Man has only one tool to fight error: reason.
— Ludwig von Mises
1. Renaud Fillieule, “A Comprehensive Graphical Exposition of the Macroeconomic Theory of Böhm-Bawerk.” I still have not read the paper; my intention is to post on it, even if it’s only a summary, when I do. Fillieule’s objective is to formalize and illustrate how Böhm-Bawerk’s theory of interest and capital offers a complete macroeconomic theory. If capital theory is your thing, this is the paper for you.
2. Peter J. Boettke and Kyle W. O’Donnell, “The Failed Appropriation of F.A. Hayek by Formalist Economics.” Boettke announced this working paper yesterday on his blog, and I spent much of the afternoon reading it. It’s very interesting and very informative. I do have a post in the works summarizing it — to the best of my abilities —, but also challenging one of the arguments in the paper: that it is the fault of formalism that some of the Austrian emphases in the problem of social coordination and knowledge are lost to non-Austrian scholars.
3. Having just bought a new car, and not being very well off, I’ve held back from purchasing books. Besides, I already have a lot of books, many of which I have yet to read. Nevertheless, I decided to splurge and buy Fred Foldvary’s Public Goods and Private Communities. I am very interested in the public goods problem, to a large extent because it serves as a segue into alternative institutional (i.e. non-pricing process) frameworks. My views on government are informed by my understanding of the public goods problem (and, more generally, the market failure problem). Foldvary, in a technical analysis, argues against the market failure interpretation, suggesting that entrepreneurs will find creative ways of providing these goods at a local level.
4. Somebody made a website dedicated to clarifying that the Nobel Memorial Prize in Economics is not really a Nobel Prize. The thing is, though, that nobody cares. My guess is that even the committee that awards the actual Nobel Prize don’t care either, because they still list the economics prize on their website. It’s time to get over it, and it’s time to get over the fact that sometimes the award will go to people who you think shouldn’t get the award. And, yes, I think it’s fair to believe that receiving a Nobel Memorial Prize in Economics just as prestigious to an economist as winning the Nobel Prize in Chemistry is to a chemist.
5. Gene Callahan on the intellectual relationship between Hayek and Mises. Note that in his early work on the knowledge problem, Hayek raises doubt over the ability of the “pure logic of choice” (praxeology) to explain what he sees as an empirical problem. But, Bruce Caldwell, in his intellectual biography of Hayek, suggests that this theoretical/empirical divide would continue to present a problem for Hayek. Hayek, in his later work, went on to argue that falsification for the macro problems he had in mind — problems of coordination and social order — is increasingly difficult, which seems to contradict his earlier statements (and seems to support a preference for micro-founded macro theory, which are extensions of the pure logic of choice).