To put it bluntly, what are the major differences between the two and whats the deal between the feuding?
I'll admit, as far as I know I have not read any explicit "Masonomics" books, but my understanding of the difference is that George Mason tends to stress Hayek more along with more "mainstream" (hopefully I'm not angering anyone with that) monetary theories and methdological approaches. They also seem to cite Mises as supporting their views (FRB etc) while downplaying Rothbard. Mises Institute is more Rothbard (who they say is more in tune with Mises) and the "traditional" Austrian approach. Am I missing any other significant distinguishes?
So whats the drama between them all? Judging by various posts on the internet they appear to have different academic ideas and some of their arguments can get a little personal at times.
Finally, what happened to Gene Callahan? I remember reading his book along time ago and loved it, and now I hear he isn't an Austrian anymore (although he frequents over at Coordination Problem and generally bashes Rothbard). Then I read on a post here he got mad over his book deal with the MI, but I don't know if this is trash talking or not.
And for a bonus question, if you had to pick a "side", which do you prefer? Honest.
For me, Mises Institute.
I actually spent a lot of time reading the back and forths on this to figure that out myself. It depends on how much time you have and how much you really care.
These are in chronological order. Basically the more of these you read through, the better answer you'll have for what you're looking for. There are other discussions elsewhere that shine a lot of light into differences with institutes like Cato, as well as among individuals, but for GMU/LvMI, this is probably as good a view as you'll get without being inside.
Obviously a lot of the insight to be gained is in the comments of these. And there's a lot of them. If you follow the discussions from the posts, to the comments, to the responses on the other blogs (most usually the Austrian Economists blog), and read though those comments, you'll get pretty much what you're looking for. But then again, the question is how much are you looking for and how much do you really care...as in how much time do you really care to spend going through this kind of stuff. For me it was interesting to at least get an idea of who people really are...to get a glimpse of the personalities and personal leanings of the people whose work and names I'm so familiar with, as well as the "underworld" if you will, of the libertarian/AE circuit.
Salerno on 10 Austrian Vices and How to Avoid Them
Clarifying some misconceptions
Mundane Austrian Economics
More on Masonomics
There you go again, Pete
Salerno: The Sociology of the Development of Austrian Economics
Modern Austrian History: A Response to Pete (Part 1)
Well what are the differences of being a rothbardian and misesian ( besides natural rights vs utilitarianism). I think the Mises Institute uses Rothbard alot because his economics is Misesian economics in simple language.
My Blog: http://www.anarchico.net/
Production is 'anarchistic' - Ludwig von Mises
"Well what are the differences of being a rothbardian and misesian ( besides natural rights vs utilitarianism). I think the Mises Institute uses Rothbard alot because his economics is Misesian economics in simple language."
Hayek essentially rejected praxeology. That's why he doesn't feature more as part of the cool club. From that point about difference in methodology it translates into a vast amount of "compromise" and "selling out" (concessions on the validity of the state). Something neither Mises nor Rothbard did.
Well, George Mason is not a think-tank, it's a university. Therefore, the palette of professors and administrators is going to be, by default, more diverse. Ludwig von Mises Institute usually attracts a very specific set of minds, although, ultimately, I don't think the professional core of either are really that intellectually opposed. Of course, many economics professors at GMU are not Austrian, at all (Bryan Caplan, Tyler Cowen, Walter Williams, et cetera). It's also important to distinguish between people who blog with GMU professors, but are not GMU professors (Horwitz, Rizzo, et cetera).
Regarding Hayek versus Rothbard, it really depends on the professor. Lawrence White is well read on Mises, given his attempts to homogenize Mises's theories of money and banking with his own theories of free banking. Peter Boettke (who, as far as I know, is not a free banker [as in, a follower of Selgin's and Whites's theories]) uses Man, Economy, and State as one of his main textbooks. I don't know the work of Don Boudreaux (the name of his blog, aside), Chris Coyne, Russ Roberts, Peter Leeson, et cetera, but I really don't think it's an issue of Hayek versus Mises. I think there's a lot of focus on the fractional reserve banking argument, and it makes it seem as if they depart from Rothbard. In fact, though, apart from the issue of banking and, perhaps, other issues elsewhere, there are not many differences between the two. So, it doesn't make sense to say that they 'downplay Rothbard'. They might just source other people's work, but agree with basically the same things.
