Summer 2002 AEN - Mises InstituteThe Austrian Economics Newsletteris published quarterly by the Ludwig von Mises Institute. T HE A USTRIAN E CONOMICS N EWSLETTER Summer 2002 — Volume

Summer 2002 — Volume 22, Number 2

Copyright © 2002 by the Ludwig von Mises Institute518 West Magnolia Avenue, Auburn, Alabama 36832-4528

phone (334) 321-2100; fax (334) 321-2119email [email protected]; website www.mises.org

The Austrian Economics Newsletter is published quarterly by the Ludwig von Mises Institute.

THE AUSTRIAN ECONOMICS NEWSLETTER Summer 2002 — Volume 22, Number 2

Front cover: Ludwig von Mises and his father, Arthur Edler von Mises.

Interviews With Six Young Economists

THE NEWGENERATION:PART 1Interview with Edward Stringham

AEN: You’ve been coming to Mises Institute conferences sinceyour undergraduate days.

STRINGHAM: I was a sophomore at Holy Cross when Isaw a debate about the legalization of drugs with one of theprofessors in the Economics Department, Walter Block. I wasvery impressed and signed up for his class for the followingsemester. I always had a vague interest in the types of ideashe presented in class, but never before did I know it was thesubject of systematic study. Block was great. He really got meexcited about Austrian economics, libertarianism, and ideas ingeneral. After working on an equities trading desk for part ofthe year following college, I started at George Mason Univer-sity, where I completed my Ph.D. in economics four years later.

AEN: What was Professor Block’s class like?

STRINGHAM: The first few months were like shock therapy.I sat listening eagerly to everything he said. I was very curious.I had never heard anyone advocate privatizing the roads orprivatizing the oceans, but everything seemed to make sense.It really got me thinking. The idea that the market enabledindividuals with differing interests to interact peacefully wasvery appealing. I was in agreement that laissez-faire was a betterway to structure society, so I started thinking how far this couldbe extended. Could all social relations be handled by themarket and voluntary interaction?

It was around this time when the police in Worcester werereally starting to clamp down on college-age drinking and afterseeing them harass so many partygoers, I started wondering ifthe police could be privatized. Businesses typically care about

EDWARD STRINGHAMEdward Stringham (B.A. Holy CrossCollege; Ph.D. George Mason Univer-sity) is assistant professor of economicsat San Jose State University.

Beginning with this issue and continuingin the next, the Austrian EconomicsNewsletter explores the education,experiences, and intellectual ambitionsof a new generation of economiststeaching in the Austrian tradition.

Interviewed in this issue are:

• Edward StringhamSan Jose State University

• Shawn RitenourGrove City College

• Peter CalcagnoWingate University

Interviewed in Part 2 (Fall 2002 issue)will be:

• Christopher WestleyJacksonville State University

• William AndersonFrostburg State University

• Gregory DempsterHampden-Sydney College

“Why Libertarians Are Commies.”Block was taken aback. I told him,“Libertarians advocate privatiza-tion everywhere else, so why notpolice and courts as well?” Blocklooked around, closed the door,and then told me, “There are twotypes of libertarians: limited gov-ernment libertarians and anarchistlibertarians. I am an anarchist lib-ertarian.” That really piqued myinterest and it was all downhillfrom there.

AEN: Then you discovered therewas a vast literature on this subject.

STRINGHAM: Yes, so I startedwith a few of the major works inanarchist libertarian political phi-losophy: Randy Barnett, BruceBenson, David Friedman, HansHoppe, David Osterfeld, MurrayRothbard, and Lysander Spooner. Ihad never really spent summervacations reading school-relatedbooks, but Block had told me thathe envied me for being able to readall these books for the first time.Sure enough he was right; it was allreally exciting. Around this time Iwent to the Mises University so Iread the monographs they had sentme as well. All of these books gaveme a great introduction to Austrianeconomics.

Upon attending the Mises Insti-tute’s seminar I was surprised tomeet so many scholars who wereboth really knowledgeable and pas-sionate. I was amazed. If their goalwas to get people excited aboutAustrian economics, they did agood job. I have had some goodprofessors, but none who were asenthusiastic as the ones I experi-enced that week in Auburn. Theexperience really got me thinkingand later convinced me to go tograduate school.

AEN: Where your interests in theprospects for full privatization con-tinued.

STRINGHAM: Sure, and this is asit should be. There are some peo-ple who spend a lot of time pro-fessing how young Austriansshould proceed and how theyshould lead their careers. They saythat young Austrians should shy

away from studying Austrian eco -nomics in graduate school, and tryto pretend they are mainstreameconomists. This advice is given tolibertarians in other disciplines aswell.

This scheme advises that it is betterfor young free-marketeers toattempt to get a job by hiding theirviews, or at most being very mod-erate in one’s positions. In myopinion, this is terrible advice notonly from a perspective of personaldevelopment but also from a per-spective of personal success. It isnot clear that the stealth strategy isa good one. Are there any successstories and have these people madeany significant contributions to thestudy of markets?

Top mainstream economists oftenlike what they do and devote theirentire lives to their fields of study,so unless someone is that commit-ted to mainstream economics it isdoubtful one will be able to makeany mark. Many young free-mar-keteers think they can have it bothways, but this is questionable. Ayoung student could commit 10years of his life to becoming a rep-utable mainstream economist, butby doing so he would be necessar-ily devoting less time to Austrianeconomics.

AEN: The point actually seemsobvious: Austrian economics can’tadvance if people are not studyingit and advocating it.

