‘Living Economics’ Is Enjoyable Economics
By all accounts, Peter Boettke is exactly what he claims to be in Living Economics—a lover not just of economics but also of teaching economics. This book mixes together Boettke’s personal thirst for understanding, his admiration of the great minds and ideas that have influenced him, his appreciation for intellectual challenges to his own beliefs, his desire to guide budding economists toward enlightenment, and his eagerness to attack misguided elements of mainstream economics and economics pedagogy.
The book begins with a caustic indictment of Keynesianism. Shrugging off the recent revivalism of Keynes, Boettke writes, “John Maynard Keynes was wrong in both his analysis of capitalist instability and reasons for persistent unemployment in 1936, and he was wrong in 2008.” Lest there be any doubt about where he stands, Boettke continues, “Keynesian economics is simply bad economics.” This opening is certainly meant to provoke, and it hints at an exciting intellectual fight for these troubled economic times. But this book is not meant to, and does not, deliver that fight in full; the strong words about Keynesianism are a teaser in an opening essay introducing a “main line” of economics that forms Boettke’s foundation of true economic understanding.
This introductory chapter leads into a section on the difficulty of getting people—students, voters, policy-makers, and fellow economists alike—to understand and appreciate good economics and public policy. The most developed argument, though, is over pedagogy, for today’s students will become tomorrow’s economists and policy-makers. Boettke vilifies the almost exclusive emphasis of most economics programs on models with idealized assumptions like perfect knowledge and competition. These leave the mistaken impression that competitive markets, if they ever exist in the real world, are hopelessly brittle, and that the slightest imperfections require government correction if markets are to serve the interests of humanity.
In fact, highly imperfect markets can be robust and adaptive, while government action is what often proves brittle or even counter-productive. This essential claim is at the very core of the Austrian school of economics. In Boettke’s view, the effective push-back against a century-long trend of misguided government interventions into economic activity depends on teaching these insights and arguments to young open minds.
Part II of Living Economics might be viewed as something of a guided tour of thinkers appropriate for an educational program—thirteen chapters covering thirteen scholars Boettke personally reveres for laying out insights fundamental to a proper understanding of economics. Anyone familiar with Austrian economics will recognize the names—Mises, Hayek, Rothbard, Kirzner, the Ostroms, Buchanan, Tullock, etc.—and themes—the importance of institutions, the role of prices, the function of profit and entrepreneurship, the adaptability of the market, the primacy of freedom and voluntary exchange, the role of self-interest in political activity, etc. But they will likely find something new to enjoy in every chapter. Those unfamiliar with Austrian economics will find much to engage with.
Boettke eschews the well-trod Austrian-school recitatives and encomia in favor of new glosses, infused with the palpable joy of his own personal intellectual enlightenment. In a chapter on Murray Rothbard, Boettke focuses on Rothbard’s writings on the Soviet economy. This is not among the first topics you hear about from Rothbardians, and outside that circle, Rothbard’s Soviet scholarship is a “forgotten contribution.” But Boettke, who wrote on the Soviet economy early in his career, has an uncommon appreciation for Rothbard’s contribution, which “anticipated the advances of the field that would occur some 20 years later.” (p. 90). Boettke’s desire to resurrect forgotten contributions of a scholar he admires might serve as a reminder that intellectual curiosity and learning sometimes result not just from a preference for deep thought but also from emotional responses to the high quality of others’ works.
Another example is a chapter on the sociologist Peter Berger, who, like Hayek, cautioned against imposing the posture and methods of the natural sciences on sociology. The normal Austrian-school move would be to pile on attacks against over-mathematization of economics. But Boettke judiciously passes on the opportunity (though he returns to it in Part III), in favor of a more personal inquiry. “I want to see how . . . one offers an invitation to others to study man in various walks of life and social situations. . . . The invitation to study promises enlightenment, but it also contains a warning of the limits. This is what I want to explore.” This exploration of how to span methodological divides suggests that Boettke is aware of the need, and is willing to make the effort, to return Austrian economics from its (partially self-imposed) exile from mainstream economics. Indeed, early in the book, Boettke urges Austrian-school graduate students to seek out intellectually un-comfortable places. Later, he shows he has assimilated critical insights of non-Austrian-school thinkers. And throughout, he mostly avoids the insular diction of the Austrian school—“praxeology,” “methodological apriorism,” and other shibboleths are mercifully rare.
If indeed Boettke is striving for greater influence and appreciation of Austrian economics outside the circle of Austrian economists, then part of that effort must also be respectful but vocal challenges to mainstream economics. Thus, Part III returns to the critical themes opening the book. Here, Boettke does forge into some of the quagmires skirted elsewhere, like bewailing the math-y-ness of modern economics, and occasionally lapsing into prose potentially more dense and turgid than the casual reader would prefer. But for the most part, he weaves together a highly readable larger story about the evolution of economics from a field in which the “main line” insights occupied a mainstream position into a field that has lost its way, where complicated macro models substitute for actual understanding, where the selected-for traits in admissions and tenure decisions perpetuate these methodological blinders, and where economists regularly lead policy makers astray.
The book is, of course, not without faults. While it is not a mere collection of unrelated essays, the book could have benefited from more ambitious editing, aimed at creating more continuity, reducing repetition of quotes and points, unifying the piecemeal treatment of James Buchanan’s ideas into a more cogent narrative, and doing something with the substantively and stylistically out-of-place essay “Was Mises Right?”
Another criticism returns us to the book’s opening shot at Keynes. Keynes is, rightly or wrongly, squarely within the “main line” of economic thinking for most economists, including Kenneth Boulding, the economist from whom Boettke borrows the very idea of a “main line.” If Boettke wishes to engage non-Austrian-school students, then opening with harsh statements about Keynes seems counter-productive, more likely to put off such readers than draw them in. Which brings up an important question every reviewer must ask: Who will enjoy, and who should read, this book?
It would be a lost opportunity if the readership of Living Economics is limited to Boettke’s intellectual fellow-travelers. Living Economics should not be read primarily as an Austrian-school salvo against non-Austrian economists, but instead as an invitation to enjoy economics, to appreciate “the economic way of thinking,” and to teach it properly to young people. Regardless of ideology, those who love economics and the personal nature of intellectual endeavor will enjoy this book, even if they spend some of their time shaking their heads in disagreement. Those seeking to introduce themselves to the “economic way of thinking” will encounter many useful strands of thought, along with launching points for further learning. Whatever the motivation of readers, Boettke will cause them to think more critically. And one benefit of the collection-of-essays approach is that a casual reader can sit down to read any single chapter, to take away what he will, without feeling compelled to read what goes before or what comes after.
Boettke ends Living Economics by returning to education. He calls for a conscious and judicious reconsideration by instructors of what are the true, lasting, and fundamental insights of economic inquiry that ought to be imparted to willing minds. It is on this issue that his love of economics and teaching economics lend added power to his substantive intellectual message. And it is hard not to hope Boettke finds success in his endeavor to change the world through the spread of important ideas to young minds.
Robert Sarvis is an MA Fellow at the Mercatus Center at George Mason University.