3rd and final in a series of posts on Janek Wasserman’s The Marginal Revolutionaries. Read the previous two posts here and here.
The weakest part of the book comes in the final two chapters where he addresses the revival of Austrian economics since the mid-1970s. In particular, he dramatically underplays the importance of Israel Kirzner for the Austrian economics of the 21st century, both in the substance of his thought and as a role model for scholarly activity. One reason for this neglect is that Kirzner, and the later “Kirznerians,” create a complication for his narrative. Wasserman wants to argue that Austrian economics was always in service of the powerful and that therefore ideology eventually would triumph over serious scholarship, making it unsurprising that the Rothbardians would play footsie with the alt-right. Kirzner doesn’t fit that story. Not only did he, and most of those who followed up on his work, remain committed liberals, Kirzner was the very model of scholarly engagement and that branch of the modern Austrian school has continued to follow that path.
I write about these issues with some trepidation as I have not only lived through the events Wasserman describes, I have committed my career to the Kirzner side of this divide and am cited for that view in the book. So readers should take my own biases into account in what follows.
Wasserman is correct to identify the two wings of modern Austrian economics as being between a broadly Kirznerian wing associated with George Mason University and a Rothbardian wing associated with the Ludwig von Mises Institute. The problem with his presentation is that he fails to distinguish the important differences between how Kirzner and Rothbard, and their followers, approached the relationship between scholarship and ideology, and how they interacted with the scientific community of economists. The differences between these two wings is largely portrayed as a clash between what one might call “liberal libertarians” and “paleo-libertarians.” Much of the chapter on these differences relies on debates that took place in the blogs and other informal sources.
What Wasserman does not do is to discuss the ways in which the two wings have interacted with the larger economics discipline. Wasserman held up early 20th century Vienna as a model to be emulated in the ways that Austrians were in the middle of important conversations in the social sciences. Through his career, and especially starting with Competition and Entrepreneurship, Kirzner attempted to engage the questions that the mainstream of the discipline thought were important. Although his contributions to professional journals were limited, his students and their students in the GMU wing have published widely in professional journals. They have incorporated ideas from related areas in economics, such as public choice, and the Bloomington school of political science associated with Elinor and Vincent Ostrom, to create an interdisciplinary approach to political economy. Members of that wing have also published books with major university presses and have taken on leadership roles in professional organizations beyond the ones directly associated with Austrian economics. The dozen or so panels of the Society for the Development of Austrian Economics (also never mentioned in his account) continue to be the most well-attended at the Southern Economic Association meetings.
The emphasis on scholarly contributions on the part of the Kirznerian wing is substantially due to Kirzner’s influence not necessarily as a direct mentor, but as a role model of scholarly engagement. , Their focus steers clear of narrow policy advocacy or equating Austrian economics with libertarian ideology; it is not the Kirznerians who refer to themselves as “Austro-libertarians.” In a more complete account of where Austrian economics is today, Kirzner would have been featured much more prominently. In addition to serving as a role model, the substance of his contributions has been fundamental for the path that the GMU-related wing has taken, even where there have been plenty of disagreements with the details. Giving Kirzner his due in this way would also have enabled Wasserman to more accurately frame the current divisions among Austrians as being less about libertarianism or even the specifics of Austrian economics, but instead about the relative roles of scholarship and politics and the resulting relationship between Austrians and the rest of the economics profession. The Kirznerians have done more to recapture the intellectual spirit of Vienna than Wasserman gives them credit for, and he thereby overlooks the ways in which that spirit has been productive in giving Austrian economics a seat at the table in economics in ways that they haven’t had since the interwar years.
Unfortunately for Wasserman, acknowledging that reality poses a major problem for his overarching narrative. If the majority of 21st century Austrian school economists are engaging with the profession, contributing to its top presses and journals, and being elected to leadership roles, all while sustaining a commitment to scholarship over ideology, it undermines his claim that there is something about the Austrian school that inherently led it to give up its scholarly roots and find alliances with the worst sort of defenders of privilege and power. As a claim about modern Austrian economics it’s just not true. There was a far more interesting concluding chapter that Wasserman could have written that explored what I think are the real differences between the Kirznerians and Rothbardians, but he chose the one that looks more like a prizefight.
