Cultonomics and the Austrian School

Originally posted on July 31, 2014

Mainstream economists have long derided the Austrian School as a “cult”. Professor Walter Block recounts stories from Nobelists Gary Becker and James Buchanan off-handedly referring to the cultish Austrians. When pressed by Professor Block, Becker said, “By a cult I mean a small number of dedicated followers who speak mainly to each other, and interact little with let us call them mainstream economists.”

Nobelist Paul Krugman just last week gloated over Noah Smith’s attacks on the “hermetic system that is Austrians”. And onMonday, Krugman once again lambasted the Austrians as “as the floating crap game — the same 30 or 40 people meeting in conferences all over the world, reading and citing each others’ work”.

Oh wait. He was actually talking about mainstream economists. Here’s the full quote:

And modern academic economics is very much an interlocking set of old-boy networks; to some extent this has become even more true since the decline of the journals, with most discourse taking place via working papers long before formal publication. I used to refer to the international trade circuit as the floating crap game — the same 30 or 40 people meeting in conferences all over the world, reading and citing each others’ work; it’s the same in each sub-field. And to some extent it’s inevitable: there’s so much stuff out there, and you have to filter somehow, so you mainly read stuff by people you know and people they tell you are worth reading.

In other words, every field in economics has a “small number of dedicated followers who speak mainly to each other, and interact little with [the rest of] mainstream economists,” and it’s not a feature unique to proponents of the Austrian School. It is also probably the case that Austrians do the most out-of-field interaction with other mainstream economists. Because if an Austrian wishes to get hired at a mainstream institution, he must to some extent be published in mainstream journals; and to get published in mainstream journals, one has to be familiar with the mainstream literature. So in addition to publishing for and citing each other, Austrians must be active within the mainstream to some extent in order to be employable.

But as Walter Block points out above, this is often a very difficult task for the Austrian. When the mainstream doesn’t consider your work proper economics (as was the case with Hayek at Chicago), or will not let you respond to direct attacks against you (as was the case with Block and Professor Guido Hulsmann when trying to respond to Bryan Caplan’s article Why I am not an Austrian in the Southern Economic Journal: for more on this, see Walter Block’s article linked to above), or dismisses your point of view as “cultish” out of hand, then finding an editor willing to publish your work is exceedingly rare.

Of course, there is one mainstream that Austrians do freely engage in, and that is the mainstream public. Through the use of blogs, videos, popular books, and public events, Austrians are engaging the masses in a very visible way. And the good news is we are gaining traction. The reason for this success isn’t because of our constantly glorifying and deifying our supposedly unimpeachable “leaders”–it’s because our arguments make sense and resonate with regular people, and those people feel compelled to share their new insights with their friends and family.

And as Austrian arguments become more “mainstream”, they become more important in the intellectual discourse of the day, and therefore are more likely to attract the attention of journal editors interested in publishing relevant and topical (and, of course, good) papers.

Austrian economics is gaining more recognition and acceptance every day. And it’s not because it’s a hermetic cult, closed to the outside world. But rather the opposite–because it throws itself out there, and actively endeavours to engage with the public, academic and otherwise.

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