*The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas*

That is the new and very interesting forthcoming book by Janek Wasserman, focusing on the history of the Austrian school of economics and due out in September.  A few comments:

1. It is the best overall history of the Austrian school.

2. It is in some early places too wordy, though perhaps that is necessary for the uninitiated.

3. I don’t think actual “Austrian school members” will learn much economics from it, though it has plenty of useful historical detail, far more than any other comparable book.  And much of it is interesting, not just: “Adolph Wagner and Albert Schaeffler taught in the Austrian capital in the 1860s and early 1870s, but quarrels with fellow incumbent Lorenz von Stein led to their departure.”

4. Even a full decade after its release in 1871, Menger’s Principles was not achieving much attention outside of Vienna.

5. The early Austrians favored progressive taxation and fairly standard Continental approaches to government spending.

6. The Austrian school of those earlier times was in danger of disappearing, as Boehm-Bawerk was working in government and the number of “Austrian students” was drying up, circa 1905.

7. The very first articles of Mises were empirical, and covered factory legislation, labor law, and welfare programs.

8. Wieser and some of the others lost status with the fall of the Dual Monarchy after WWI; Wieser for instance no longer had a House of Lords membership.  Schumpeter and Mises responded to these changes by writing more for a broader public, often through newspapers (not blogs).  Mises’s market-oriented views seemed to stem from this time.

9. Hayek in fact struggled in high school, though his grandfather had gone on Alpine hikes with Boehm-Bawerk.

10. The Lieder of the original Mises circle were patterned after the poems of Karl Kraus, and one of them mentioned spaghetti and risotto.

11. Much of this book is strong evidence for the “small group” theory of social change.

12. The patron institution for Hayek’s business cycle research of 1927 to 1931 was partly sponsored by the Rockefeller Foundation.

13. By the mid-1930s, Mises, Tinbergen, Koopmans, and Nurkse were all living in Geneva.  There was a Vienna drinking song saying farewell to Mises.

14. I wonder how these guys would have looked as Emergent Ventures applicants.  [“We’re going to run away from the Nazis and recreate anew our whole school of thought in America, with thick Austrian accents…and with a night school class at NYU to boot.”]

15. The Austrian school eventually was reborn in the United States, which accounts for many more chapters in this book, some of them concerned with the ties between the Austrian school and libertarianism.  There are some outright errors of fact in this section of the book, sometimes involving matters I was involved with personally (and which are non-controversial, not a question of “taking sides”).  I think also the latter parts of the book do not quite grasp the extensive influence of the Austrian school on America, extending up through the current day, and covering such diverse areas as regulatory policy and tech and crypto.

Nonetheless, recommended as an important contribution to the history of economic thought.


Note to self: check to see if blogs were available in the 1920's. Right over my head with this one.

I'm curious if the fact that the latter parts of the book has errors that Tyler personally knows about affects his view of the quality of rest of the book? I often read articles or books that appear to be authoritative and well-reseached, but which are marred by serious misstatements of fact or gross omissions in areas about which I'm expert. It makes me doubt the other sections, which had appeared convincing up until I recognized the errors. Overall that author becomes much less able to convince me of anything.

As a follow-up, given these errors, how many "stars" would Tyler give the book?

The fact that Tyler "recommended" the book rather than it being "self-recommended" is Straussian. Is it left Straussian or right Straussian?

10. The Austrian school had its own songs? Do all schools of economics have songs? How about the Chicago school (You can never get something for nothing); Virginia school (I fought the law and the law won); keep this going.

Sasha Volokh wrote Hayek songs over 20 years ago...


These clowns contributed to the hollowing out of America's middle and working classes. A pity their foolish ideas didn't stay on their side of the globe.


These risotto eaters read poetry to each other. No wonder they couldn't come up with a good economic system that benefits the common man.

Lol have you actually read Mises works and history? I'm guessing not and just typing out bullshit

so...what were the outright errors?

"Hayek in fact struggled in high school, though his grandfather had gone on Alpine hikes with Boehm-Bawerk."

Yes, I guffawed at that too.

Even President Captain Bolsonaro can't make sense of that statement

It's not funny.


"Mainstream economists have argued that modern-day Austrian economists are excessively averse to the use of mathematics and statistics in economics."

"Critics generally argue that Austrian economics lacks scientific rigor and rejects scientific methods and the use of empirical data in modelling economic behavior. Some economists describe Austrian methodology as being a priori or non-empirical."

Great. So they hate math, science, data, models, and evidence. No wonder this blog is crawling with anti-vaxxers and climate change denialists.

Computer models are all the main supports for Climate Hoaxers' and "non-Austrian" ideologue economists' agendas. Desired assumptions, favored estimates, ideological forecasts, etc. in, narrative out. Then, the only data they recognize are that which advance the narrative. So, it means less than nothing that they never get anything correct or that they don't know correlation is not causation.

"Unexpectedly" is the most common word used in reports concerning collisions of climate hypotheses/theories with REALTY.

