Heterodox Economics Newsletter

Issue 270 October 19, 2020 web pdf Heterodox Economics Directory

Many people know that Austria has produced some idiosyncratic economists in the course of its history including, among others, people like Carl Menger, Joseph Schumpeter or Friedrich August von Hayek. Some of these authors are even grouped in to a theoretical school – the Austrian school of economics – that is both, heterodox as well as in favor of 'free markets' & large-scale deregulation. When having small talk at conferences I am always careful to say "I am from Austria", because the wording "I am an Austrian" can give a wrong impression in such contexts: "I am only an Austrian by origin, but not by belief", so to say ;-)

However, there is also another side to Austrian economics, that differs strongly from the conventional image coined by the Austrian school. In fact, economics in Austria has always been rather diverse. It is a little bit of an idiosyncracy – probably owing to the efforts of FA Hayek – that it's Hayekian branch has become so visible that it overshadows this diversity, which is, by the way, still visible today (see here for the details). Historically, this diversity has manifested in different instances. One prime example is Austro-Marxism (see here, here or here), which strived to align the overcoming of capitalism with democratic institutions and managed to implement game-changing policies in the famous "Red Vienna" of the 1920s. Another example is given by the more institutionalist approaches that informed social-democratic governance in the 1970s. The most visible exponent of this phase is probably Egon Matzner, who was internationally renowned for his work on transformational challenges (see here or here).

Finally, economics in Austria has very early witnessed the emergence of a pluralist stream of thought that is closely associated with Kurt W. Rothschild. Rothschild was an extremely interesting thinker, who inspired a whole generation of economists in Austria (I admit, he is also my personal archetype for being a good economist), and I will write a little more about him in one of my upcoming editorials.

It was a pity that this 'other side' of Austrian economics has never been concisely summarized for outsiders to access. As Austrians themselves were seemingly not up to this task, an Australian had to take over and we have to thank John E. King for closing this gap. In his nice and accessible book on "The Alternative Austrian Economics" he will expose you in depth to the diversity of Austrian economic thought and the role of heterodox ideas that were taken up or developed in the course of its history.

All the best,

Jakob

PS: There is also an older paper from John E. King on Rothschild. You can check it out here.

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