Mises Pieces

Thinking back about this past week at Mises University, I'd like to offer some well-deserved praise coupled with a just a wee-bit of constructive criticism. Mises U. satisfied far beyond my expectations, but I still see some room for improvement.

When I first heard the term Mises University, I thought it was just a colloquialism. Surely, it is not possible to simulate the college experience in only one week, right?

Wrong. The structure and content of lecture sessions offered at Mises U. meets and even surpasses what one might expect from a traditional college environment. The professors are all excellent - I felt as if I was surrounded by intellectual celebrities with the likes of Roderick Long, Hans-Hermann Hoppe, Walter Block, et al. I developed stronger relationships with more fellow students in one week than most people do in four years of college.

In fact, although I originally intended to do some live-blogging, I quickly realized that this would be impossible. During the day, our time was fully occupied by the sessions themselves, and I could not bring myself to tune-out the lectures just to share these pearls of wisdom with you, kind readers. The only free time was at night, and who wants to blog when they can be out drinking with friends till the wee hours?

Randall already mentioned it and I must concur: it was great to be surrounded by like-minded people. Never have I met so many libertarians in one setting, let alone so many radical libertarians. And while I was probably the only ethical subjectivist in attendance, both students and professors were open to my contrarian views, and willing to debate the relative merits of consequentialism and natural rights deontology for hours on end. In fact, Roderick Long and David Gordon gave a lecture together on this issue: Gordon discussed Murray Rothbard's semi-objectivist critique of Ludwig von Mises's subjectivist ethics and Long focused on some points of weakness in Hans-Hermann Hoppe's Argumentation Ethics and Ayn Rand's Objectivist Ethics. I'll discuss the contents and my impression of this lecture in a future post.

In between lectures and during meal times, I was able to approach various professors and question them about the merits of their arguments. I spent an hour or so arguing with Professor Hoppe about his Argumentation Ethics, the merits of neoclassical economic analysis of law, the Austrian objections to the Coase Theorem, Randy Barnett, and Hoppe's position on immigration. I spent another hour talking with Walter Block about the gold standard and the legitimacy of fractional reserve banking. I had a fun bar conversation with Thomas DiLorenzo about whether John C. Calhoun and the Southern Confederacy in general is worthy of praise. During dinner one evening, I presented my criticisms of Homeowners Associations to Joseph Salerno and Peter Klein, which somehow turned into a discussion of materialism vs. idealism and whether ideas or economic/technological conditions are more important for implementing and maintaining social change.

But I spent the most time talking with Roderick Long. Walter Block's student fan club called themselves the "Blockheads"; Jörg Guido Hülsmann enjoyed the support of the "Hülsmaniacs"; Randall and I-- making up in spirit what we lacked in numbers--formed the fearsome "Longfellows." My abstract discussions of philosophy with Dr. Long inevitably became brainstorming sessions for jokes about Austrians and Randians. Two of Long's jokes:

Q: How many Austrian economists does it take to change a light bulb?
A: We don't make quantitative predictions.

Q: What is an Austrian economist's favorite candy?
A: Mises Pieces.

Thanks, folks, He'll be here all night.

And now for my criticisms. I'll have more to say in my future posts, but here are some general thoughts. While I am not as hostile to Austrian methodology as I was a week ago, I still am not entirely convinced that a prior reasoning is superior to empiricism when doing economics, nor am I convinced that empiricism should be entirely rejected as the Austrians advise. I'm starting to think that perhaps both are valid means of acquiring true knowledge. In the same way that consequentialism and natural rights deontology often lead to the same conclusions in the realm of ethics, perhaps neoclassical empiricism and Austrian a priorism can also be used together the same way debits and credits can be used in accounting to serve as a check on one another. Whether this is because both methods describe the same reality, or whether one is merely a derivation of the other, or whether both are derived from a third, undiscovered method, I do not know. But what I would like to see is more exploration of the fundamental similarities and differences between Austrian and neoclassical economics. Randy Barnett and other libertarian theorists have been doing much work lately exploring these issues in relation to natural rights and consequentialism. I see little work being done to try to unify rather than sharply divide Austrian and neoclassical economics.

