Are Austrians Anti-Empirical?
By Bryan Caplan
[I]t is not the case, as Josh Barro
recently argued, “that Austrian economists reject empirical analysis,
and instead believe that you can reach conclusions about correct
economic policies from a priori principles.” To say so is to
misinterpret what Mises meant by the word praxeology and therefore fail
to understand what he recommended as the appropriate methods for
economists. It is also to rely on interpretations of what people like
Mises and Rothbard had to say, as well as the pronouncements of various
advocates of Austrian economics on blogs and Internet forums, rather
than engaging with the professional research being published in the
peer-reviewed journals by practicing Austrians.
On the contrary:
Subjectivism also explains Austrian skepticism about statistical
correlation being the privileged form of empirical evidence. It only
provides correlation, and to provide causation requires a theoretical
explanation. If such explanations must start with actors’ perceptions
of the world, then forms of empirical evidence that capture such
perceptions would be at least as useful. Austrians therefore frequently
turn to primary source material and interview and survey work as well as quantitative data to tell a complete story of how a particular economic phenomenon came to be and functioned.
Perhaps the most thorough and effective empirical work by Austrians in
recent years is that associated with the Mercatus Center’s research
project on Hurricane Katrina. Starting with a whole series of
interviews conducted with Gulf residents as well as deep investigation
into the events before and after the storm, Austrians produced a number
of papers exploring the role of local communities and the private sector
in generating recovery. Principal investigator Peter Boettke was lead
author on an overview article (Boettke et. al., 2007) that appeared in
the mainstream Southern Economic Journal. That piece along with the book by Emily Chamlee-Wright (2010), as well as her Rationality and Society
article with Virgil Storr (Chamlee-Wright and Storr 2009), and articles
by Lesson and Sobel (2007) and Horwitz (2009) exemplify this work.
The core insights of this work about the effectiveness of community and
private recovery efforts have significantly influenced the post-Katrina
narrative, arguably because they were based so thoroughly in the data
generated by the interviews and the careful treatment of history.
I’ll save my critique for Friday.