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Economic Schools of Thought

Posted By George Selgin On February 10, 2014 @ 11:23 pm In Economic Thought,Free Banking | 50 Comments

At the close of my last post here, I referred to myself as a "non-Austrian," causing one of our regular commentators to wonder why. "Because," I answered, "belonging means conforming."

That admittedly cryptic reply (I was anxious to get back to the book I was reading) led to speculation to the effect that I was inclined to identify "Austrian" economics with the economics of Murray Rothbard, and particularly with his and his devotees' opposition to fractional reserve banking.

But although it's true that I have a low opinion of the ideas and arguments put forward by the 100-percent crowd, and that I'd rather swallow a dozen toads than have anyone confuse my thinking with theirs, I don't believe they've yet succeeded, despite trying their damnedest, in hijacking the "Austrian" brand name. There are, thank goodness, still plenty of non-Rothbardian "Austrians," including my fellow blogger and former colleague and mentor Larry White. But though there is no such radical difference–and in some cases hardly any difference at all–between my views and those of such non-Rothbardian Austrians, I wouldn't consider myself an Austrian even if they were the only self-styled Austrians around. My reason has nothing to do with any particular "Austrian" belief to which I object. I don't consider myself an Austrian economist for the same reason that I don't consider myself a Chicago economist, or a Keynesian economist, or a New Classical economist, or a–well, you get the point. I don't want to belong to any economic school of thought, or to "do" any sort of economics. I just want to "do" my own sort of economics.

And what sort of economics is that? I can't tell you–I've never thought much about it. But perhaps that's just it: I don't "think" about writing any "sort" of economics. I don't want to have to think about whether what I'm up to qualifies as "praxeology" or not, or whether Mises would mind my using terms like "money" and "inflation" the way most contemporary economists use them, instead of the way Mises himself used them a century ago. Nor am I any more inclined to trouble myself over whether my work fits neatly into any other economic school's pigeonhole. I don't worry about not having a "model," meaning a bunch of equations, when I'm perfectly confident that I can say what I need to say in plain English. (I rather wish that other economists both appreciated the power of plain English, and knew how to make proper use of it.) But if there's one thing I truly believe concerning the "methodology" of economics, it's that thinking about it is as helpful to actually doing economics as contemplating one's steps is to dancing the rumba. In short, having to look over my shoulder while I think or write, at any methodological strictures at all, cramps my style.

I can't imagine, on the other hand, what it could possibly mean for me to declare myself an Austrian (or a Chicagoan, or a Keynesian…) unless it means precisely that when I think or write about economics I seek while doing so to abide as much as possible by what I consider to be the distinguishing maxims of the Austrian (or Chicagoan or Keynesian…) approach. That is what I meant when I said that "belonging is conforming." And though I suppose some will take issue with this–that they will insist that being "Austrian" is not so strict a matter as all that–I can only observe in return that they might wish to consider what it would mean–no, what it has already meant–to have that label bandied about by every other anti-government nitwit. No sir: a school of thought had better insist upon its defining tenets, or risk becoming a laughing stock.

Does this mean that I think schools of economic thought entirely useless, except perhaps as convenient labels to be used by historians of the discipline after the fact? Not quite. For while I hold self-conscious devotion to any school of thought to amount to putting blinkers on one's brain, I can't deny that such devotion brings offsetting, psychological advantages. The academy is no bed of roses, especially for young faculty; and having the moral support of an organized body of like-minded peers can help a lot. What's more, it can be lots of fun. The alternative is…well, it can get pretty darn lonely.

And that, I suppose, is why, despite everything, I don't really mind being called an Austrian. That at least makes one school whose parties I don't have to crash.


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