Austrian Economics: Tensions and New Directions.

• Author: Rothbard, Murray N.

This volume is Hamlet without the prince. As Lawrence H. White points out in his perceptive, if necessarily brief, afterword to the book, of the eighteen papers and comments assessing contemporary Austrian economics, only two (White and Israel M. Kirzner) are by Austrians. The result is not very helpful to the reader interested in finding out more about this little-known, if rising, school of modern economic thought. Perhaps as a consequence of this curious editorial judgment, the authors are largely unfamiliar with current developments in Austrian economics, and so ignore its rich content and debates in such areas as monetary and banking theory, business cycles, capital and interest theory, monopoly and competition, public finance, welfare economics, theory of government and government intervention, law, the economics of socialism, history of economic thought and economic history. Thus, as White notes with some astonishment, Alan Hamlin laboriously tries to reinvent the wheel and arrive at an "Austrian welfare economics" while apparently possessing no knowledge of the already existing substantial contributions to that field.

Presumably as a consequence of the unfamiliarity of the authors with the content of modern Austrian economics, the papers deal almost exclusively with that old saw: methodology. While methodology is assuredly important and the Austrian contribution has always been distinctive, exclusive concentration on what should only be a gloss on the actual content of a discipline can only be considered, by even the most philosophically-minded readers, as an arid waste of time.

Even on methodology, this volume is unsatisfactory. There are three distinctive and often clashing paradigms within modern Austrian economics: Misesian praxeology; the Hayek-Kirzner emphasis on the market as transmission of knowledge and coordination of plans--rather than the Misesian emphasis on continuing coordination of prices; and the ultra-subjectivism of Lachmann, which amounts to a virtual abandonment of economic theory. Of the three, praxeology is almost totally ignored, and by conscious decision of the editors, even though it dominates the only scholarly journal in the field (The Review of Austrian Economics). One possible reason for this imbalance, is that of the eighteen contributors, only five are from the United States, which since World War II has been the locus of the Misesian approach.

It is not surprising that one of the few valuable...