Just found this gem – F.A. Hayek’s speech at the Nobel Banquet on 10 December 1974. Hayek’s Prize Lecture, “The Pretense of Knowledge” is a classic work chastising the mainstream of the economics profession for their fatal conceits, but this quick candid speech captures the dangers of such social prestige gained by economists. Nobel Laureates must not be regarded as demagogues to be praised, lest we follow Paul Krugman into neomercantilist chaos. I particularly enjoy the Marshall quote.
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[This paper was originally written for ECON 3469 - History of Economic Thought, and is my most challenging thesis yet. As with anything in HET, this is conjectural.]
Alfred Marshall, an Austrian Sympathizer in the Cambridge Court?
By Ryan Safner
I. INTRODUCTION
Alfred Marshall, the great founder of neoclassical economics, shared more in common with the Austrian School than is traditionally considered. Austrian economists tend to resent Alfred Marshall as the theorist who subsumed their subjectivist theories into an objective and static model of equilibrium analysis. However, they fail to recognize the connection between Marshall and elements of the Austrian methodological tradition. To be sure, Marshall is clearly no Austrian, but many of his comments on the form and scope of economics mark him as a potential fellow-traveler. The broad range of economic action described by Marshall, and his insistence on practical applications to the real world unites him with Austrian theorists. His descriptive emphasis on the biological-evolutionary nature of the market over physical-static modeling suggests of Austrian methodology. His deep comprehension and subsequent temperance towards mathematical economics also provides hints of Austrianism. Most mainstream economists believe that Marshall had historically captured all the Austrians’ relevant contributions into his work, thus rendering the successive generations of Austrians as unnecessary anachronisms. Such followers, however, fail to appreciate the distinction that Marshall may have seen, between his dynamic economics and the successive body of economics attributed “Marshallian.”
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