I have infrequent crossings with Callahan, and it just seems that he dropped the moralistic approach to libertarianism. I think that this made him drop libertarianism altogether. I can't really comment on his political beliefs, because I honestly don't know them, and the same goes for his views on economics (maybe I don't read his blog often enough). I'm not sure what he accepts or rejects anymore; I know that I'm critisized him on his views on overproduction, but Robert Murphy actually strangely agreed with Callahan.
Also, I think it's worthwhile to comment on something said in another post above mine. Hayek did not 'essentially reject praxeology'. If you've read his comments on methodology in Monetary Theory and the Trade Cycle and The Counter-Revolution of Science, you know that his methodological position is actually close to that of Mises. Hayek did not consider himself a praxeologist, and of course his methodology was not praxeology, but it's disingenious to make the claim that he 'rejected' praxeology. Hayek's and Mises's methods of economic study were actually quite similar. Furthermore, if anybody has respect for Hayek it's not because of his views on praxeology, but because he simply has had a large impact on the Austrian tradition since the early 1970s. By the way, many of the fractional reserve bankers have written extensive guides to praxeology, including George Selgin.
Also, praxeological economics has nothing to do with political views, so a rejection of praxeology is not what causes leading one to believe in the validity of the state. Hayek came to Misesian economics with a much more different social perspective, and so there is no reason to be surprised that his political views were different to those of Mises. Furthermore, these political views have no bearing on Hayek's popularity within academia.
Jonathan M. F. Catalán:these political views have no bearing on Hayek's popularity within academia.
I really don't want to derail this thread, because I think this is a decent subject and deserves discussion and answers. But two things on these new topics that have been introduced.
1) Hayek himself said that he and Keynes were the two best known economists and then he "discredited himself by publishing The Road to Serfdom." I don't quite see how you could claim Hayek's political views "have no baring on his popularity with academia" when, again, by his own admission, he was almost forgotten for 30 years after publishing his opus...unless you want to try to argue that book in no way expressed any politcal views.
2) Block has done a great job of highlighting Hayek's consessions, more or less exposing Hayek as more of a sort ordoliberal than many would probably guess.
Hayek also said he probably would have been an anarcho-capitalist had he been born in a later generation. Hayek also was far more "libertarian" than Rothbard when it comes to banking and money.
Source of your quote please.
John James,
Hayek himself said that he and Keynes were the two best known economists and then he "discredited himself by publishing The Road to Serfdom." I don't quite see how you could claim Hayek's political views "have no baring on his popularity with academia" when, again, by his own admission, he was almost forgotten for 30 years after publishing his opus...unless you want to try to argue that book in no way expressed any politcal views.'
I think that in order to interpret what Hayek meant when he said that you have to know a little bit about the history between Keynes and Hayek. Hayek is referring to whatever credit he may have had as an economist in mainstream academia, and I think he discredited himself well before he wrote The Road to Serfdom. Hayek is discussing the intellectual battle he had with Keynes, and I think that politics had little to do with it (despite claims to the contrary by various Austrian economists). Keynes 'defeated' Hayek because he was able to persuade a profession, while Hayek was not (many of those who might have considered themselves Hayekian even by the mid-1930s had switched sides by the late-1930s, including Hicks and Kaldor).
The Road to Serfdom represented a large shift in Hayek's intellectual focus. He had gone from defending this theory of industrial fluctuations and capital theory (concluded with The Pure Theory of Capital) to political science (Road to Serfdom). He had basically bowed out of the discussion, although more realistically Hayek had been pushed out of the debate by the 1940s.
Anyhow, your comment here is largely irrelevant to what I had said. I wasn't discussing mainstream academia during the 1930s and 1940s, I'm discussing academia at George Mason University.
