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Source link: http://archive.mises.org/10165/pursuing-a-vocation-in-austrian-economics/

Pursuing a Vocation in Austrian Economics

June 19, 2009 by

The Summer Fellowship Program has grown by leaps and bounds since its founding by Professor Guido Hülsmann in 2000. This year the program includes eighteen young men and women from the United States, Canada, Germany, Spain, France, Turkey, Denmark, Poland and the Czech Republic. Their disciplines range across the social sciences from economics and history to political science and sociology, although most of the fellows are pursuing graduate degrees in economics and aspire to a vocation of teaching and writing Austrian economics at an academic institution. FULL ARTICLE


Abhi Mallick June 19, 2009 at 9:29 am

I must say this is very exciting to read! Causal realist economics lives on and is thriving. I must say this gives me many ideas for what I could look into myself in these areas. I must say I would be very keen to read both the papers on Economic calculation and the capital asset pricing model.

Renegade Division June 19, 2009 at 11:47 am

I was wondering if I could get some contact information of Edward Perry(I believe he is working on Economic calculation Central planning as NP-Complete problem).

Joe June 19, 2009 at 12:07 pm

Renegade Division,

That sounds interesting. I’m currently studying computer science and I’d like to read about this too.

Joe Stoutenburg June 19, 2009 at 12:51 pm

This is a very useful article. I hope that you will consider writing on the experiences of your fellows regularly. I have considered from time to time going back to school for an economics graduate degree. It’s a matter of weighing between staying in my comfort zone in a well-paid job using my quantitative finance education and venturing outside that zone into something about which I am passionate. Writing about the prospects of current students is of value to people like me.

Please keep it up.

Renegade Division June 19, 2009 at 1:18 pm

Haha, its my observation that a lot of Computer science students are attracted towards Austrian Economics(I believe it is because of the logical nature of Austrian Economics).
Similarly those who love mathematics get sweeped into the mainstream economics pretty easily.

I first came with this idea that its impossible to perform rational allocation in Central planning because its an NP-Complete problem when I first fully comprehend what Mises was talking about, “he means Central planning is an NP-Complete problem” lol.

2nd June 19, 2009 at 1:41 pm

Any idiot knows you must live below your means if you want to accumulate wealth.

Any idiot knows you need to accumulate capital prior to have something to invest.

I just don’t see why “economics” really should be elevated to a science, much less require a Ph.D.

Economics is so simple and obvious, I just don’t see why idiots would want to make a complex science out of it.

Please, don’t confound economics with accounting.

And please acknowledge that 95% of all accounting is simply in order to conform to fiscality.

Take taxes and regulations away and most companies could fire their accountants and lawyers.

Economics is really simple.

Now go study a real science like math and physics.

For me, any economics theory which requires more than high-school knowledge is really religious made up stuff.

Studying economics is like studying the law, it really doesn’t seem like true science to me and it has the feeling and taste of astrology and religion.

There is no point in trying to understand economics at the “macro” level.

Economics is really at the individual level and at this level it’s so simple even a child can be an expert at it.

filc June 19, 2009 at 1:54 pm

Where is this Austrian Economic minded neighborhood in Madrid? Maybe I should move there….

J Cortez June 19, 2009 at 2:35 pm

Great stories. All of them are excellent, but the one that stuck out for me was Ed Perry’s. I’ve never heard of “NP-Complete” before, but the concept sounds very interesting.

Joe June 19, 2009 at 4:16 pm

“I first came with this idea that its impossible to perform rational allocation in Central planning because its an NP-Complete problem when I first fully comprehend what Mises was talking about, “he means Central planning is an NP-Complete problem” lol.”

I’ve spent some time (not much) thinking of agent-based economic modeling (representing praxology) as opposed to using the traditional methods of economic modeling (differential equations, and most current/mainstream economics)

I suppose if the problem of price determination was mathematically properly stated, it could be an NP-complete problem. You’d have to consider the number of agents in the economy, the number of types of consumable items (products, services), and the number of each type available given a steady output by a production process.

Essentially, I picture centrally planned pricing as an algorithm running on one CPU, while a free market that determines prices is a parallel algorithm running on N CPUs, where each CPU is an agent in the economy. Instead of one CPU running an imprecise algorithm to determine prices for all products for all people, all the people can run their own algorithms to determine their own pricing for all their needs.

I’m sad to see that very, very little work has been done with respect to agent-based modeling and economics. The most I could find was here: http://minsim.cs.princeton.edu/publications.htm

“Great stories. All of them are excellent, but the one that stuck out for me was Ed Perry’s. I’ve never heard of “NP-Complete” before, but the concept sounds very interesting.”

