Abstract
Mises and Hayek in the 1920s and 1940s thought of their work as within the orthodoxy of economic science. But after WWII it became increasingly obvious that the contributions of Mises and Hayek were out of step with the way the economics profession was evolving. But starting in 1974, due to the organizational efforts of Murray Rothbard and Israel Kirzner, and bolstered by the awarding of the Nobel Prize in Economic Science to FA Hayek, a resurgence of interest in Austrian economics by young scholars was initiated. Starting in 1984, but significantly in 1985, the work of the new generation of Austrian economics started to have an impact in the mainstream outlets in terms of journals and university presses. We argue that this is a defining year in the modern history of the Austrian school and that it reflected both the quality of work being done by the new generation as well as a methodological crisis within the mainstream of economic scholarship. Don Lavoie’s work in comparative economics, as well as his work in methodology, reflected this shift within the economic conversation.
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Notes
See Vaughn (1994) for historical accounts of the South Royalton conference.
See, for example, The Ultimate Foundation of Economic Science, originally published in 1962 and rescucitated in 1978 after South Royalton.
The following is based on notes taken by Prychitko on September 9, 1985 in Lavoie’s Austrian Theory of the Market Process II course at George Mason University.
To be sure, that evolution is not linear and often past ideas and insights are lost in an attempt to twist them into a narrative that claims that all that was worthwhile in earlier eras has already been successfully incorporated into the present. For more on this matter, see Boettke et al. (2010) contra-Whig defense of the history of thought.
See Storr (2010) for a sympathetic challenge to this enterprise, which suggests that Lavoie need not have gone beyond Schutz to expound on his methodological points. Several years earlier Prychitko also challenged both Lachmann’s and Lavoie’s hermeneutical project. Prychitko (1994) evaluated Lachmann’s economics of the plan as being too embedded in the older hermeneutics of Dilthey, as opposed to Gadamer, which led him to focus almost exclusively on the mental intentions of individuals and didn’t clearly account for unintended consequences. Prychitko suggested that this approach colored Lachmann’s “equilibrium never” position, and that Gadamer’s more radical hermeneutics might better undergird the spontaneous order properties of markets. Later, Prychitko challenged Lavoie’s call for a vague “economics of meaning,” an interpretive framework that Lavoie developed in his introduction to his 1994 collection of Ludwig Lachmann’s essays. Prychitko felt Lavoie’s concern for hermeneutics lost sight of Lachmann’s primary theoretical concerns: a theory of capital and expectations. For more, see Prychitko (1997a, b) and Lavoie (1997).
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Boettke, P.J., Prychitko, D. 1985: A defining year in the history of modern Austrian economics. Rev Austrian Econ 24, 129–139 (2011). https://doi.org/10.1007/s11138-011-0142-8
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DOI: https://doi.org/10.1007/s11138-011-0142-8