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Over the last three quarters of a century, the discourse on economic and social policy has oscillated between two polar opposites: an interventionist approach and a free…
Over the last three quarters of a century, the discourse on economic and social policy has oscillated between two polar opposites: an interventionist approach and a free market-oriented one. The former led to the establishment of the Keynesian welfare state and was dominant in the post-war years, but the latter gained much ground beginning in the 1980s, forcing defenders of the welfare state to retreat into a more defensive position. In the wake of the ‘Great Recession’, however, these two visions are once again sustaining vigorous debates in the global public arena. Economists in their role as policy advisers and public intellectuals, in other words as ‘experts’, have participated actively in such debates; the gains made by (what its critics call) ‘neo-liberalism’ were due, in no small measure, to the growing prestige and influence of Austrian economics. The experts’ discourse tends to be a historical and arguments are often phrased in terms of supposedly ‘cutting edge’ theoretical and empirical advances.1 Yesterday's theories are judged obsolete and irrelevant. I argue that a more historically informed perspective can actually be more rewarding.
This volume contains papers given at the third biennial Wirth Institute for Austrian and Central European Studies Conference on Austrian Economics. The conference was held…
This volume contains papers given at the third biennial Wirth Institute for Austrian and Central European Studies Conference on Austrian Economics. The conference was held at a beautiful waterfront facility of Simon Fraser University on October 15 and 16, 2010. In spite of all warnings to expect fog and rain in the Pacific Northwest, the weather was sunny and mild, as were the spirits of the conferees. Our topic title, “Austrian Views on Experts and Epistemic Monopolies,” was perhaps a bit misleading because some of the views represented were not “Austrian.” Indeed, the editorial mission of Advances in Austrian Economics has been to promote dialogue between the “Austrian” tradition of economics and other traditions both within in economics and beyond. Participants discussed the problem of experts from several Austrian and non-Austrian perspectives. While representing different points of view, the participants did tend toward the view that experts may pose a problem in one way or another, especially when they enjoy an epistemic monopoly.
I look forward to hearing your presentations of your papers. And, perhaps even more importantly, learning and obtaining new insights from subsequent interaction. As our Austrian School forbears stated, our knowledge as individuals is very limited and all of us will often make mistakes. The increased expertise has not improved this – it may be harder now as each expert knows more and more but about less and less as his field becomes ever more concentrated and thereby shrinks.Yet by our interaction, usually in some form of competition, our varying expertise, differing knowledge and individual approaches will get the total closer to right over time. We’ll approach equilibrium but of course never quite get there since nothing stands still and the world itself is constantly changing.I have always been fascinated by that miracle in which competing entrepreneurs produce an outcome that is more efficient and better than most would have done individually and look forward to obtaining greater insights as you present your papers.We last met in the fall of 2008, a period of rapid financial meltdown and severity of stress none of us had ever experienced. Of course the last similar crisis took place nearly 80 years ago in the 1930s, long before any of us were born. And in that distant past, there were two main suggestions of how to fix it: the Austrian approach and that of J. M. Keynes. Part of the latter's solution was applied then, and again this time.We asked the attendees, most of whom are represented by the papers in this volume, for comments or suggestions: What would you do now?We spent an hour in this discussion and, I believe:1) recognized that the Austrian School approach would be to allow interest rates to revert to normal levels from the artificially low yields which had misled entrepreneurs in the first place, but 2) accepted the reality that today's politicians had to take action and be seen as doing so.Three weeks earlier I had attended two days of meetings of the Hayek Society in Vienna. Along with some academics, the majority of the members consisted of business men, lawyers, practicing economists, psychologists and even politicians including the two Mr. Pauls from the US (Representative Ron Paul by video call). To my surprise, the consensus appeared to be to let business work out its own problems because no person, not even an expert, can know the future and therefore a perfect solution.It appears that the massive infusions of cash by all governments really have shortened the duration of our global problems. We must be grateful, but we also still need a long-term solution. As I said then and repeat now, giving a drunk some more drinks the morning after makes his hangover more bearable, but we still need to find out how to wean him off excessive alcohol. Our governments have spent, and in most cases are continuing to spend much more money to get us past the meltdown. But this money will need to be repaid by future spending cuts. And we are still living with abnormally low interest rates which will at some point mislead entrepreneurs into risky ventures with inadequate returns. We are building the next bubble.While no one knows exactly what we should do, I expect that the insights and views on expertise presented here, may help to clarify this challenge.
This chapter conceptualizes the Kirznerian entrepreneur as performing a unique and crucial role of driving an open-ended market process. Entrepreneurial alertness is a theoretical concept that occurs prior to choice and consists of changing perceptions of prices and real resource constraints. This chapter emphasizes the role of subjective perception in both arbitraging and innovative entrepreneurship and develops a simple matrix to synthesize these dual roles. This unique epistemic position in the market process qualifies both the arbitraging and innovative entrepreneur as capable of performing functions that are nonreplicable by experts outside the system.
Today, there is no academic or sociocultural context in which Austrian Economics (AE) is described as being dominant. AE is and remains, for better or for worse, a…
Today, there is no academic or sociocultural context in which Austrian Economics (AE) is described as being dominant. AE is and remains, for better or for worse, a heterodox current. In the United States, however, but probably nowhere else in the world, AE is heterodox without being invisible or inconsequential. American scholars for whom AE is their preferred paradigm have been able to participate actively in the sort of “discussions” that Arjo Klamer (2007, p. 4) wishes to encourage. They are taken seriously by fellow economists. The vitality of American AE has no equivalent in the rest of the world.1 Obvious constraints of time and space prevent us from offering supporting evidence for this sweeping statement, but in this paper we propose to take a close look at the French case. AE has made few inroads in France. There was a brief period in the 1980s when it was the object of some short-lived enthusiasm; since then interest has waned, although there are indications that the tide might yet again be turning, and in fact, as compared to many other western European countries, France may turn out to be, all things being relative, a less infertile ground than might a priori be thought.