August 16, 2022
A few years back, Advances in Austrian Economics published an issue “assessing” the prospects of Austrian economics.
Contributors included Adam Martin, Dan D’Amico, Pete Boettke, Jerry Gaus, Erwin Dekker, Virgil Storr, Geoff Hodgson, Nicolai Foss, and others. Foss offered an interesting counterfactual of the development of post-World War II Austrian economics. His paper was also probably the most pessimistic about a future for AE.
In my reading, Foss laments the lack of bridges built to other complementary post-WWII developments—property rights economics, public choice, and even cognitive psychology of a Hayekian flavor. A few of these developments are what Boettke often refers to as “mainline economics”—though Foss takes issue with this designation elsewhere.
For the record, I find Boettke’s organizing principle more helpful than Foss does, but here I want to offer a counterfactual of my own.
This one is smaller and much less sweeping than what Foss attempts in his paper.
Mises’ Human Action was probably the most important book in Austrian economics in the 20th century—possibly of any century, and possibly, if Pete Leeson is to be believed, the most important economics book of all time.
Published in 1949 by Yale University Press, its German language predecessor is Mises’ Nationalökonomie: Theorie des Handelns und Wirtschaftens (1940).
It’s hard to overstate the importance of Human Action, even to those economists not identifying as card-carrying Austrians.
Gordon Tullock, who had no degrees in economics, says it’s the book that made him an economist.
I once read that Robert Tollison had a similarly high opinion. I wish I could remember the source of the following anecdote. Someone was once walking past Tollison’s office and asked him if he’d read Human Action. He replied something like “Of course I have! Every good economist has.”
Which brings us to the counterfactual. Might Mises’ 1949 magnum opus have had an even larger impact had the publishers gone with a different title?
Many people are aware of Mises’ book, but far fewer know that “Social Cooperation” was considered as a title, at least as relayed by Peter Boettke via Richard Ebeling here. The actual title evokes the highly abstract philosophy of action—to which Mises was a contributor.
Yet, as important as “action” is to the foundations of economic theory, it’s not what concerns or ought to concern most work by most economists. Rather, as Boettke puts it here, “Social cooperation under the division of labor is the central theme of economics even if it isn't always stated precisely that way.”
One low-hanging fruit benefit of the original title is that it would tamp down on the seemingly-endless ignorant criticisms of economics. No, Austrian economics is not “about” and no it doesn’t “assume” and no it doesn’t “advocate” (all things I’ve heard!) atomistic, individualistic actors/”agents.” No, AE doesn’t abstract away from social ties, family units, people’s beliefs, etc…If anything, it emphasizes them, relative to alternative frameworks. No, it’s not about (natural) “rights.” No, it’s not about “greedy” capitalists (or greedy anyone else). No, market competition is not analogous to the truly dog-eat-dog competition found in nature. Etc…
Relatedly, while the average person likely has no idea what “action” is and is likely unaware of philosophical sub-branches dealing with action, they at least have an intuitive grasp of interpersonal cooperation. Sometimes, this grasp is flawed, as in cases where they mistake cooperation for exploitation, but the concept is there nonetheless.
A less direct, but no less real benefit, of the original title is the impact it might have had on economic research itself. The central problem of the social sciences is how subjective choosers coordinate their actions in a way that yields widespread mutual benefit and even order. It’s sometimes expressed (marginally) differently, but that’s basically it. This problem is hard enough when we’re simply talking about social cooperation under the division of labor. But how is cooperation achieved under hard-case conditions?
An implication is that one not need not litter their papers with citations to the classics in order to be doing Austrian-inspired research. A “social cooperation” focus would direct our attention “out the window” (to use Coases’ phrase), but would do so in a way that is theoretically-grounded, as Menger and Mises both taught.
Furthermore, a focus on order, to my mind, doesn’t rule out “designed orders” like firms, but it does direct the researcher’s attention to the “what problem were they solving?” question. The reason we see such a panoply of organizational forms is because people are confronting unique problem situations which to which they devise unique institutional/organizational rules for overcoming those problems, in order to seize the gains from cooperation.
Speculative here, but a “social cooperation” focus might have generated fewer intra-Austrian squabbling and a more shared vision of examining how real-world institutions either facilitate or impede social cooperation under the division of labor. How did these institutions evolve? What function do they currently play? Etc…
How’s that for a missed opportunity?