Handbook on Contemporary Austrian Economics

164 <strong>Handbook</strong> on contemporary Austrian economics
cognitive economics and political economy of Timur Kuran and Bryan
Caplan, and the agent-based models of complex systems associated with
Rob Axtell and Peyton Young should all be seen as great opportunities
for those interested in the ideas of Mises and Hayek to develop them in the
context of contemporary social science. Topically, the work on colonial
origins, legal origins, constitutional and political economics, organization
and management, and entrepreneurial studies also opens great opportunities
for a new generation to bring the ideas of Mises and Hayek to the
forefront of professional discourse. Many of the authors in this volume
are in fact doing this and developing their own voices in the context of
contemporary economics and political economy.
Finally, we must recognize the great opportunity provided to economists
of all stripes by the pressing practical problems of the world that
demand explanation and understanding. We find ourselves in the midst
of a global financial crisis, the root cause of which appears to be a creditinduced
boom-bust cycle (i.e., the Austrian Theory of the Business Cycle).
Furthermore, we live in a time where a large segment of the world suffers
under the yoke of failed and weak states. In such a world, the traditional
economic approach of treating institutions as given is not appropriate.
Instead, progress in economics must seek to endogenize institutions; to
examine situations in which institutions within which economic activity
takes place are in fact being constructed either through design or evolution.
This is true whether we are talking about development in Africa, or
reconstruction in the Middle East. We are in fact confronted with issues of
life and death, and issues that may even touch on the survival of civilization
as we know it, and the economist is uniquely situated to provide the
necessary philosophic understanding and the public policy knowledge to
both grasp the essential problem and offer the requisite solution.
When I was at the same stage of my career as the contributors to this
volume, I once described Austrian economics as humanistic in its method,
and humanitarian in its concern. This is what attracted me to the school. It
promised philosophic understanding of the complex world around us, and
when combined with some basic concepts of morality produced a powerful
argument for a society of free and responsible individuals. Twenty
years later 1 still find this description to be apt. It is my sincere hope that
students of economics and political economy will read this volume, see
the common-sense wisdom of the Austrian approa~h to economics, as
well as the intellectual power of the Austrian school as a framework of
analysis for the most pressing problems of our age. The volume is not an
opportunity for indoctrination into a settled body of economic thought,
but an invitation to inquiry to the next generation of students guided by a
new generation of scholar/teachers who have learned from past thinkers,