Bryan Caplan  

What Austrian Brain Drain?

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Degrees of Freedom has an incisive critique of my Austrian brain drain allegation:

If Austrian economics and mainstream economics were both equally persuasive, we should still expect to see far more libertarians who were persuaded by mainstream economics than libertarians who were persuaded by Austrian economics just for reasons of exposure. But the reality, as Caplan points out, is much different. Again, how did this state of affairs come about? Why is it that such a huge number of libertarians even know about a mostly unknown school of thought, let alone find this heterodox approach to be the best way to analyze economic issues? The explanation that seems most plausible to me is that people just find arguments based on Austrian economics more persuasive than arguments based on mainstream economics.

[Scratching my head...]

Maybe! But I suspect that the real story is that Austrian economics is persuasive to people who were going to become libertarians anyway. It is a powerful meme in the libertarian sub-culture, but it draws strength from - and hurts the spread of - the broader libertarian meme to which it is attached.

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COMMENTS (6 to date)
James@DoF writes:

I'll readily admit that your theory is one possible way of explaining the data. How would you know (what set of observations would tell you?) if you are wrong?

Yours seems like a position that one might get stuck in. If I see a statist that has heard of Austrian economics and got heartburn over it, that's evidence that Austrian economics hurts libertarianism. If you see an Austrian libertarian, I just get suspicious that person was going to become a libertarian anyway.

Constant writes:

I fail to see what is so horrendous about Austrian economics. In fact one of your main complaints about the Austrians (which is not a complaint about Austrian economics) is that "Austrian economists have often misunderstood modern neoclassical economics, causing them to overstate their differences with it." That means that Austrian economics is not so different from mainstream economics. Well then, what's the harm in learning economics the Austrian way, if so much of it is in fact mainstream? What's the big deal?

Another criticism: "Several of the most important Austrian claims are false, or at least overstated." And mainstream economics is infallible? Mainstream economists never overstate anything? Can this be a serious criticism?

Might it not be more fruitful to launch a critique of these false claims from within an Austrian framework? If you think it cannot be done then what your criticism should have been is not that the claims are false but that the framework is false. That would be the deeper problem, if it were a problem. And it would be easier to tackle it.

When you make criticisms like, "As plausible as Rothbard sounds on this issue, he simply does not understand the position he is attacking," and then use these to attack Austrian economics, it seems to me that you are, among other things, confusing the errors of individuals with problems with the theory.

Brad Hutchings writes:

Bryan, your argument might have made sense 12 years ago. The thing that's changed though is the Internet. What we have is a network phenomenon that just about everyone has access to which is node driven. It's bottom-up. We have clear examples of say, stories being broken on one blog and then spread around to saturate the nodes and become big stories. Or chain letters, spam, scams, rumors, lies, etc. Starbucks not giving to the military, debunking the rumor, the man with the giant cat, dating sites, etc. Or look at the serious downside, with child porn, predators, viruses, firewalls, etc. We have an economy of ideas and thought that behaves entirely according to Austrian individual-centric bottom-up models. Nobody talks about some abstract "virus supply" (except when marketing Macs). They worry about infected computers.

We have people on the Left (think Cluetrain crowd) embracing the substance and style of Austrian arguments when it comes to developing an understanding of "the net". With net neutrality (as misguided as it is), they can be seen as embracing the primacy of the network! We have bloggers (Austrians) vs. the MSM (classicists) and the bloggers are clearly starting to have episodes of influence, even driving a growing proportion of what the MSM covers.

I think in this context, where we all consciously act (by using our mostly personally assigned computers and other network devices) as nodes in this network, Austrian influence can flourish beyond what long-term Austrians ever thought possible. Normal people already understand that if they don't virus protect their computers, they are putting others at risk. Probably more so than the safe sex message ever registered! How big of a jump is it to get normal people to view the real world the way they have come to view their online world? How long before they start explicitly seeing a high price as a signal that they might hold off the way they see a slow website as a signal that they might come back later?

John T. Kennedy writes:

The "libertarian meme" isn't spreading.

Why would individuals care much about getting economics right when they'll get negligible return on their invested effort?

James writes:


Why start from the assumption that the return is negligible? Libertarians might place a really high value on having a correct understanding of the world. Perhaps I've misunderstood your comment?

Brent writes:

I became sympathetic to the Austrian position at a wonderful institution of higher education (Hillsdale College), before I became aware of the libertarian platform (which I now align myself with).
Going on to graduate school in econ at a neo-classical school opened my eyes to this viewpoint: History of economic thought is NOT taught "effectively" at most state institutions. Many of my classmates (and teachers) were surprised to learn that many theories that bolster today's neo-classical argument started with an Austrian supposition.

I don't think it is a drain, but a case of rational ignorance on the part of today's econ students...with causation lying on the part of the school's inability to teach history of economic thought.

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