Austrian? Apparently nothing anymore.

    There is no such thing as a partial praxeologist. That’s like saying – well I adhere to logic only when it suits my needs, otherwise,..I stray away! Then I discover I can advance theories that I couldn’t before. Wow!! what a neat trick!

    If Steve still wants to call himself an Austrian and a Misesian (as he often does), he has a right to do so. Nobody owns the term. He can just define Austrian however he likes. But what if Krugman tomorrow defines himself as an Austrian? What will be the objection based on then?

    1. Dan(DD5)

      One more point. The “dishonesty” comes into play when he keeps ascribing to Mises rather absurd views. he has a strong record of this. Selgin on the other hand, does not. Now, it’s true that “dishonesty” may be going to far. We don’t really know what motivates him. He could really believe Mises was not a strict praxeologist. I just think it’s too bad he runs a seminar every year on “Austrian Economics” with Mises’ bust visible in the background all the time.

    2. JCatalan

      I would be more sympathetic had Danny gone down the route of criticizing Horwitz for misrepresenting Mises, which he did in his first post. But, that’s not what Danny did in this second one. Here, he is explicitly arguing that an Austrian is a praxeologist, and if you aren’t a strict praxeologist then you’re not an Austrian.

      So what the heck is an Austrian? Apparently nothing anymore.

      It’s a good question (and one difficult to answer), but I don’t think the defining quality is whether you adhere to praxeology. By these standards, it would be difficult to include Hayek and Lachmann into the school.

      1. Ryan Long

        Rothbard certainly didn’t include Lachmann, as per the forward in Man, Economy, and State. I see this whole issue as a Rothbardian problem. Somewhere along the lines, Mises and Rothbard got lumped together as though their ideas are the same. They’re not.

        1. JCatalan

          The major concern is that the tendency to strictly define what is ‘true’ impedes progress, because it chastises anything that steps outside self-imposed boundaries.

        2. Dan(DD5)

          It’s quite funny how in practically every Austrian debate not matter what the issue is, it’s always just a matter of a short time, usually no more then a handful of back and fourth exchanges, before someone blames Rothbard.

          Now, it’s Rothbard’s fault for us thinking Mises was a praxeologist. This is a new one.

          1. Ryan Long

            Sorry – either I wasn’t clear or you misunderstood me. I’m blaming Rothbard for being crazily dogmatic. If “it’s always a matter of a short time… before someone blames Rothbard,” then that is a good indication that there is something about Rothbard’s ideas that attract criticism. Where there’s smoke, there’s fire.

  5. Ryan Long

    Serious question here.

    Mises differentiated between “praxeology,” “economic history,” and “accounting,” and yet he covered all of these things in Human Action, and practiced each one of them separately. I’m okay with how Sanchez chooses to define praxeology, but why does he ignore the other two aspects of Misesian economics? Are practitioners of “accounting” in the Misesian sense no longer “Austrians?” Are Rothbard’s history books outside of the Austrian School? How far are we supposed to take this idea? Is teleology the one and only way to be a practicing economist?

    1. JCatalan

      Honestly, if you read some of the excerpts in Selgin’s piece for Cato Unbound, it seems me that Mises was just sloppy at times. I don’t see how his objections are incompatible with a better reading of Mises.

      1. Ryan Long

        I guess when I read Mises, I’m not looking for a perfect, closed loop. I don’t see praxeology as being a self-contained, systematic way of viewing the universe. Rothbard seems to have taken things in that direction. I’m certain that Mises, writing in a second language, often misspoke; but who among us has never misspoken from time to time? Therefore, I don’t see it as sloppiness so much as the inherent imperfections of written language.

        That’s why I commented on the original Sanchez post that it would be nice to see someone write about this from the perspective of whole chapters of Mises works, rather than isolated quotes. The reason HA is >1000 pages long is because it takes a lot of words to say what needs to be said. A paragraph here and there isn’t going to do it.

        But that’s true of any economist. The problem with “Austrians” is that they too often try to make every new statement fully consistent with every previous word written by Mises and Rothbard. It becomes quasi-religious after a while. You can say, “I agree with Mises when he says _________,” but to refuse to consider anything other than ___________ is needlessly dogmatic and frankly bad economics.

        1. Dan(DD5)

          It would be perfectly fine for Steve Horwitz to say: I don’t agree with Mises on the whole praxeology thing. Like a Milton Friedman who rejects praxeology but agrees on many of the same conclusions. But Steve doesn’t do that. Instead, he insists that one can simply interpret Mises differently. This is the problem.

          1. JCatalan

            That may be a problem, but not the problem that Danny raises in his post. He didn’t say “Horwitz isn’t a praxeologist.” He suggests that non-praxeologists should stop calling themselves Austrian. Your argument is sensible, but isn’t the one we’re discussing.

          2. Dan(DD5)

            Well I think Danny has basically assumed that there is a broad agreement out there that Austrian economics is basically that one branch of the science that Mises refers to as praxeology. I think it is a sensible assumption given that there is no other way to precisely define it so that what or who is Austrian and who is not can be objectively established in a non arbitrary manner. Obviously, Danny doesn’t own the term and anybody can adopt it.

            But here is the question for you. What use do terms have in scientific discourse if we cannot ascribe to them precise definitions? What objection would you have to labeling Roubini or Krugman as Austrian? If that’s too extreme, then how about ancap David Friedman? If he labeled himself as Austrian tomorrow, and Danny objected, would you say: give me a break?

