Part 1: A Legacy outside the institution
Part 2: Currents in Austrian School; fundamentalism, scholarship, media, etc..
part 3: Financial economics: The Efficient Market Hypothesis
Part 4: Classsical economics and Market Socialism; Updating classical
Part 5: Hayek vs. Central Planning; Hayek Vs. Rational Expectations
Part 6: The Cycle and Rational Expectations; island Parables
Part 7: The Cycle as a Prisoner's Dilemma -- in "Anarcho Capitalism"?
Part 8: 2008 Crisis and Market Efficiency; Keynes vs. Chicago vs. Hayek vs. Warren Buffett
Rothbard breathed on the dying coals of the Mises-Hayek rebellion by writing books and becoming an activist. He was behind several libertarian ventures including the establishment of the LvMI. While think tanks are day spas for working academics to unleash pent-up ideological stress, as the Austrian School was already on the fringe, the LvMI may have become more of a gathering spot for disparate pockets of Austrian believers of varying agendas rather than merely an indoctrination factory.
One current within the Austrian world is Christian Fundamentalism.
When Gary North accepted one of the handful of Murry Rothbard medals that the LvMI has bestowed upon Mises scholars, he exhorted the rising generation,
Gary North wrote:Go and do thou likewise. You will not be as gifted as Rothbard. You will not write Man, Economy, and State. You will not write — I guarantee you — you will not write a monograph as revolutionary and yet as accurate as America's Great Depression, even if you work real hard. And you know the great thing about it? You don't have to. Because it got done. It's been done.
It goes without saying that this mentality is 180 degrees opposed to science and scholarship.
Gary North wrote:How many people do you think are in this room? If each of you wrote three articles or five articles in the next five years and you stayed in communication with each other, just keeping up with each other in this room would keep you very busy...
But what you can do is to go where no one else you know has gone, and hardly anybody else is interested in, and nobody really wants to focus on, and you can niche that; you can own it; you can make it yours. And if all you do is put up a Website with links to all the other Websites or articles or materials — if all you are is a clearinghouse on the Web — you are doing something tremendously important.
Go out and create link farms in the name of Rothbard, sculpt economics, among other subjects, into the image of Evangelical Christianity.
http://www.lewrockwell.com/north/north288.html
Then there are the efforts to legitimatize Austrian theory. Roger Garrison, an economist at Auburn and a key figure within the Austrian School, has put much effort translating Austrian economics into modern economics language and arguing for it. One of his books is a graphical reduction of Austrian macro. From an interview with Garrison,
Interview with Garrsison wrote:Q3: Is Austrian macroeconomics a contradiction in terms? In your book, you ask Austrians to accept that the market processes have consequences for macroeconomic aggregates. What was the reaction to this approach?
Garrison: The reaction was really mixed. As I already mentioned, Rothbard liked my Austrian Macroeconomics, but I also got some hate mail from people who said that it was a sacrilege to Mises to represent his ideas with macroeconomic graphs; it was just unacceptable.
Work like Garrison's has been built on in recent years by economists who consider themselves Austrian. Arguments are getting more ambitious, meaning, more conscious of mainstream criticism--to the extent the mainstream takes notice and cares. Not to say that acceptance by the mainstream is by any means a goal here, but, speaking a common language by which to arbitrate ideas is already a compromise.
http://www.auburn.edu/~garriro/garrisoninterview.htm
The Austrian School holds a real attraction for investors and fund managers. In fact, one of Cleon Skousen's nephews, a hedge fund manager, has quite a name within the Austrian community. Now you may have seen that coming, but how about this. The University of Chicago and Wall Street are arch rivals. I'm not saying Chicago-trained economics and business students don't go to Wall Street, I'm sure they do so in droves, but in school, students are outright taught that active fund management, and a lot work done by financial industry practitioners, is essentially phrenology. The Austrian School, on the other hand, believes strongly in the entrepreneurship of building wealth through smart investment strategies and is highly critical of Chicago's financial market theories.
