Monday, January 21, 2008

So why isn't the Austrian School of economics retarded again???   posted by Razib @ 1/21/2008 01:22:00 AM

Since we've been talking about anthropology, I am posting this mostly to satisfy my curiosity and get something off my chest. There was a time in the past when I was a hard-core libertarian. I was at a book store recently and flipped through Radicals for Capitalism, Brian Doherty's intellectual history of the libertarian movement. I already knew most of the key players from my past readings. Now, I'm not one of the few dozen people in the world who has actually read Ludwig von Mises' Human Action (I'd be willing to bet some gold that half of these individuals who've gotten through von Mises' magnum opus are virgins!), so my libertarian nerdishness only went so far. All that being said, there was a time I would have said I favored the Austrian School of economics. This was during a period when I was busy boning up on the Krebs cycle, I wouldn't have had any clue what an indifference curve was. I was a libertarian, and the Austrian School was congenial to libertarianism, ergo, I supported the Austrian School (I knew I opposed Keynesians as well as the neoclassical models).

But I'd always had issues because I knew that the Austrian school rejected econometrics and positivism; and being steeped in experimental science I'd always viewed positivism as a Good Thing. Eventually I read Bryan Caplan's Why I am Not an Austrian Economist, the definitive smackdown of the school of thought derived from von Mises (an aside: the aspersions cast in this post are aimed primarily at the Misesian tradition, not the Hayekian; the reason for the distinction is made clear in Caplan's piece). I'd already lost my interest in libertarianism by the time I'd stumbled upon this polemic, but it confirmed my growing suspicions that Austrian economics had turned into a cult of personality. Caplan, being an economist, has some pointed technical criticisms. But over the past few years, and especially over the past months, I've been doing some reading on Google Books and elsewhere on the intellectual history of the Austrian School, and especially praxeology. What the hell is praxeology? Well, from
Praxeology is the study of those aspects of human action that can be grasped a priori; in other words, it is concerned with the conceptual analysis and logical implications of preference, choice, means-end schemes, and so forth.

The "grasped a priori" part has really bothered me. I mean, I read psychology and history, I can't derive it a priori. Recently I was going over some issues in modern Middle Eastern history, and learned that King Hussein of Jordan had apparently asked Israel for permission to send a brigade to Syria to invade the Jewish state during the 1973 Yom Kippur War. Honestly, I really don't know if I could ever grasp Arab psychology a priori. The more and more I read about psychology the more I think that anyone who believes that they could develop an axiomatic system of human action from insights they grasped a priori is totally retarded (mad props to Aristotle though, he worked before the cognitive revolution). More specifically I have to wonder if they are socially retarded. I have suggested that an attraction to libertarianism is in part a function of your personality. Normal people rarely become libertarians, rather, it's a ideology driven by young non-alpha males with Roark/Galt fantasies. There are many more Justin Raimondo & Eric Garris types than Mark Cubans in hard-core libertarianism. Any survey of the biographies of von Mises or Murray Rothbard emphasizes their stubborn heterodox tendencies; but at this point I just wonder if they were social retards to whom their a priori logic was plausible because they really weren't as complicated as most humans, who engage in habitual and casual hypocrisy and contradiction. I recall reading Rothbard once explaining how one might buy and sell children in "flourishing child markets" in an anarcho-capitalist order. Even then I remember thinking, "Dude is weird...."

Now, why am I posting this? Many readers of this weblog are sympathetic to the Austrian School of economics (e.g., Mencius Moldbug). On occasion readers have even emailed me pointing to chapters in Human Action. Seeing as that around 1/3 of the readers of this weblog are libertarian that's never surprised me, and I haven't cared enough about economics to ever elaborate my distaste for the Austrian School. There are three reasons I'm going on the record now though.

1) I've developed an interest in economics as an academic discipline. In other words, I do know what an indifference curve is, or comparative statics, or business cycles. My adherence to Austrian economics seems analogous to a young man's infatuation with the prose stylings of Piers Anthony; I didn't know any better.

2) My readings in psychology and history makes it very difficult for me to understand how anyone could adhere to a Misesian form of Austrianism with its commitment to praxeology. In short, I really think praxeology is a rotten foundation for any system of thought. Certainly when someone espouses Austrian economics it makes me question if they're a bit nuts.

3) That being said, I'm curious to see how GNXP readers would respond to my objections and sentiments. Your responses should go in the comments (no emails please). I'm curious for two primary reasons: I want to know a bit more about the psychologies attracted to the Misesian school, and, there's an chance I'll revoke my critique and explore Austrian economics in more depth (more practically, I won't dismiss readers who espouse Austrianism as bizarros if I think I've been too harsh on Mises' work).