|Peter Boettke|
One of the most significant footnotes in the Austrian tradition of economic scholarship is Hayek's fn. 7 in The Counter-Revolution of Science, where he follows up on his point that every advance in economics that had been made during the past few generations was due to the consistent application of subjectivism to economic phenomena by pointing out that Mises was that single intellectual figure in economics who pushed the subjectivist paradigm most consistently and as a result ran far ahead of his contemporaries.
Last night (Sunday November 22nd), Emily Chamlee-Wright presented her presidential address to the Society for the Development of Austrian Economics. She explained the methodology of qualitative research that she employed in her work on Katrina. Emily explained to her audience the problem of reconstructing lives destroyed in the storm and its aftermath -- problems of coordination, problems of expectations, problems of signal extraction, etc. Ultimately, Emily stressed the main Machlup type question for the human sciences -- "what if matter could talk?" Yes, we want to do science as economists, but our subject matter is human actors --- the human condition and the deliberations that real actors make in addressing their dilemmas. Emily wants to understand the meanings that economic actors attribute to their actions, the behaviors of others, and the circumstances they find themselves acting within.
Emily contrasted her qualitative approach with more traditional quantitative approaches in economics. Personally, I thought the talk was delivered eloquently and its core message was brilliant. But it is a message that is hard for economists to hear because it does challenge not only the pretense of knowledge economists have, but the training they received that fuels those pretensions to the mantle of science.
I encourage everyone to read Emily's work on this, and to think hard about how to do empirical work once one takes the subjectivist turn in the sciences of man seriously. She has thought hard about how to operationalize these ideas. She actually spent time in the field trying to do interpretive style economics in Africa and in New Orleans. She has also thought hard about how to write up her results to communicate with her peers in the professional journals and in her books. We can all learn a lot from her experiences as a scholar, as a writers, and as a teacher. Personally, I think the issue of how to do a political economy that is grounded in meaning is more complicated because of the evolving policies of the institutional review boards dealing with human subjects that have become so dominant in universities. I prefer to think of empirical work in this line as either narrative history, contemporary history, or ethnography. The sort of radical ethnography of Erving Goffman, or his student Dan Rose, which was influenced by the Austrian economists/sociologists Alfred Schutz, has been made almost impossible to do because of IRB policies.
It is important to stress that Emily's discussion was about empirical techniques, as was Goffman's and Rose's adventures into living a radical ethnography. The theoretical perspective one uses for this act of interpretation is an entirely different intellectual exercise. But again, following in the Austrian tradition, the subjectivist perspective focuses the analyst to take into account purpose, intentionality, and meaning. Let me give two examples. In John Searle's Speech Acts (1969) asks his readers to consider the game of American football and the intention and meaning of various behaviors. If we drain intention and meaning from the analysis we could in fact explain patterns such as when the players with the same color jersey periodically form a circle (huddle), and then they periodically form a line again the players with the other color jerseys (line of scrimmage), and then they have a burst of interpenetration followed by the pattern of circle and then line, etc., etc. Such a theory doesn't help us understand the game of football, but we are able to state our knowledge in a predictable form.
Or better yet, consider the words of Israel Kirzner from Foundations of Modern Austrian Economics:
Let us consider a simple example. Suppose a man from Mars is doing research for his doctorate and, after focusing his telescope on a particular location on Earth, discovers a certain regularity. Through his telescope he observes a set of boxes lined up in a row. He further discovers that a smaller box moves past these boxes every day at 7:30 A.M., comes to a stop at one of the boxes, and then, after a short stay, moves on. Moreover the investigator discovers something else; out of one of these boxes a body emerges every morning, and when the moving box makes its daily stop, the body is swallowed up by the moving box. Discovering this regularity, the researcher postulates a definite law, the law of moving boxes and bodies. As he goes on with the research, however, he discovers that sometimes the box moves away before the body has entered it, leaving the body behind altogether; while sometimes the body moves at an unusually rapid speed, arriving at the daily moving-box stop just in time to be swallowed up before the box moves on. Now this Martian researcher may be able to predict just when the person is going to miss the box and when he is going to catch it. He may even be able to explain the movements of the body and the box entirely without reference to the fact that someone is trying to catch the bus because he wants to get to work on time. But if he does so, he has not told us everything there is to be learned about this situation. A theory of moving bodies and boxes that does not draw attention to the dimension of purpose gives a truncated picture of the real world. This is what economics, in the Austrian view, is all about. Economics has to make the world intelligible in terms of human motives. It is more than simply moving boxes or changing economic quantities.
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