And this brings me to my main criticism. Austrians complain about being marginalized by the rest of the economics profession, yet all too often, they intentionally distance themselves from the mainstream for no good reason. Milton Friedman and other free-market neoclassicals are the target of much Austrian scorn. For example, at the end of his lecture on Law and Economics, Professor Hoppe said, and I quote, "Chicago School [economists] are worse than communists." Why? Because people like Milton Friedman (David too, I wonder?) have a "dangerously false reputation as defenders of the free market." At least communists are open about their hatred of capitalism. According to Hoppe, I guess, Milton's just another word for Marx.

Now, I can understand why hardcore Austrians might be wary of moderate neoclassicals. After all, Mises--not even the most radical of Austrians--famously told Milton Friedman and others in the Mont Pelerin society, "You're all a bunch of socialists!" And if all neoclassical economists followed their methodology to the conclusion of welfare-state liberalism, the Austrians might even have a point. But, in fact, that is not the case. There are neoclassical economists--David Friedman, Bryan Caplan, and Bruce Benson to name only three--who follow their methodology and reach the same free market conclusions that Hoppe and Rothbard reach. And there are numerous Austrian economists--Mises being the prime example, but I believe Peter Boettke, Roger Garrison, and Jeffrey Herbener are examples as well (I apologize in advance if I have mischaracterized anyone's position)--who accept just as many compromises to a truly free market as Milton Friedman and other Chicago School economists. Surely, if Milton is worse than Marx, then so is Mises.

Peter Klein gave an excellent presentation on the theory of the firm which borrowed from advances made in both Austrian and neoclassical economics and melded these two into a coherent and stronger whole. I'll discuss this presentation in a future post, but for now I mention it only to demonstrate what good can come from working together rather than excommunicating each other into isolated camps.

Some relatively minor criticisms: it would have been nice to see more debate between the faculty, rather than only lectures. I know that time constraints don't allow for this kind of flexibility, but I think most students are better able to absorb material when they are exposed to different viewpoints and all the various sides of a debate. Maybe this wouldn't work for the Mises U. format, but I would love to see the Mises Institute invite David Friedman or Bryan Caplan (who used to be affiliated with the LvMI when he was in undergraduate school) to speak at a conference and discuss methodological differences. After all, if the Mises Institute is willing to invite someone like Paul Craig Roberts to speak against free trade, surely their differences with Friedman and Caplan are relatively minor in comparison.

Finally, while members of the faculty were experts in economics, philosophy and history, it would have been helpful to have a law professor or someone adequately trained in the theory and practice of law on staff to present a lecture or two on legal theory and jurisprudence. Much of Austrian economics, especially the focus on property rights, depends upon how the law defines these things, how judges can and should resolve legal disputes over property rights, and how a market in law might function. I mentioned this to Dr. Don Printz, a generous supporter of the Mises Institute and a personal friend, and he warmed to the idea, so perhaps next year's students will get to enjoy the insights of some as-yet-to-be-determined Austrian legal theorist.

All in all, a wonderful experience and one I would recommend to anyone interested in Austrian economics or looking for an alternative perspective to the mainstream neoclassical paradigm. Well done, Mises folks.

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I don't see how you can get

I don't see how you can get anywhere without both reasoning and empiricism. For example, how do you get your priors for a priori reasoning? Would a brain in a vat with no sensory stimulation except random noise and lights be able to come up with Austrian priors? Hell, no.

OTOH, if you only collect observations and never try to derive simple rules to explain them, you don't have a theory, you just have observations.

Science works by a feedback cycle of hypothesizing theories, testing them, and revising them. If you don't test, its not science. If you don't reason, you aren't going to find simple hypotheses with a good chance of being true.

While neoclassical

While neoclassical economists tend to favor the free market because they understand it, they can hold any political view.

Political views depend on your moral beliefs, about what societies should be designed to maximize. A neoclassical could be an anarcho-capitalist, like David and I, or be left-wing and want major wealth distribution. Understanding neoclassical econ will structure our ways of going about these goals (ie the liberal economist will propose much less stupid policies than the ones currently in use), but I don't see what it has to do with choosing them. (although it can influence themm ie a potential liberal might decide that there is just no good way to accomplish their goals, and give up)

I'm not sure it's still

I'm not sure it's still accurate to call Bruce Benson a neoclassical economist. My understanding was that Benson started out in the neoclassical and public choice camps, but later shifted to a more Austrian perspective. This is supported by his libertarian autobiography.