          3. JCatalan

            I would say price theory, but even here adherence to a specifically Austrian price theory is fuzzy (although I think most Austrians at least follow the ‘macro’ price theory of profit and loss). So, right now, categorization into the ‘Austrian school’ has flexible boundaries. I’d say a general ‘adherence’ to topics like: Böhm-Bawerk’s price theory, capital theory, Austrian business cycle theory, et cetera.

          4. Dan(DD5)

            Why price theory as oppose to capital theory? Point a gun to my head and i choose the latter. But you’ve sort of touched upon the point I was trying to make. Praxeology has no boundaries and isn’t fuzzy. Anybody can label himself an “Austrian” and you and I won’t be able to argue against it. Not so with Praxeology. You can define precisely who is or is not a praxeologist. Since the term Austrian economics begin to be widely in use only after Mises, I think it is a (or at least was up until recently) a sensible assumption to equate Austrian economics with Praxeology.

          5. JCatalan

            It would only make sense if you think that praxeology is the defining feature of an Austrian. I don’t. Hayek wasn’t a praxeologist, but he made contributions which I think are uniquely Austrian. The same goes for a large number of economists who formed part of the ‘Austrian revival’ of the 1970s: Mario Rizzo, Gerald O’Driscoll, George Selgin*, Lawrence White, Ludwig Lachmann, Peter Boettke, et cetera. And, mind you, praxeology isn’t just ‘logical deduction,’ because my that logic then most economists are praxeologists. Praxeology claims something more specific: that theory can’t be (dis)proved by the data, that there are immutable laws of economics (something Hayek may not have advocated, according to Greg Ransom),that we can derive these laws from a single axiom, et cetera.

            Also, I say price theory, because, really, here we find the origins of capital theory and business cycle theory. This is actually a point that Rothbard stressed, and Salerno brings up in his introduction to Rothbard’s memo on Kirzner’s Market Theory and the Price System. For example, price imputation should lead to some concept of a multi-stage period of production.

            * I would agree that Selgin may no longer form part of the Austrian school, because his contributions aren’t necessarily ‘uniquely’ Austrian. His work is centered mostly on banking theory, which doesn’t rely on anything that only Austrians have tended to advocate (whether price or capital theory).

          6. Ryan Long

            Dan, what would you call a person who adhered to the ideas of Schumpeter and Hayek moreso than the ideas of Mises and Rothbard?

          7. Dan(DD5)

            This is precisely why I often refer to “Misesian economics” or (Austrian/Misesian) as oppose to just Austrian economics, especially during discussions with other proclaimed Austrians. By the way, most of Hayek’s greatest contributions to the field is was by Hayek the praxeologist.

    2. Danny Sanchez

      Your confusion stems from thinking that economics (economic theory) was the only topic covered in Human Action. Rothbard’s economic history books are examples of applied Austrian theory.

      1. Ryan Long

        My confusion, Danny? The comment you just replied to was my statement that Mises covered two other economic disciplines in depth: economic history and accounting.

  6. Silvano

    It seems to me this kind of discussions are affected
    by a “translational lag”.

    The father founder of the Austrian Economics is Carl
    Menger, which had been translated only very late in English. Ha had been
    translated later than his contemporaries Boem-Bowerk and Von Wieser (who is rarely
    mentioned despite his role in the history of thought). It’s also worth to
    notice that they never qualified themselves as “Austrian Economists”: the
    definition dates back to the Methodenstreit. Basically the economists of the
    German Historical School started to qualify in such way Menger and the
    subjectivist professors teaching in Wien.

    But let’s go back to the “translation lag”: while “Human
    Action” is considered Mises opus magnum , in reality it played a limited role
    in the history of economic thought compared also to earlier Mises’ works: Theorie des Geldes und der Umlaufsmittel
    (1912), Die Wirtschaftsrechnung im
    sozialistischen Gemeinwesen (1920), Geldwertstabilisierung und
    Konjunturpolitik (1928). Up to 30ies the German Monetary theory could be
    split in two parts: Mises / Hayek and Schumpeter / Hahn. Only in the last part
    of his career Mises address directly (and in English) epistemology and probably
    Theory and History (1957) is the book where he develops better his arguments. So
    the history of Austrian School of Economics in United States starts almost from
    the end with a particular focus on the later works where Mises try to assert
    his “third way” between historicism and positivism. It’s not so far from truth
    that many translations reached the American public when the debate was over or mainstream
    already changed direction. One of the best example is given probably by Theorie
    des Geldes und der Umlaufsmitte: this (and not HA) is the book most quoted
    outside the “Austrian Group”, debated in the early part of XX century in
    Continental Europed and reviewed by Wicksell and Hahn. Without mentioning “Investigations
    into the Method of the Social Sciences: with special reference to economics”:
    written by Carl Menger in 1883 it is at the root of methodological dualism of
    every Austrian Economist and it had been translated I think in 1985.

    conclusion: I think Austrians share subjectivism and methodological dualism but
    not in a monolithic way. Praxeology, as defined in HA is more misesian than
    Austrian (and there is nothing wrong in it!). The literally adherence to apriorism
    as the only way to get the truth owes probably more to Rothbard than anyone
    else. In a certain sense it’s more an “American affaire” than a truly Austrian


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