Walter Block's paper slightly exaggerates some observations (such as Hayek's comments on industrial fluctuations and government), but Block may be largely correct. It's also true that Hayek's political views changed over time (along with some economic views). I still don't see how that's relevant to what I wrote, though.
Concerning Hayek's view on anarchism:
We all know that Hayek was no anarchist, but two points are worth making about "Hayekian anarchism." 1. The argument is that the force of Hayek's own analyses point in the direction of a stateless society even if he, himself, didn't take them all the way there. I think this argument is especially relevant when we take into account the ways in which public choice economics has developed in the last few decades and then take seriously the tremendous growth of scholarship on the evolution of rules, norms, and institutions over that same time. Toss in the work of the Ostroms and others on the important role for civil society, which expands the analysis beyond just the state and the market, and you have the ingredients for "Hayekian anarchism," for lack of a better name. (Perhaps "consequentialist anarchism" works better?) 2. There is a story about Hayek from the 1970s that may or may not be apocryphal, and I suspect some of our more senior commenters can verify this, that is relevant here. Supposedly when he was engaged in a conversation about anarchism with a bunch of young libertarian academics (presumably at Menlo Park) in the 1970s, Hayek said something like the following "Look, I'm an old man now and I came to my classical liberalism in a different era, so I can't accept where you all are now. But, if I were a young man today, I suspect I might well be this type of anarchist."
We all know that Hayek was no anarchist, but two points are worth making about "Hayekian anarchism."
1. The argument is that the force of Hayek's own analyses point in the direction of a stateless society even if he, himself, didn't take them all the way there. I think this argument is especially relevant when we take into account the ways in which public choice economics has developed in the last few decades and then take seriously the tremendous growth of scholarship on the evolution of rules, norms, and institutions over that same time. Toss in the work of the Ostroms and others on the important role for civil society, which expands the analysis beyond just the state and the market, and you have the ingredients for "Hayekian anarchism," for lack of a better name. (Perhaps "consequentialist anarchism" works better?)
2. There is a story about Hayek from the 1970s that may or may not be apocryphal, and I suspect some of our more senior commenters can verify this, that is relevant here. Supposedly when he was engaged in a conversation about anarchism with a bunch of young libertarian academics (presumably at Menlo Park) in the 1970s, Hayek said something like the following "Look, I'm an old man now and I came to my classical liberalism in a different era, so I can't accept where you all are now. But, if I were a young man today, I suspect I might well be this type of anarchist."
Jerry O'Driscoll
Steve's post is excellent. I was present when Hayek said something similar to what Steve paraphrases. I took detailed notes on all the conversations we had with Hayek in the summers of 1975 and 1977 in Menlo Park. Copies of the notes and my correspondence with Hayek over the years are on file at the Hoover Institution. Incidentally, at my invitation, Thomas Sowell came over and spoke to the entire group in one of those summers. He presented the essence of what became Knowledge and Decisions.
Steve's post is excellent. I was present when Hayek said something similar to what Steve paraphrases.
I took detailed notes on all the conversations we had with Hayek in the summers of 1975 and 1977 in Menlo Park. Copies of the notes and my correspondence with Hayek over the years are on file at the Hoover Institution.
Incidentally, at my invitation, Thomas Sowell came over and spoke to the entire group in one of those summers. He presented the essence of what became Knowledge and Decisions.