Right, let's have Jerry Falwell Jr. reason from first principles whether GW is even possible. Who needs computers. Or any data.

Of course, GW and glaciations exist. In the past million years, there were four glaciations and massive global warmings, the most recent 100,000 years ago, and none were produced by man. Also, think Sun cycles.

Who needs computers, or any data? The climate hucksters do. Reading comprehension deficit: I can set up a computer model with my assumptions, my forecasts, my estimates to sell any effing thing. And, surpluses of Young Einsteins that don't know how to critically think.

When did higher education die? I need it for the head stone.

If you start down the "data can mean anything" road, you end up where anyone can claim anything, including:


Not an argument.

Much better a pastor than the first Progressive-in-chief (Woodrow Wilson) declaring:

Remember that God ordained that I should be the next president of the United States.

...leading to the most recent Progressive-in-chief with a messiah complex.

The most recent -in-chief is not at all Progressive. Yes he thinks he's the messiah. And a very stable genius.

I think there is pretty good evidence that fossil fuels have increased the rate of global warming over the last 70 years.

But yes, to your point, there are plenty of pre-Ice age periods that are substantially hotter than today. Indeed, it's likely that man-made global warming has just ensured the end of the Ice Age.

Indeed, we are clearly in a warming peak of the Ice age and previous peaks have routinely been hotter than the average global temperature today.

The peak 125K years ago was roughly 10C hotter than the average today. If there was going to be an intelligent discussion of Global Warming then that kind of context would be common. Instead, the whole process has become politicized.

Oh, related:

"They informed me that they didn't think their vision of a think tank was in the science business, and so I said, 'OK, bye.’ There had been some controversy going around the building for some time, so things got to a situation where they didn't work out."


I think you're missing a critical point here: To far too many people, "science" and "math" (or more specifically "statistics") have become synonymous.

The reality is that science uses math as a tool--but IS NOT, IN ANY WAY limited to math. Good scientific work can be conducted without a single equation--evidence-based, rigorous work. For example, the description of a new species. A soil boring. A geological cross section (yes, you can use computers to build them, but any geologist knows you need to adjust the results, for reasons that are obvious if you understand the equations). How do you apply statistics to a singleton in the fossil record? You have a dataset of ONE; modern math can't handle that.

Not even all scientific laws (a loose term, but one generally accepted) are mathematical in nature. While the principles of stratigraphy can be expressed mathematically, they generally aren't, nor are they considered that way in the field. No one writes an equation to determine the first rock laid down, we reason it out (and on, reason=/=math).

As for statistics, I would point out that numerous times in scientific history people thought that a new branch of math was the be-all, end-all of math, and that anything not using that branch was unscientific. Trigonometry once held that crown, for example. In pretty much every case that branch of math was later dethroned and placed in its proper perspective: Useful, often tremendously so, but a tool, not the only way to look at a problem. I have yet to see any evidence that would suggest statistics--of any flavor--is any different. The language in which people discuss statistics is even the same as the way they discussed trig back in its hayday.

Math isn't what makes something scientific. Data are. And data ARE NOT math. Mathematical equations are models, nothing more. Some are extremely good models--so good that to fail to consider them true is perverse. But they ARE NOT data. Data are real-world observations, upon which mathematical models can (but do not have to be) built.

In short, it's entirely possible to have a valid scientific study--even an entire field of study--that simply doesn't use much math. The fact that the Austrians don't like the current economic mathematical schemes, and are hesitant to use that particular tool, in no way demonstrates that they are unscientific or averse to data. It doesn't mean they are, either--I'll gladly concede that point. But this line of reasoning would throw whole fields generally accepted as science out the window with it, and limit science to an absurd and dangerous degree.

Thoughtful post.

Cowen: "I think also the latter parts of the book do not quite grasp the extensive influence of the Austrian school on America, extending up through the current day, and covering such diverse areas as regulatory policy and tech and crypto." Yes and no.

Regulatory retrenchment has more to do with the rise of right-wing populism than acceptance of libertarian ideology: Trump has given the fox the keys to henhouse not out of some commitment to libertarianism but to line his pockets and those of his cronies. Tech and crypo certainly have created lots of disruption, but to what end? Give the Austrians their due for developing an ideology that seemingly complements right-wing populism.

But the Austrians have failed to influence what is at the center of today's economic policy: rising asset prices as the path to prosperity. Indeed, the Fed cowered when Trump threatened the Fed's independence if the Fed continued a monetary policy that might reign in rising asset prices. Austrian economics is often ridiculed as depression economics. I would characterize it as true market economics: reliance on markets as the path not only to prosperity but order and stability. Markets can be harsh, harsh like a strict parent to an unruly child. Better to teach the child the harsh lessons early than to allow him to follow what appears to be an easy path only for him to discover it's the path to ruin.

