Keywords: Economics, Austrian, Monetarism, Hayek, Keynesianism

Title: Living Economics

Author: Peter Boettke

Publisher: Independent Institute

ISBN: 978-1598130751


Peter Boettke is passionate about economics and he wants you, the reader, to share that passion. But his is a view of economics that is radically different to the mainstream view of the subject. His is an economics that is organic, narrative and exploratory. It is decidedly not the dry, mathematical pseudo-physics that seems to predominate in the popular media and in much of academia. Living Economics, which is aptly named, is Boettke's attempt to describe the Austrian school of economics to a new audience and to pass on both his love of the subject and the hope that the subject can be freed from the scientistic bias that substitutes mathematical models and theorems for the human touch.

Simply put, Boettke thinks economics is too important a tool for understanding society to be left in the hands of those who currently dominate public discourse in the subject. Whether they be some form of state interventionist Keynesians or monetarist Friedmanites, Boettke's Austrian school of economics offers an alternative grounded in a philosophical view of the world that is radically different. As Hayek puts it:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

While the differences between Austrian school economics, which is known primarily for being market oriented in a classically liberal sense, and Keynesianism are known, the differences between the Austrian school and the monetarists is less well known. Indeed, there are many who believe that they are one and the same thing, principally because they share many political positions in common - particularly in their attitude to state intervention.

Part of the book includes a survey of some key thinkers and teachers across the field of economics, including Hayek, von Mises, Rothbard, Buchanan and others. But this survey, which draws out the common epistemological approach that these thinkers have in common, seeks to show not just the genesis of their work, but also to show how this approach differs from the scientism that has arisen as a result of a move from focusing on the real world to looking at the model as the reality that real life has to approach. As Boettke puts it:

Equilibrium models still had to meet some standard of realism, even if these standards no longer had official methodological legitimacy. Thereafter, however, it was the model, and not the world, that became the dominant source of intellectual excitement. Technique has trumped substance ever since.

For this reader at least it brings to mind the difference between the alarmist climatology championed by the IPCC and that of those climatologists who start with the data rather than assume that the model is right and mother Nature wrong.

For those of us not versed in economics, this is an engaging and enlightening read. While it covers a wide range of topics, the writing is always clear and the author's love for his subject is infectious. The hope that shines through is that a new generation of economists will be inspired to break away from the sterile models of economic equilibrium and to look again at economics as a tool to explain what is out there rather than as a tool which can be wielded by a select few social technicians.

Let's hope Boettke, and his fellow Austrian school economists, succeed.

Contents © London Book Review 2013. Published Jan 02 2013