Some Comments on Rothbardian criticism

It is known that Murray Rothbard has always been a critic of the radical subjectivist school, often labeling it as a nihilistic school. He states on Lachmann:

Ludwig M. Lachmann, who had been a disciple of Hayek in England in the l930s and who had written a competent Austrian work entitled Capital and Its Structure in the 1950s, was suddenly converted by the methodology of the English economist George Shackle during the 1960s

Basically he states that Lachmann was a true Austrian throughout his first half of his career but later turn to a Shackelian. This passage has a footnote and it claims that Lachmann’s Austrian work is in Capital and It’s Structure and his departure of his Austrian insights is seen in his From Mises to Shackle. But Rothbard is mistaken that these works are not consistent with each other. I would look at Chapter 2 of his Capital and It’s Structure, which highly emphasizes subjective expectations and what this implies to capital theory. Lachmann didn’t have a change in thought as Rothbard claims.
Rothbard also states:

An amusing but instructive event occurred on the occasion of the conference of American Austrians at Windsor Castle in the summer of 1976. Under the good offices of Professor Stephen C. Littlechild of the University of Birmingham, a kind of summit conference was arranged so that some of the American Misesians could meet the English Subjectivist School, as the Shackleians call themselves. The eminent Subjectivists at the meeting included the doyen of that school, Shackle himself, as well as Terance W . Hutchison, Jack Wiseman, and Brian Loasby. At one point, the Subjectivists were lamenting that they could not offer a program of graduate economics courses as alternatives to the neoclassical paradigm, since all they had produced were a few critical essays but no substantial body of economic theory. I replied in some surprise that there was indeed a great deal of systematic Austrian literature available, including works by Mises, the early Hayek, and my own work, in addition to volumes of Böhm-Bawerk and Frank A. Fetter, among others. The blank looks of incomprehension on the faces of the distinguished Subjectivists were a revelation of the enormous extent of the inherent gulf between Shackleian Subjectivists and Misesians.

I’m not really sure what of this is true. I don’t know much on Hutchison’s work, but Shackle appealed to Keynesianism (thus his label as a post Keynesian by many), Littlechild has works on policy (see his book Fallacy of The Mixed Economy, and especially Wiseman too, which most of his work revolves around policy (see “The Political Economy”, “Guidelines for Public Enterprise”, “Uncertainty, Costs, and Collectivist Economic Planning”… I’ll stop there, but there are plenty more). Brain Loasby has articles on economic theory too (see “Management Economics and The Theory of the Firm” and “Hypothesis and Paradigm in the Theory of the Firm”). If anything, they were probably stunned at Rothbard choices of reads because they already have confronted the (orthodox) Austrian literature. It is worth noting on the policy recommendations of the radical subjectivists. Unlike the “true” Austrians (the people at Mises Institute for example) who at least agree of free market econ, the radical subjectivist group (or the English subjectivists as Rothbard labels them) do not really agree on such a thing, it is a school of thought more interested in human action, subjective expectations, and what implies from that (something which the Austrian school should be concerned about). Also, the above radical subjectivist literature should also be useful to see that Rothbard’s claim of radical subjectivists as nihilists is one of a straw man and misrepresentation.

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7 responses to “Some Comments on Rothbardian criticism

    • Well I am sure the meeting between the “American Misesians” and “English Subjectivists” actually happened (Littlechild confirms the meeting in one of his writings in which I can’t remember what piece it was). But I question Rothbard’s claim that the subjectivists lack policy literature, this is utter nonsense.

      As far as whether the subjectivists actually called themselves English Subjectivists, I don’t know. But as I note in a post*, Wiseman states in the foreward to his essay “General Equilibrium or Market Process: An Evaluation”:
      “This essay returns to the critique of established theory…It is concerned with the question of equilibrium, but although the conference assignment for which it was prepared called for a comparison of neoclassical general equilibrium theory and Austrian market process, I interpreted my remit more ambitiously, to incorporate a criticism of both formulations from the point of view of a radical subjectivist, and to make some suggestions as to what is now needed… The paper concludes by extending the discussion to incorporate the arguments of radical subjectivists such as Shackle, Littlechild*, Lachmann, and myself.”

      *radicalsubjectivist.wordpress.com/2012/07/16/an-update-on-buchanans-comments-on-wiseman-and-shackle/

  1. I think the problem arises when there is not a generalized agreement on policy. It’s just everywhere really. Post Keynesians are lefties, new Classicals are righties, Marxists are lefties, etc, but what are radical subjectivists?

        • Yes I can make such a comparison, why can’t I? As Hayek rightly notes in one of his interviews, the early Austrians were concerned about methodology, being a free marketeer or socialist was irrelevant to whether you advocated Austrian econ. I don’t understand why the Austrian school can’t still be just that.

          But lets put this aside for the sake of argument and define what a classical liberal is and what this implies because Menger, for example, advocated many policies (eg forest regulations, working condition regulations, progressive tax system, government monopoly of coinage, etc) that current classical liberals would view as statist or against classical liberal political philosophy.

          • I believe the “anarcho caps” are generally a recent development and I think Isaac you do a good job of distinguishing the difference between anarchism and classical liberalism from the past several posts I’ve read.

            You may also be interested in the work of Wilhelm Ropke and his “Third Way.”

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