Liberty Matters

Economics, Political Economy, and Social Philosophy


I want to thank Adam, Roger, and Steve for reading my original essay and sharing their thoughts and implications of the various arguments on this forum.  We had a high degree of agreement, but we found points where we would emphasize different tensions and trade-offs in the argument.  There is much to learn about advancing the research program of epistemic liberalism within the modern social sciences and humanities. It requires energy, creativity, discipline, and persistence.  All the great cases of academic entrepreneurship that I know of – e.g., James Buchanan and the Virginia school of political economy, and Vincent and Elinor Ostrom and the Bloomington school – exhibit these characteristics, especially persistence even as the odds were stacked against them.  Buchanan's motto from the 1950s onward was, "Dare to Be Different," and as he would put it, excellence is neither preordained nor a fool's errand, but a choice.  Choose to be excellent in your scientific and scholarly pursuits, and don't run with the crowd.  I think this is the message I hope that readers, especially young and aspiring scholars and teachers, get from this forum.
Contemporary Austrian economists have inherited a scientific legacy of excellence in Menger, Böhm-Bawerk, Wieser, Schumpeter, Mises, Hayek, Machlup, Haberler, Morgenstern, and Kirzner.  It is a legacy of scientific achievement and scientific recognition that includes Nobel Prizes, distinguished fellows of scientific societies, prestigious appointments, editorships of leading professional periodicals, and international recognition during their lifetimes and after.  What makes that tradition unique, and what remains underexploited is this focus on how alternative institutional arrangements impact the social learning of actors within the system.  We still need to think through difficult issues of the knowledge assumptions involved and the learning processes explicated in, as Hayek put it, our study within systems and about systems.
I recently finished another round of edits on a forthcoming book dealing with tensions in Hayek. It consists of papers from PhD students across the social sciences, humanities, and law. In my mind this work demonstrates the amazing possibilities for progress in advancing Hayek's ideas on knowledge, the market order, and spontaneous-order theorizing in general.  When you have economists interacting with political scientists, lawyers, philosophers, intellectual historians, anthropologists, and archeologists, and discussing in their unique ways the methodological and analytical implications of Hayek's ideas for their discipline, it is exciting.  This conversation is happening, and that is a sign of progress.  Hopefully, our discussion in this forum will have contributed in a small way to this larger conversation as well.
The title I gave to this final entry is actually the subtitle of my forthcoming book on Hayek, which will be published in the Macmillan series "Great Thinkers in Economics."  The goal of that book is to explain the evolution of Hayek's research program in economics, political economy, and social philosophy throughout his long career and to demonstrate its essential coherence.  As I stated in my original essay here, Hayek did not abandon economics in the wake of his debates with Keynes and the market socialists, but delved deeper into the underlying institutional conditions, challenging the habits of thought that either glossed over those institutional conditions, or disregarded them, and compelling his fellow social thinkers to explicitly account for them -- in terms of the epistemic properties.
Adam Martin's final contribution invoked my old teacher Kenneth Boulding's "After Samuelson Who Needs Smith?" to put forth his own challenge "After Acemoglu Who Needs Hayek?"  It is, for the historian of ideas, a brilliant question. That vast majority of economists today – as at the time that Boulding asked the original question – would answer, "We don't."  Science advances through tombstones, so whatever was scientifically relevant in Smith (Hayek) is embodied in Samuelson (Acemoglu). But that cannot be quite right because otherwise Acemoglu would not have been a scientific advance over Samuelson by rediscovering aspects of Smith-Hayek about institutions and their impact on economic performance through time.  Hayek was the 20th-century Smith – explicitly and implicitly – in that he reached back into the Scottish Enlightenment to draw inspiration for his reconstruction of the liberal project in political economy and social philosophy.  In doing that, as he said repeatedly, he was merely picking up from Smith and Hume and their emphasis on that institutional configuration that would channel human behavior toward realizing the common good through the ordinary behavior of individuals.  What Boulding (and now Martin) want us to see is that writers like Smith and Hayek are part of our "extended present" precisely because the "evolutionary potential" of their ideas has not been exhausted.  We need Smith and Hayek because their ideas still speak to us about fundamental issues of concern for us today that we don't get in reading Samuelson or Acemoglu. This is how the history of ideas can become an important input into contemporary theory development.
It is precisely in Hayek's epistemic institutionalism that this evolutionary potential lies, but it does represent a methodological, analytical, and ideological challenge to prevailing practice that creates its own unique set of difficulties which we all talked about.  Why does methodology matter so much?  Because it impacts not only what is considered the "good questions" to ask of a science, but also what is considered a "good answer."  It ultimately determines not only which ideas are considered legitimate, but which get incorporated into the common knowledge of economists, political economists and social philosophers.  Koppl's dumb/dumb economics, Horwitz's attention to mind and society, and Martin's emphasis on the trade-offs between coherence and flexibility of institutions all demand scholarly attention and pursuit in the details if we are to make advances. It is time that economics, political economy, and social philosophy took this Hayekian turn.