And then there's a populist angle. I'll introduce this one with a sentiment that I can deeply appreciate. This comes from the Interview with Joseph Salerno I quoted in part 1,
Salerno wrote:These kids put up with a lot of baloney in school, and the tedium of their regular classes tends to strip economics of its essential content. They go in thinking they will learn about how societies materially advance, how civilization comes about and is preserved. Instead, they end up slogging through years of pointless mathematical exercises.
I'm all for paying dues, but at some point students need to have their imaginations sparked. You can see that happening here. It reminds them why they liked economics in the first place.
The man knows what he speaks of. My first economics class was the single best college course I ever took. Granted, even that course received complaints about being too hard, designed to keep students out of the major, but though it might have been a little rough on the curve, I don't think anyone could have said it wasn't exceptionally well-planned and executed. It was taught in the Tanner building, the glass edifice of BYU's business school, which gave it a nice success-driven aura. My teacher was an economics historian and this guy had mastered developing theory through historical context and the lens of current events. But that was the bait. The switch came one course later. Every course from then on out, save one or two, could have tied dead last as the worst classes I've ever took. And it's not that I didn't like math, I took math I didn't need on the side to pad my GPA; I may have had a minor there. It's tough to explain, perhaps like Outer Darkness, only those who experience it can understand. So off to the deteriorating office buildings of the school's headquarters, converted latrines from the old gym, to discuss concerns with the professors. They encourage me to tough out a year or two of theory, and the rewards will come when applying these tools to real subjects. Ok, that sort of happened, but not to an appreciable degree, and sometimes in outright depressing ways, as I'll touch on in later posts.
But what should one's expectations be of the subject? Reading through the Austrian literature, the bulk of it doesn't exhaust the depth of a first-year course. The economics, that is. What is needed is two or three real economics courses along with classes in political science, American history, journalism, and geography. A holistic and descriptive approach. But would this angle improve the field? My guess is no, such an approach would not be rigorous enough to make advancements. If I were to take a counterfactual me, and put the total time I spent sitting in class listening, studying, or taking exams -- and this is a fairly small amount of time -- double it, and apply that same time to reading books by Rothbard and LvMI scholars, discussing with the bloggers, attending LvMI events and writing papers, would I be in a better position than I am to answer economics questions? However bad of a position I may be in today, I think I am in a much better position to do do economics research than counterfactual me, even if my goals were to argue for Austrian views.
But the ability to communicate ideas with real peaple in the real world gives the Austrians a huge advantage. Mainstream market economists have no public face that I'm aware of and their work is not user friendly, for a variety of reasons. Austrian economics on the other hand is accessible, in touch with the layman, and seriously taking advantage of the internet and media, especially since the 2008 crisis. The Austrian Business cycle, the central dogma of the Austrian School, has an intuitive explanation for the 2008 crisis. The success of ABC predicting and explaining the crisis, and the failure of the mainstream, is an emerging belief among conservatives. And it's not just Ron Paul plugging the Austrian School on TV and Michelle Bachman taking her copy of Human Action to the beach to read, Greenspan may have converted and Bernanke has shown sympathy. It's becoming easy to find articles like this one from the New Republic:
"Americans are not sold on Austrian Economics."
http://www.tnr.com/blog/jonathan-chait/ ... -economics
The assumptions here are fascinating. We apparently have the choice of either accepting the Keynesian school or the Austrian school. Milton Friedman had no idea what he was getting the world into when he died.
And for the highlight of this edition, the reward for reading this far, I offer you this rap video that's gone viral, Fear the Boom and the Bust. MC Keyenes and MC Hayek have it out. Because you know, this represents the two competing views out there about macroeconomics.
http://econstories.tv
The Austrian School is educating the world on economics, an education where the mainstream ideas of the recent forty years or more are entirely absent. Maybe they'll get their revolution.