Richard Ebeling
Since two witnesses are better than one, let me say that I, too, recall very clearly that conversation with Hayek in Menlo Park (though to be honest I don't remember whether it was 1975 or 1977). He said, to the best of my memory, after a group of us -- politely -- pressed him on his own arguments about spontaneous order, he said that if he were a young man again he would most likely have his "anarchist phase." Jerry might also recall that a group of us saw him just before we went off to New York in 1975 to do his interview on "Meet the Press." We warned him that we'd be watching, so he better not "leak." Oh, the presumptuousness of youth!!! And if I may add one more thing. And I think that Jerry will also concur with this. If one could have in one's mind the "ideal type" of what you would want a Nobel Laureate to be like, Hayek would perfectly match that ideal. Knowledgeable, wise, and yet, exceptionally modest and even self deprecating in the most charming way. He was always patient with his time in sharing with us his ideas, experiences, stories of that, now, faraway time of the interwar period and his "battles" with Keynes and his other intellectual rivals of the time. And my personal experience was that no matter what question you asked him, and regardless of how many times he may have heard that or a similar question over the years, he treated your asking it as if he was hearing for the first time. Spending that time in Hayek' company, for a part of those two summers of 1975 and 1977 remains one of the highlights of my life.
Since two witnesses are better than one, let me say that I, too, recall very clearly that conversation with Hayek in Menlo Park (though to be honest I don't remember whether it was 1975 or 1977).
He said, to the best of my memory, after a group of us -- politely -- pressed him on his own arguments about spontaneous order, he said that if he were a young man again he would most likely have his "anarchist phase."
Jerry might also recall that a group of us saw him just before we went off to New York in 1975 to do his interview on "Meet the Press." We warned him that we'd be watching, so he better not "leak."
Oh, the presumptuousness of youth!!!
And if I may add one more thing. And I think that Jerry will also concur with this.
If one could have in one's mind the "ideal type" of what you would want a Nobel Laureate to be like, Hayek would perfectly match that ideal.
Knowledgeable, wise, and yet, exceptionally modest and even self deprecating in the most charming way. He was always patient with his time in sharing with us his ideas, experiences, stories of that, now, faraway time of the interwar period and his "battles" with Keynes and his other intellectual rivals of the time.
And my personal experience was that no matter what question you asked him, and regardless of how many times he may have heard that or a similar question over the years, he treated your asking it as if he was hearing for the first time.
Spending that time in Hayek' company, for a part of those two summers of 1975 and 1977 remains one of the highlights of my life.
When I was a beginning grad student at NYU, for me and some others there it was all about being uncompromisingly radical. So Mises and Rothbard were the thing, Hayek was a wimp, and Rizzo and O'Driscoll were...suspect (sorry guys!), I suppose I still considered myself a "Misesian" when I wrote "Praxeology & Understanding" as a second-year grad student. Rothbard liked it so much he invited me over to discuss it and, before the eving was over, to appojt me his official NYU "mole"(!) (I never made a report, though.) In short, although there wasn't yet a Mises Institute (Lew started that a year or so later--as I well remember, 'cause I got one of the first checks on the new MI account), I was the consummate MI type.
Ah, youthful innocence: back then, I also took part in a broadside one issue of which defended NAMBLA, dreamed about dropping a 340 V-eight into my '65 'Cuda, and thought that "awry" was pronounced "ow-ree." The thing is, eventually its time to stop being a child and you discard childish things. I think I must have started that way before I even finished my degree work. Anyway, I now think of all that strident posturing about Mises being The Man and Hayek being a lackey the way I think of spin-the-bottle and armpit farts.
Nor do I suspect that I just wanted mainstream respectability. I don't think I'm any less radical than I ever was. I still prefer Paine to Burke, and still want to 'end the Fed." But at some point I decided that the thing that turned me on most wasn't being a radical but being a scholar. It's about arguing soundly, knowing the facts about stuff, and getting as close to the truth as you can get. Anyway, that's what I now consider "cool."
And from that perspective, a lot of the stuff that goes on at the Mises Institute seems to me to be irredeemably L-7, which is beatnick for "square" (get it?). I don't want to tar the whole MI with this brush, but as for what passes among the insiders there as monetary economics, well, it's just...way uncool. I've written recently about Bagus and Howden's recent piece on free banking--a very typical specimen, by the way. I feel the same about Huerta de Soto's stuff. Walter Block and Bill Barnett are fun guys but jeez: they now want to require 100-percent reserves for _all_ bank deposits, time or demand (give them credit for consistency!). And let him repeat it all he likes, when HHH insists that banks are multiplying titles to the same property, he simply reveals his inability to understand the difference between a title and and IOU. (Does your car company say that some car maker or seller "Promises to pay the bearer one automobile on demand"? No, cause it really is a TITLE, and titles don't say that sort of thing! And how 'bout when this gang says things like, "in a free market, bank reserves would be close if not equal to 100% of their liabilities" as if there weren't OODLES of evidence showing that this just ain't so?