You are incorrigible, rayward. But I will offer this connection from your line:

"Regulatory retrenchment has more to do with the rise of right-wing populism than acceptance of libertarian ideology"

To this from above:

"Critics generally argue that Austrian economics lacks scientific rigor and rejects scientific methods and the use of empirical data in modelling economic behavior. Some economists describe Austrian methodology as being a priori or non-empirical."

What's the difference between populism and any other ideology? Aren't all of them a priori or non-empirical, and isn't that the problem? Fancy or not, the -ologies are reasoned from imagined worlds, and not grounded in this (let alone with real-world feedback).

We need a bit more empiricism.

After we finished Royal Taylor’s the Contrast, I started to overhear Hadyn’s String Quarterts and Mozart’s Piano Concertos from Tom’s earphones.
“What’s with the classical music,” I said, one morning in our common room, whisking two eggs.
“It’s practically my mother tongue,” he said.
“What do you think it meant to the founders?” I asked.
He took off his backpack, sat down and began retying his shoe—Tom had hiking shoes so worn that feathers fell out from the holes. I poured a glass of milk and turned the stove on low.
“I think three things: goodness, passion and intuition. You know what though?”
“What?” I asked.
He rocked back in his chair. “I think Jefferson would have been disappointed.”
I poured the eggs in the skillet.
“It’s not ancient.”
I pressed the foam with my spatula. “Ancient.”
“Like the pyramids.”

“I always thought the trees wavering, the leaves blowing, the grass. It was enough.”
“You ever see a shadow lengthen to a perfect point?”
“One foul swoop,” I said.
“Right,” he said.
“The tip of the sword!” I exclaimed.
Tom just looked at me with his lids half open. He was looking above, at nothing in particular. I'd become matter, a sandstorm of history in the eyes of the beholder. He was looking up some second entry.

“the extensive influence of the Austrian school on America, extending up through the current day, and covering such diverse areas as regulatory policy”

So I can’t understand how something so not Austrian as the risk weighted capital requirements for banks, which both for the economy and for the bank system dangerously distorts the allocation of credit has been so ignored by American Austrians


Because the current American Austrians are intellectually very limited. The GMU-led group of Austrians runs a scholastic camp on what Hayek said and what Mises really meant over and over. And the new PhDs they produced over the years and placed in other universities now do the same. Some of them went into rational choice sociology instead. The Mises Institute Austrians are Fed-obsessed, and more concerned with libertarianism/anarchism than economics.

Any mention of the spectacular babes that surrounded people like von Mises? His wife Margit and step-daughter Gitta Sereny were notable in their own right.

Gitta Sereny wrote a good book on Speer. She won multiple awards mostly for that book and her journalism. CBE. And died at 91 about 6 years ago. She crossed swords with that pro-Hitler snake David Irving too. A life well lived ...

President Captain Bolsonaro is known to have left TWO wives to marry others, once again Brazilians are superior.

It is different. His first wife turned against him.

And by different I mean double. Two wives left not just one. The greatness of Brazil!

1 - Stop impersonating me.
2 - I already said his first wife turned against him. He had to mobilize one of his sons to run against her to take her town council seat.

1 - You stop impersonating ME
2- Hayek's first wife turned against him. Meanwhile President Captain Bolsonaro left TWO wives, the first one but also the second who never turned against him. Brazil shows once again how to lead in another category. Trump and Bolsonaro both left 2 wives.

I can assure both wives turned against him.

Of course you would turn against your husband if he left you too. So it comes down to simply this. Bolsonaro left two wives, Hayek left one. Brazil wins, again!

It is not like that!!! President Captain Bolsonaro used his influence to elect his first wife. Ungratefully, she refused to follow his leadership and vote his way. How sharper than a serpent's tooth it is
To have a thankless spouse! They quarreled a lot.
His second wife turned against him. She begun to lie about President Captain Bolsonaro, to say he looted their joint account, that he was corrupt, that he was a violent man. Afterwards, she recanted. Being a liar is wrong.

Of course, Hayek's first wife did far more awful things to him. So again, Brazil leads, two left wives to one.

No, she didn't. Hayek
left her to marry his cousin!!

Did Tyler Cowen ever review Guido Hülsmann's biography: "Mises: The Last Knight of Liberalism?"


Sorry, I can't help it. My BA was in Modern Languages.

I'm a big fan of Menger, and think Mises made some insightful critiques of socialism and interventionism. Mises' criticism of autarky leading to war is worth reading today. But Mises was explicit in his early chapters of Human Action that he was anti-empiricism, and incorrectly claimed that his version of economics could be built on "a priori" grounds. In other words, he was infected by Kant. So at least in the case of Mises, the anti empiricism was loud and proud. And subsequently appealed to many of his American followers, some of whom adopted the same stance.

You might want to check out "The Austrian School of Economics: A History of Its Ideas, Ambassadors, and Institutions," by Herbert Unterköfler & Eugen Maria Schulak, trans. Arlene Oost-Zinner


We figured once the world was shut as a circle — when investigation moved from Western Europe and had moved over the sea — after that minute it was inconceivable for anybody would get in by the criteria we set up

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