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Modern mainstream economics is a plurocracy in which there is no orthodoxy of ideas, only an orthodoxy of method. Given the training it provides its students, mainstream economics' natural domain is science. With the mainstream's acceptance of complexity views of the economy, Austrian economist's views can now get a hearing within the mainstream. Thus, within the science of economics, there is no need for a separate Austrian economics. However, there is a need for Austrian economics in political economy, the branch of economics that takes the insights of science and relates them to policy. The paper urges Austrian economics to embrace political economy as its domain and to position its work within political economy.

In 1978, Philip Klein wrote about institutional economists of the Veblen-Commons-Mitchell-Ayres variety: Whatever we call ourselves, we are not given much credit generally among our fellow economists, but I think there is evidence that an ever-wider group of economists has begun to hear what we are saying and to accept a number of our premises…institutionalism must be viewed as either never having died or as being in the process of a resurrection which I suggest will endure (Klein, 1978, p. 252).Klein’s optimism seems justified by the following quote from Joseph Stiglitz’s new book, Globalization and its Discontents: Old-fashioned economics textbooks often talk about market economics as if it had three essential ingredients: prices, private property, and profits. Together with competition, these provide incentives, coordinate economic decision making, ensuring that firms produce what individuals want at the lowest possible cost. But there has also long been a recognition of the importance of institutions (Stiglitz, 2002, p. 139; emphasis in original).Klein and other original institutionalists should be buoyed when they hear such a statement from a recent Nobel Prize winner. One problem, however, is that the “old-fashioned textbooks” are still being published in 2003. The quote also raises a question: just who recognized the importance of institutions and when did they recognize it? Statements such as the above by Stiglitz irk original institutionalists, but why? Is it because he underestimates the prominence of perfect competition in current texts, because he is understating original institutionalists’ positions as “keepers of the faith,” or both? In any case, we may not be able to hoist the V(eblen)-C(ommons) banner and claim total victory but, increasingly, more of economics today is institutional economics. A recent article by Allan Schmid demonstrates that indeed though everyone is not an institutionalist in the Veblen-Commons mold, “good economists find it useful to embrace some of its various elements” (Schmid, 2001, p. 281).

There are more scholars teaching and actively engaged in research associated with the Austrian School of Economics now than at any other time in its history. However, there is still something seriously wrong within the Austrian School and changes must be made both individually and collectively. In this piece, the author first discusses scientific progress with an emphasis on the individual behavior that is required to contribute to science, and the horizontal relationships that are required for the spread of ideas within a scientific community. Next, the author discusses the example of the Austrian school from 1950 to today in terms of these horizontal relationships within the profession and, in particular, in comparison with other mainline contributors during the same time period. The author then will address the multiplicity of horizontal relationships that might be explored as alternative discourse communities in the contemporary intellectual landscape. Lastly, the author concludes that the Austrian School of Economics must cultivate an explicit awareness of plausible, intrinsically interesting, and creative research agendas, and must therefore regard their work as a productive input into the ongoing research production of others within the broader community of economists and political economists.

This chapter provides a comprehensive survey of the contributions of the Austrian school of economics, with specific emphasis on post-WWII developments. We provide a brief history and overview of the original theorists of the Austrian school in order to set the stage for the subsequent development of their ideas by Ludwig von Mises and F. A. Hayek. In discussing the main ideas of Mises and Hayek, we focus on how their work provided the foundations for the modern Austrian school, which included Ludwig Lachmann, Murray Rothbard and Israel Kirzner. These scholars contributed to the Austrian revival in the 1960s and 1970s, which, in turn, set the stage for the emergence of the contemporary Austrian school in the 1980s. We review the contemporary development of the Austrian school and, in doing so, discuss the tensions, alternative paths, and the promising future of Austrian economics.

The papers collected here were written for the second biennial Wirth conference on Austrian Economics. The Wirth Institute for Austrian and Central European Studies sponsored the conference in cooperation with the University of Toronto in Mississauga. The conference was held from 17 to 18 October 2008 in Mississauga. The Wirth Institute has a natural home in Edmonton on the campus of the University of Alberta, which is a leading center for Central European Studies. The fact that the Institute has received support not only from government of Austria, but also from the governments of the Czech Republic, Hungary, Poland, Slovakia, and Slovenia reflects its historically minded recognition of the unique intellectual milieu of the Habsburg Empire. This intellectual milieu lasted beyond the breakup of the empire right through to the Anschluss in 1938. It is this milieu that shaped the Austrian school of economics and helped shape the context for the conference.

What are the value theories used by art economists which can help define the field as a unique research program? We categorize the research program in art economics in Lakatosian terms and find that art economists share a value system around art which is that art contains value beyond that of exchange. This difference introduces a “paradox” of value to be addressed (either implicitly or explicitly) by the art economist in practice, in that mainstream economics assumes value is realized through exchange only. We then survey the literature and find evidence to support this value paradox claim. We also find that the art economics research program does not adequately address the potentiality of the state using art as instrumental value and introduce political economy to factor in a self-interested state using art production as a means to reproduce and ideally expand state legitimacy and power in society. We then give two examples of art-statism in practice to illustrate the possibility of art’s instrumentality.

Certain elements of Hayek’s work are prominent precursors to the modern field of complex adaptive systems, including his ideas on spontaneous order, his focus on market processes, his contrast between designing and gardening, and his own framing of complex systems. Conceptually, he was well ahead of his time, prescient in his formulation of novel ways to think about economies and societies. Technically, the fact that he did not mathematically formalize most of the notions he developed makes his insights hard to incorporate unambiguously into models. However, because so much of his work is divorced from the simplistic models proffered by early mathematical economics, it stands as fertile ground for complex systems researchers today. I suggest that Austrian economists can create a progressive research program by building models of these Hayekian ideas, and thereby gain traction within the economics profession. Instead of mathematical models the suite of techniques and tools known as agent-based computing seems particularly well-suited to addressing traditional Austrian topics like money, business cycles, coordination, market processes, and so on, while staying faithful to the methodological individualism and bottom-up perspective that underpin the entire school of thought.

Praxeology is defined by Rothbard (1962, p. 64) as “The formal implication of the fact that men use means to attain various chosen ends.” While men use means to attain ends in areas other than economics (e.g., war, voting), the dismal science is the only deeply elaborated subdivision of praxeology. Rothbard (1962, p. 63) defines praxeological economics in contrast withpsychology [and]…the philosophy of ethics. Since all these [three] disciplines deal with the subjective decisions of individual human minds, many observers have believed that they are fundamentally identical. This is not the case at all. Psychology and ethics deal with the content of human ends; they ask, why does the man choose such and such ends, or what ends should man value? Praxeology and economics deal with any given ends and with the formal implications of the fact that men have ends and employ means to attain them.¹