Lean close: I want to whisper a little secret to you. Ready? This kinda crap isn't scholarship. It's theology. It's what happens when a doctrine becomes a defining dogma. If you are a Catholic theologian, no amount of argument or evidence will cause you to admit the absurdity of the Trinity. Likewise, if you are a Rothbardian monetary theorist, which is to say a monetary theorist who writes almost exclusively for MI outlets, no argument or evidence will cause you to admit that the 100-percent reserve position is rubbish.
Now, no one can accuse me of being a GMU crony: so if I say that, whatever the faults of that bunch, notwithstanding some relatively low key, residual Lavoie worshipping, the program has no defining dogmas. You can CRITICIZE Hayek at GMU and still keep your union card. You criticize Mises (or Rothbard) at an MI forum and you are likely to find yourself at the bottom of a pile up. Do I blame this on Lew Rockwell? Not in the least: so far as I'm aware, it isn't MI policy. Instead, it is part of the personally cult that Murray unwittingly brought to Austrian economics. I ought to know, because I once belonged to it.
Selgin: And let him repeat it all he likes, when HHH insists that banks are multiplying titles to the same property, he simply reveals his inability to understand the difference between a title and and IOU. (Does your car company say that some car maker or seller "Promises to pay the bearer one automobile on demand"? No, cause it really is a TITLE, and titles don't say that sort of thing!
So do you think that banks continually lie to their customers when the customers call up and say, "I just want to check my balance, how much money do I currently have in my bank account' and they don't say 'well, we admit we do owe you $100,000 but we've lent out most of it, but don't worry....feel free to come pick up whenever you like, since George and Sam have some cash with us and we dont think they'll be asking us to fulfill our promises to them anytime soon' but rather 'you have $100,000 sir'
Do you think that the average american depositor, even if he is aware that there is risk of 'bank failure' and he is aware that he is 'shielded' to some degree by governmental 'deposit insurance' considers himself to be making loans to the bank of his money?(hey even under pure bailments like warehousing there is a risk that the warehouser will abscond with the goods of which you hold title). Is there a genuine meeting of the minds between banker and typical depositor under the present regime in this regard. Do you have data on this? some kind of survey perhaps?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
And let him repeat it all he likes, when HHH insists that banks are multiplying titles to the same property, he simply reveals his inability to understand the difference between a title and and IOU.
IOU does not grant claim rights to an individual, additional to the original owner at the same time, i.e., does not create the problem of two guys with a claim for exclusive property control. But a title does. A bank that practices FRB creates affairs in which that's precisely what happens, a depositor and a borrower at the same time have a paper which says they are the exclusive owner of the deposited property. Then isn't what the bank issues a title, and not an IOU?
The term "money" in standard usage can mean either money substitutes or base money. The "money" you have in your bank account consists of the latter, that is, of claims to base money. This is all econ 101, by the way.
And if some people are idiotic enough to believe that banks offer them bailment services as a charitable activity, as they would have to do in so far as they don't collect storage fees from depositors, well, I never said there weren't plentry of fools on the planet. But what fools believe and what they are legally entitled to aren't the same thing.
Tell me, since you are so convinced that people generally believe that banks "store" (basic) money: is that what you yourself were inclined to believe? If so, how did you imagine that banks were profiting by doing that? Or are you one of that rare enlightened minority who figured out the great fractional reserve fraud that most people are to dim to perceive?
Show me a copy of a bank deposit contract that refers to the depositor as the owner of deposited property. Go on: I double dare you!. I mean, have you ever read the contract? If not, whose fault is that?