In recent days, we have been treated to a bizarre spectacle in the Austrian blogosphere: a metaeconomist who has never contributed anything of substance to economic theory casually denigrating the achievements of a truly great economic theorist, William H. Hutt. Hutt was one of the greatest economists of his generation, which included Lionel Robbins, Arthur Marget, Friedrich A. Hayek, Fritz Machlup and Gottfried Haberler. Hutt obtained his highest academic degree, a B.Com (Bachelor of Commerce and Administration) from the London School of Economics. Yet the eleven books and countless aticles he published over a span of more than 50 years represented the consummation of the great Austrian-oriented LSE tradition that began with Edwin Cannan and included Robbins, T.E. Gregory, George Thrirlby , Arnold Plant and other eminent contributors to Mengerian causal-realist economics.
Let us dwell on this puzzling incident for a moment because there is an important lesson to be learned from it regarding contemporary economics. A metaeconomist is someone who discourses about the proper way to discourse about economics. He approaches theoretical controversies from “above the fray” as it were. From this Olympian vantage point, he pronounces on the outcome of these controversies according to esoteric, ahistorical and abstract standards that are irrelevant to the aims and purposes of the participants themselves. As a result the metaeconomist is reluctant to articulate and defend the standards he is using in his evaluations because he really knows very little of the content of the debates in question. A casual judgment is substituted for serious argument. Mundane economists, in contrast, are interested in grasping and explaining the economic reality unfolding in the everyday world around them. Their criterion for judging an economist as great, mediocre or just plain silly is concrete and practical: the achievement of said economst in discovering and advancing economic principles and theorems which elaborate the essence of the true causal laws actually operating to bring about the sequence and concatenation of complex phenomena observed in reality (Menger’s causal-realism).
So when a metaeconomist, who has never done research in the field, delivers himself of the opinion that Hutt’s critique of Keynes “was weak compared to the advocates of [Keynesian economics],” we should be properly skeptical and first test his claim against the opinions of the mundane economists who have made contributions in the area.
Let’s perform such a preliminary test. Axel Leijonhufvud, the innovative monetary theorist and interpreter of Keynes’s economics, is a good starting point. In his discussion of job search and information costs in the labor market, he wrote: “In my [earlier] book I cited Professors Armen Alchian and Kenneth Arrow in connection with the analysis . . . . I would here like to make retribution for the worst sin of omission that I have so far found myself guilty of: Professor W. H. Hutt’s Theory of Idle Resources (1939) ought to have been my locus classicus in this discussion.” Locus classicus? This is indeed high praise from an acknowledged master of the field. The profoundly original economist Armen Alchian “around UCLA apparently used to say that Hutt’s Idle Resources was one of the three most important books on economics.” Leland Yeager, a monetary theorist and critic of Keynes of no mean stature, said that Hutt’s “theory of cumulative deterioration in a depression is remarkably similar to the theory of Clower and Leijonhufvud.” The eminent labor economist, Morgan Reynolds called Hutt a “great–and greatly neglected–economist.” Perhaps the greatest economist of the twentieth-century, Ludwig von Mises concluded his review of Hutt’s critique of Keynes and te Keynesians, Keynesianism: Retrospect and Prospect with the following assessment: “Professor Hutt’s contributions to economic science were long since highly appreciated by all serious students of social problems. His rank among the outstanding economists of our age is not contested by any competent critic.”
As I mentioned, this is only a preliminary test. Ultimately the truth or falsity of competing claims among scientists cannot be established by appeal to authority but must be sorted out in one’s own mind. For those who are curious about Hutt’s achievements and his stature as an economist, I recommend you start with the following short articles and the references cited therein: 1 2 3 4 5