Saturday 8 April 2017

Caldwell on Economics and Hayek

Bruce Caldwell is a well-known historian of economics, professor of Economics as Duke University, but perhaps most associated with running the Centre for the History of Political Economy at Duke. Since 2003 he has been the editor of the collected works of FA Hayek and safe to say, he is the go-to-guy for knowledge about Hayek, his life and his ideas. A few weeks back, while attending events in Prague I had the great pleasure of meeting him, chatting a bit (read: fangirling) and take a few compulsory photos. He gave us a heads-up about his own major biography of Hayek coming out soon enough, which I am very much looking forward to.

During this intense Prague weekend with Lithuanian Free Market Institute's Colloquium and Prague Conference on Political Economy at the CEVRO Institute, and LibertyCon at Charles University, Caldwell made a few appearances; he gave a short seminar at CEVRO on Thursday, the Friedrich von Wieser Memorial Lecture on Friday and a packed lecture on Saturday titled 'Friedrich A. Hayek: His Life and Ideas'. I mostly want to comment on things he said during his more informal talk on Thursday.


He mostly told his story, through college and how lack of job opportunities made him go into grad school. He recalled an instance, familiar to most economics students and probably making most of my friends in Rethinking Economics happy, where students objected to the models used and the tutor replied "my job is to teach you the models and nothing else". Caldwell +40 years summary was quite hillarious: "It felt like LSD for 4 years". Feeling disenfranchised with the curriculum is hardly a novel trait.

Caldwell's own interest into Austrian economics came from a 1978 summer workshop at University of Colorado, Boulder. He said he "learned more in 2 weeks than in college"  needless to say, I know how that feels. Somewhere along the way he found an interest in Hayek, an interesting character for many reasons. Primarily to Caldwell, is the strange mix of influences ranging from Mises and Popper, two intellectuals who in many ways were diametrically opposed to one another. Hayek's entire career and intellectual work can be summarised as an attempt of gradually developing "a theory of everything"

Caldwell's work as a biographer of Hayek and editor of his collected works is a particular kind of work, more aligned with what one would expect of historians; reading old letters, talking to the family, trying to find documents and unpublished material, sorting out what's relevant and what isn't. The most annoying thing with this entire line of work is that many of Hayek's letters are missing. Interestingly enough, most letters written by Hayek after the mid-1920s have disappeared, and so Caldwell's somewhat infuriating task is to read the other side of that conversation (to friends, family, collegues) etc, hardly ever Hayek himself. Most information about Hayek's life is given second hand, from memory or via oral history.

Among the old letters we do still have from Hayek is his first experiences of the United States, visiting New York as he did in 1923-1924. It was so noisy and busy, Hayek thought, that "I can't hear myself think". Moreover, he was "horrified by the American people", because of all the painted women (make-up) and the way of dressing: you couldn't tell class since everyone wore the same kinds of clothes. Caldwell also told us some stories about the family itself during the wars. While Hayek in relative safety in Britain (where he of course wasn't allowed to participate much in the war effort, because of his Austrian origin) was writing The Road to Serfdom, his brother joined the Nazi party (most likely for career reasons rather than ideological conviction). The letters exchanged with his mother during those years are particularly interesting sights into the effects of wars on normal families.

I want to mention two potentially controversial things that almost accidently slipped out during the discussion. The first was Hayek's position against Keynes, which of course is well-known (although perhaps exaggerated). What is less known is Hayek's distaste for Milton Friedman's positive method of theories able to predict "phenomenon not yet observed". Hayek criticised this, saying it was "as dangerous as Mr. Keynes' ideas". The second thing, probably on the other side of my ideological acquintance, was Caldwell's hesitant comment on Hülsmann's biography of Mises. I'm fairly fond of Hülsmann's work, and I read his rich biography of Mises quite obsessantly, which is why it was surprising for me to find that Caldwell largely disagrees. Unwilling to spark controversy among an unknown audience, he referred to his 2008 review rather than spelling out his opposition. In short, Caldwell believes that "Mises deserved a better biography than Hülsmann's". I'm sure I'll have much reason to return to this dispute.

All in all, as CEVRO's president and director of the PPE program Josef Šima said before presenting Caldwell: "at CEVRO we always try to bring people with something interesting to say". I couldn't agree more, for a Prague-based institute the very next week bring said Hülsmann as well as Dr. Hampl, the vice-Governor of the Czech central bank. Sometimes CEVRO strikes me as a Glasgow Economic Forum all-year-round, and I would recommend anyone to apply for the Master's programe.

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