NP-Complete refers to a classification of problems in computer science. Computer science deals with mathematical problems, and we use algorithms to solve them. Algorithms are pretty much instructions. For ex: To dress up in the morning, you put on your underwear before your pants, and then you put on your socks and then your shoes. That’s an algorithm for putting your clothes on.

A problem classified as P is a problem that can be computed in polynomial time on a deterministic turing machine (all computers today are essentially really fast, really complex deterministic turing machines)

A problem classified as NP is a problem that can be computed in polynomial time on a NON-deterministic turing machine. We don’t have non-deterministic turing machines, so to compute algorithms that solve problems that are NP takes a long time.

There’s a lot more stuff on this online. Look up “Computational complexity theory”

Peter Boettke June 19, 2009 at 7:26 pm


Thanks for this excellent (and optimistic) report.

I was particularly excited to hear about the student studing Economic Sociology. This is indeed a very fruitful field for Austrians to enter, and both Mark Granovetter and Richard Swedberg know a lot about Austrian economics. Swedberg’s Max Weber and the idea of Economic Sociology has a lot of Misesian themes, and his latest book Tocqueville’s Political Economy, discusses Say’s influence on Tocqueville. I would also suggest that this student look into the work of Peter Berger — Berger was a student of Alfred Schutz, and Schutz as everyone here knows was a student of Mises. We are, in fact, organizing a conference on Berger’s work for the fall through the Fund for the Study of Spontaneous Order (Leonard Liggio and Bill Dennis).

Brian Pitt is a graduate student at U of Delaware pursuing this path as well.

Anyway, great stuff Joe and congratulations and best wishes for a wonderful summer.


Peter Boettke June 19, 2009 at 7:40 pm

BTW, the student at Indiana should go see Michael Alexeev. Mike was at one time the DGS at Indiana, and prior to that was my professor for math econ, micro, and Soviet economics. Mike is a great guy, knows about the Austrian school, and appreciates market-oriented arguments.

There are other very smart guys, I am sure he knows, as Indiana such as Eric Rasmussen.

Outside of economics, I would strongly recommend getting to know Lin and Vincent Ostrom over at the Workshop in Political Philosophy and Policy Analysis. My new book, Challenging Institutional Analysis (Routledge, 2009) provides an overview of the Ostroms’ and discusses the relationship between Buchanan and Tullock with the Ostroms’ on the one hand, and Mises and Hayek and the Ostroms’ on the other.

Indiana University is indeed a great university with tremendous intellectual opportunities for students with interests in economic theory and political economy.

As I said before, your report gives us a lot of reasons for optimism with respect to the future of Austrian economics within the profession.

Peter Boettke June 19, 2009 at 7:56 pm

Last comment, promise.

To the commentator wondering about agent based modeling, I think you are overlooking some key references. Actually, the application of agent-based models in economics is rather common-place, not at all rare. In fact, some have even pointed out the relationship between agent-based computational models and Austrian economics for well over a decade now. Nicolas Vriend in 1999 published a paper entitled “Was Hayek an ACE?” — see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=185650

Robert Axtell has a very important Econ Journal paper on the modeling the exchange process using these techniques. We ran a symposium on the exchange versus value paradigm in economics in the RAE, and Rob Axtell contributed a paper discussing this and other work as well. See http://www.springerlink.com/content/k7uu45577k64/?p=3fa959e3932a415b92f56d6de6bad707&pi=0

Finally, at GMU we have the Center for Complexity (http://socialcomplexity.gmu.edu/) and over the years several of our students who have an interest in Mises and Hayek’s ideas have also pursued studies at the Center. Mike Makowski (http://www.michaelmakowsky.com/) who is now a professor at Towson University is one example. Richard Wagner is particularly keen on encouraging students to pursue this path of study at GMU. Roger Koppl is also someone who has really pushed agent-based modeling among Austrian school economists.

Good luck with your work.


Joe June 19, 2009 at 8:04 pm

Wow! Thanks, Peter.

I guess I was just skimming through the wrong places for this kind of info and work. Guess it takes someone who has actually studied economics to find this good stuff.

Thanks! :)

Bruce Koerber June 19, 2009 at 8:12 pm

Translation: Causal realist economists are those who examine the empirical facts of the real world and connect them to the subjectivist nature of human beings.

Joe Salerno June 20, 2009 at 11:34 am

Thanks for the info, Pete. The Mises fellows will find it very useful.

J.K. Baltzersen June 23, 2009 at 1:04 am

Dear Prof. Salerno:

Thank you for this wonderful article. It makes me long for my student days.

The NP-completeness project is indeed cool.

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