Despite its flaws, Wasserman’s book is well worth reading for those interested in the Austrian school or the history of economics more generally. Future work on the history of Austrian economics will not only have to tangle with Wasserman’s book, it will be better for having done so.
READER COMMENTS
Alexandre Padilla
Aug 19 2020 at 5:11pm
Steve,
I am not sure Kirzner’s contribution to journal articles is as limited as one may think. He did engage quite a bit with Becker among others. But it’s also important that when Kirzner wrote, books were far more valued by the profession than journal articles.
Overall, of course, I do agree with your point. Kirzner is less attractive than Rothbard when you want to criticize some Austrians for peddling with unsavory (and let’s be honest, repugnant) ideologies. Kirzner is a scholar, Mises’s student, who had pretty much zero interest in engaging in ideological, political battles. For Kirzner (as for Mises), Austrian Economics was value free and we ought to avoid using our economist hat to defend specific ideologies or public policies. I may be wrong since you know Kirzner more than I do.
Steve Horwitz
Aug 20 2020 at 7:46am
Yeah, he had that exchange with Becker, but there really isn’t much else, and certainly not in the major journals. I think, btw, this is why he’ll never get a Nobel Prize. He is not perceived as someone who contributed to the scientific conversation in the places where most economists consider that conversation to be taking place.
You’re right that economics was more of a book culture back then, but it was still primarily a journal culture. After all, many of Hayek’s classic essays, like the ones in Individualism and Economic Order originally appeared in the journals. It matters a lot that TUOKIS appeared in the AER, for example.
Ryan Swanson
Aug 19 2020 at 5:42pm
Does Wasserman deal with the idea that the Austrian focus on entrepreneurial discovery is inseparable from the process of constantly upsetting incumbent industries, people, and all the old ways of coordinating production? Doesn’t that alone cast serious doubt on the idea that Austrian Economics was developed as a tool to serve those powerful incumbents?
Steven Horwitz
Aug 20 2020 at 7:43am
Great point Ryan. He really doesn’t. Although he does have a discussion of Schumpeter and creative destruction, he really doesn’t tie that point to the difference you are asking about. And certainly not in the context of Kirzner.
I think Wasserman’s implicit framework is an example of the idea that capitalism is whatever is in the interest of capital. So these differences between being “pro-business” and “pro-market” aren’t the relevant ones to him.
Steve Horwitz
Aug 20 2020 at 7:48am
Great point Ryan. And Wasserman does talk about that idea in the context of Schumpeter and creative destruction, but not in his discussion of Kirzner.
I think Wasserman’s intellectual framework is a great example of people who think that capitalism is whatever is in the interest of capital. The distinction between “pro-business” and “pro-market” isn’t relevant to them. So you end up not being able to see the point you’re making.
David
Sep 7 2020 at 1:43pm
“Through his career, and especially starting with Competition and Entrepreneurship, Kirzner attempted to engage the questions that the mainstream of the discipline thought were important. ” Can it be that Professor Kirzner only attempted to engage certain questions without actually engaging them?
Herb K
Sep 7 2020 at 5:55pm
I am a retired engineer & have become interested in the various economic theories. This review was interesting, as I have been reading various works by Friedman, Sowell, Williams, von Mises, Kirzner, Hayek, and starting Rothbard. I found Friedman, Sowell, and Williams clarifying reads (especially, Friedman’s 1980 series), von Mises the most compelling, Kirzner ties ideas together, Hayek’s syntax more difficult (as he notes in an old interview), and Rothbard (and the von Mises Institute) more radical. As noted in the review, I do not find these authors to be, on the whole, on the side of the “rich”, to the detriment of the “poor”. Lavoie’s history was very helpful, and positive on Austrian ideas. Wasserman’s book might be an interesting counterpoint. Thanks for the food for thought.
Comments are closed.