Roger Koppl on Modern Austrian Economics

Continuing on from themes raised in the last post, I was struck by an insightful comment by Roger Koppl here on Rizzo’s ThinkMarkets post (“Yes, Paul: It is Hayek versus Keynes,” December 7, 2011). The comment is here (slightly edited):

“[sc. Austrians] ... need to deal with the epistemic Keynes that Shackle so rightly emphasized. But the thing is that we have and we do! The O’Driscoll & Rizzo volume certainly does that. My Big Players work with Butos, Yeager, and others is all about engaging the epistemic Keynes as was my HOPE [sc. History of Political Economy] article with Butos on Hayek vs. Keynes. And the Post Keynesian responded [quite] ... a bit to that HOPE article. Butos and I got several published comments from Post Keynesians and responded to them. Steve Horwitz pointed out ... over at Coordinationproblem that this year’s SDAE best-paper prize went to Dave Prychitko’s paper on Minsky, a Post Keynesian. My recent RAE paper with Will Luther addresses Minsky and animal spirits. And so on. If you re-read Karen Vaughn’s book on “Austrian Economics in America,” you will see that it is a story about how, basically, Lachmann won the day. Lachmann taught us that we need to deal with the epistemic Keynes and we got the lesson. It was a huge change in the American branch of Austrian economics. ...”

Roger Koppl @December 8, 2011 at 8:09 am, ThinkMarkets

Both Karen Vaughn and Ludwig Lachmann rate highly on my list of Austrians. Indeed, of all the Austrians, Lachmann’s work is the most congenial (as it were) to Post Keynesians. The issues of radical uncertainty and subjective expectations, and how they influence the level of investment are at the heart of Post Keynesian economics and were also taken seriously by Lachmann. Roger Koppl has put his finger on the problem that modern Austrian economics has from the Post Keynesian perspective.

Roger Koppl refers to recent Austrian literature worth reading:

Butos, W. N. and R. Koppl, 1997. “The Varieties of Subjectivism: Keynes and Hayek on Expectations,” History of Political Economy 29.2: 327–359.

Koppl, R. and J. B. Rosser, 2002. “All That I Have to Say has Already Crossed Your Mind,” Metroeconomica 53.4: 339-360.

Koppl, R. and W. J. Luther, 2011. “Hayek, Keynes, and Modern Macroeconomics,” Review of Austrian Economics (July): 1-19.
This paper can also be downloaded through the Social Science Research Network (SSRN).

Prychitko, David L. 2010. “Competing Explanations of the Minsky Moment: The Financial Instability Hypothesis in Light of Austrian Theory,” Review of Austrian Economics 23: 199-221.

I am currently reading these and hope to comment on them soon.