Handbook on Contemporary Austrian Economics

158 <strong>Handbook</strong> on contemporary Austrian economics
Keynesian hegemony in thought and policy; the collapse of communism
in East and Central Europe and the former Soviet Union; the widespread
recognition of the failure of development planning in Latin America, Asia,
and Africa; and the integration into the world economy of some of the
poorest nations in the world through liberalization and globalization.
Those are some amazing facts to contend with even if at the backend of
that era we also witnessed growing tensions over the threat of terrorism
resulting in military conflict; increased debate over the consequences of
development on the environment and the demand for policies to address
global climate change; and a world-wide financial crisis that threatens to
bankrupt nations. How powerful exactly are ideas of economists supposed
to be Keynes perhaps said it best when he simply stated about the power
of ideas that "Indeed the world is ruled by little else". I
This volume had a more humble ambition than to counter the rhetoric
of our age, or to trace out the ultimate influence of Mises' and Hayek's
idea on the global transformation toward market-oriented policies, or to
set the academic record straight once and for all on the contributions of
the Austrian school vis-a-vis neoclassical models of omniscient and hyperrational
agents interacting in perfectly competitive market environments,
or the representative agent models of modern macroeconomics. Instead,
it was simply to set out the modern Austrian school of economics as practiced
at the beginning of the twenty-first century as a progressive research
program in contemporary economics and political economy. Taking the
lead from my Introduction, the idea was to "reduce" the Austrian claim
to a unique approach to economic scholarship to a set of ten propositions
and to tease out the implications of those propositions.
The authors are all part of the next generation of Austrian school
economists and represent that third generation since the resurgence of
interest in the Austrian school following Hayek's Nobel Prize in 1974
and the organizational efforts of Israel Kirzner and Murray Rothbard to
create a modern Austrian school of economics starting with a conference
in South Royalton, VT in the summer of 1974. Kirzner and Rothbard
(and also Ludwig Lachmann) gave a series of lectures on methodology,
market process analysis, and money, capital, and macroeconomics.
Those in attendance formed the first generation of the modern Austrian
school, and included individuals such as Don Lavoie, Mario Rizzo,
Gerald O'Driscoll, Jack High, Randy Holcombe, Karen Vaughn, Roger
Garrison, Joe Salerno, Walter Block, and Richard ' Ebeling, amongst
others. Other conferences followed, a book series was established, and a
PhD fellowship program was established at NYU for students interested
in studying Austrian economics. Richard Langlois, Peter Lewin, Bruce
Caldwell, Bill Butos, and Lawrence White all joined that first generation