A Thought

This is a passage describing Karen Vaughn’s reaction at one of Ludwig Lachmann’s lectures at the famous Austrian Revival meeting in South Royalton in 1974. This is from her book Austrian Economics in America (great book on the history of Austrian economics, a must read):

Lachmann’s message was radical, but it is not clear that many actually heard it at South Royalton. It was just too foreign to American ways of thinking to be immediately absorbed, except for Kirzner with whom he had a lengthy correspondence and who quickly grasped the challenge Lachmann was offering. For many of the others, Lachmann may as well have been speaking a foreign language.

This passage has a footnote, which is quite interesting, that states:

Perhaps my description of Lachmann’s reception is too much colored by my own recollection of South Royalton. As an assistant professor with standard economic training who was intrigued by the Austrian’s political message but largely ignorant of the specifics of Austrian economic analysis, I found Lachmann to be virtually incomprehensible. He was raising problems and issues that I never considered before or even heard considered by anyone else. I was still grappling with questions of method and technique, of entrepreneurship and competition, and with the larger question of whether the Austrians were crackpots or serious contenders for academic respectability and was not ready to begin to grasp the consequences of subjectivism of expectations and uncertainty. It took me years to appreciate Lachmann’s message.

This passage and its footnote really had me thinking, this might be one more reason why people fail to grasp what Radical Subjectivism is all about or fail to grasp what Lachmann is all about. Lachmann was an economist that really thought ‘outside the box,’ while the majority of the economics profession does not. The majority of the profession are happy enough to work under the assumptions of general equilibrium, rational expectations, and formalism in general, and thus, whenever they hear or read an economist that thinks ‘outside the box,’ like Lachmann, it is looked as incomprehensible, for it raises problems and issues that were never considered in the first place. It takes much time to appreciate the heterodoxy messages, especially for those¬† who were trained in the contemporary theory, or trained to consider the majority of contemporary theory as the way economics is performed.

This is actually quite true in my experiences with reading Lachmann, I still remember reading Capital and It’s Structure for the first time and thinking, “What the hell is this guy talking about!” If you first read Lachmann’s interpretation on capital, without knowing anything about Lachmann, I would assume this is the correct conclusion that one first claims. It actually took me a good amount of time to really grasp the Lachmann message. And I think for this reason, not many people appreciate Lachmann because his message is hard to grasp. One really has to take the time and effort to grasp his applications. But I think, once you understand Lachmann, his way of thinking economics is quite clear.

-Isaac Marmolejo


2 responses to “A Thought

  1. Good stuff… Maybe to further your point, Lachmann is relatively harder to understand compared to Rothbard. A thing that went for Rothbard was the fact that he wrote well and simple, which is why he gets a larger audience, even though he might be intellectually lower than an economist like Lachmann

    • Yes, Lachmann is a hard economist to read but once you understand him, you serious view economics a totally different way. I think the only other economist that has that same effect is George Shackle.

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