Lachmann’s Austrian Themes for The Austrian Revival

As Karen Vaughn states, Lachmann is the one who sounds the tune  around which the rest of the orchestra was tune to. In other words, Lachmann is the Austrian that sets the themes in place and the rest of the Austrian circle seeks to describe and interpret those different Austrian themes. Austrians take Lachmann for granted, without him, the Austrian school would have, without a doubt, been nothing more than a complementary theory to the neoclassical theory. While there are some Austrians that think of Austrian theory as the gap filler for neoclassical economic theory, there is still that radical wing that holds true to Austrian principles and think of Austrian theory as an alternative to neoclassical theory. Without Lachmann, the latter would have been highly unlikely to establish.  Lachmann was a key person in the Austrian revival movement from the 1970’s, I wonder why modern Austrians now straw man him and consider him nothing more than an Austrian with Keynesian sympathies. Nevertheless, here are the three key themes he set for Austrians in an Austrian conference in 1976, later his themes were published in an essay, An Austrian Stocktaking*:

1) The first, and most prominent, feature of Austrian economics is a radical subjectivism, today no longer confined to human preferences but extended to expectations…

2) Time is the dimension to all change. It is impossible for time to elapse without the constellation of knowledge changing. But knowledge shapes action, and action shapes the observable human world. Hence, it is impossible for us to predict any future state of this world.

3) The third feature of Austrian economics… is a distrust of all those formalizations of economic experience that do not have an identifiable source in the minds of an economic actor.

*Lachmann’s essay can be read in a book titled: New Directions in Austrian Economics by Louis Spadaro

-Isaac Marmolejo


2 responses to “Lachmann’s Austrian Themes for The Austrian Revival

  1. What I do not get here is 1. What does radical subjectivism have to do with one of the main themes of Austrian Econ and 2. why do you all in all reject formalization, and you claim it to be in some Mengarian spirit but Menger had some neoclassical aspects to him

  2. 1) Lachmann was saying that older Austrians have already said what needed to be said about the subjectivity of preferences, which is great but now the task for new Austrians was to expand subjectivity to the topic of expectations, which is something lacking, even today, in the Austrian literature.

    2) Of course, I do not reject that one can interpret Menger as a neoclassical, or better said, ‘ an incomplete neoclassical economist,’ but I think one misses the point of the Mengerian message if you think that way.

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