Liberty Matters

Lachmann and his Followers on the Nature of Subjectivism: From Method to Ontology, and the Catalysis of Empirical Work

I'd like to elaborate on an interesting and insightful remark made by Peter Lewin in his post "Understanding Lachmann Heterogeneously" and connect it to a theme raised by Hans Eicholz, namely, the nature of subjectivism. Lewin refers to "Don Lavoie, whose view of Lachmann was much more extensively based on his understanding of continental philosophy." Lewin is referring here, I think, to the way in which Lavoie interpreted Lachmann's work through the lens provided by philosophical hermeneutics, perhaps most notably the work of Hans-Georg Gadamer ([1975] 1993), in order to develop a distinctive—and, I shall argue, extremely fruitful—interpretation of the nature of subjectivism.
In essence, what Lavoie was trying to do was to encourage people to re-conceptualize subjectivism. The traditional conception of subjectivism, or verstehen, that informed the human sciences in the late 19th and early 20th centuries was as a specialized social scientific method that hinged on the ability of expert scholars empathetically to grasp the meanings people attributed to their circumstances and actions. In contrast, philosophical hermeneutics suggested that interpretive understanding is something that normal people accomplish with considerable success in everyday life. On this latter view, rather than being thought of in epistemic terms as a technique for studying human activity that is the exclusive preserve of specialist social scientists, verstehen is understood ontologically as an account of human nature; people are interpretive beings, who manage to understand one another very well in their everyday lives even without specialist training. (Lavoie 1991, 1994a, 1994b: 59-60; also see Prychitko 1994: 311-12 and Lewis 2011) The reason they are able to do so harks back to a point made by Lachmann in The Legacy of Max Weber and highlighted in my first contribution to this discussion, namely, that people are social beings whose interpretations of the world are shaped by shared social rules. And it is the fact that the inhabitants of a given society typically interpret the world using the same—or, at least, very similar—interpretive frameworks that makes it so easy for them to understand one another so much of the time.
The interpretation of subjectivism developed by Lavoie has had another important implication, which has turned out to be significant for recent work in Austrian economics, for it suggests that meaning, rather than being hidden in people's minds, to be identified only through mysterious acts of empathy, is in fact publicly accessible (though observations of people's actions, archival documents, etc.). This line of thinking encouraged—and was explicitly designed to encourage—Austrians to do empirical work and has led to a stream of fine qualitative studies that explore how the shared interpretive rules and patterns of meaning, or "culture," within which people are embedded affect their behaviour in both market and nonmarket settings, thereby shaping the kinds of outcomes that emerge. (See, for example, Chamlee-Wright 2002, 2011; Chamlee-Wright and Storr 2009, 2011; Storr 2004.) In this way, as a very interesting recent essay has suggested, Lachmann has exerted considerable—albeit, one might add, sometimes indirect—influence over applied work in contemporary Austrian economics. (Storr 2018).