STRINGHAM: Exactly. Althoughit is not impossible for someone tobe a top mainstream economistand a top Austrian, this is highlyunlikely. The law of comparativeadvantage would tell us this would

LUDWIG VON MISES INSTITUTE

AUSTRIAN ECONOMICS NEWSLETTER

their clientele while bureaucrats donot, but could this logic be appliedto the police as well?

In class Block had presented theclassical-liberal position on limitedgovernment and one day I wentinto Block’s office and told him Iwas going to write a paper entitled,

4

ALTHOUGHIT IS NOT

IMPOSSIBLE

FOR SOMEONE

TO BE A TOP

MAINSTREAM

ECONOMIST

AND A TOP

AUSTRIAN,THIS IS HIGHLY

UNLIKELY.

be non-optimal nonetheless. Aus-trians should try to be the best Aus-trians they can be, rather than try-ing to compete against M.I.T.economists at their own game. Thefailure to do this is the biggest pit-fall of many young people inter-ested in free markets in general.They compete on margins they arebad at and unfortunately they havelittle success.

I eschewed such a strategy anddecided to be Austrian all the way.I went to the graduate school whereI would have the most opportunityto study Austrian economics.George Mason University has anumber of classical liberals and anumber of courses that talk aboutAustrian works. This is the strengthof G.M.U. and hopefully they willplay it up even more. Ideally therewould be more programs like it, oreven better programs that couldcompete to be more Austrian.

I would rather learn from peoplewho will be supportive of Austrian

work, than be an outcast at ahigher-ranked program. My com-mittee—Peter Boettke, BryanCaplan, and Todd Zywicki—wasvery helpful throughout, and I can-not think of any others who teachat the Ph.D. level under whom Iwould rather write a dissertation.

Boettke was a real asset and thebest dissertation chair I could haveasked for. Being able to engage infriendly debates about Austrian eco-nomics and libertarianism with thelikes of Boettke, Caplan, and TylerCowen would not have been possi-ble at a mainstream school. Withoutthe backing of one’s committee it isdifficult to find a job, so I recom-mend that students pick a schoolwhere their committee memberswill support them and allow them tobe Austrian.

AEN: You seemed to do very wellon the job market.

STRINGHAM: Maybe I luckedout. In any case, I surprised a lot of

I ended up receiving the mostinterview requests in the entire his-tory of the program at G.M.U.Granted Harvard was not knock-ing at my door, but that was not my


VOLUME 22, NO. 2 — SUMMER 2002

people with my success. I had beenrepeatedly told by others that Iwould not be able to get a job if Iwas an Austrian, and one classicalliberal institute at my universityeven told me I should remove lib-ertarian articles from my C.V. Ichose not to take this advice, andwhen I went on the job market Iwas explicitly libertarian andexplicitly Austrian.

My dissertation did not makemoderate free-market propositionsthat almost no one would deny, butinstead made the claim that gov-ernment is not needed for theenforcement of contracts. This wasthe polar opposite of the stealthstrategy.

5

AUSTRIANSSHOULD TRY TO

BE THE BEST

AUSTRIANSTHEY CAN BE,RATHER THAN

TRYING TO

COMPETE

AGAINST M.I.T.ECONOMISTS

AT THEIR

OWN GAME.

I AM NOT SUREHOW MANY

PROFESSORS

HAVE BEEN

ABLE TO TEACH

OUT OF MAN,ECONOMY, ANDSTATE, BUT I AMHONORED TO

HAVE HAD THE

OPPORTUNITY.

unfortunately the chair of thesearch became ill and had to handthe hiring process over to one ofhis colleagues. In the end I happilyaccepted a job at San Jose State,which is looking into building afree-market/Austrian program.

AEN: You never sensed a handicapat not being, for example, a special-ist in econometrics.

STRINGHAM: Not in any way.Comparing my experience on thejob market with those whoattempted to be mainstream, it isclear that being an expert in all ofthe latest mathematical and econo-metric techniques is not a prereq-uisite for getting a job. Mostschools seemed much more inter-ested in someone who cared aboutideas, research, and teaching thansomeone who begrudgingly was asophisticated economist. This iswhy I think the Austrian Schoolcould really go a long way withestablishing more Ph.D. programsthat are unabashedly Austrian.That is my hope.

AEN: You don’t sound like you areprepared to cave in at the teachinglevel either.

STRINGHAM: My philosophy isthat a professor who teaches abouta subject in which he is interested isa much better teacher. I give mycourses an Austrian flair and assignat least one Austrian book. Forexample, when I taught intermedi-ate micro I assigned one standardtextbook by a U.C.L.A. economistso the students could learn whatthey would be expected to know.Then I assigned Power and Marketby Murray Rothbard. In one class Iused Rothbard’s Man, Economy, andState, which was a great experience.I am not sure how many professorshave been able to teach out of Man,Economy, and State, but I am hon-ored to have had the opportunity.

AEN: What has been the studentresponse?



target. I had interviews with multi-ple Top 50 Liberal Arts Colleges,Top 50 M.B.A. Schools, Top 50National Universities, and FirstTier Masters Level Universitiesaccording to the U.S. News rank-ings.

At one point I was being recruitedfor an Honors Program at a uni-versity with a Top 30 RankedEconomics Department, though

ADDITIONALRESOURCES:

Armentano, Dominick T., Antitrustand Monopoly, (Oakland,Calif.: Independent Institute,1996).

Benson, Bruce, The Enterprise ofLaw (San Francisco: PacificResearch Institute for PublicPolicy, 1990).

Garrison, Roger W., Time andMoney (London: Routledge,2001).

Hazlitt, Henry, Economics in OneLesson (San Francisco: Fox &Wilkes, 1996).

Menger, Carl, Principles ofEconomics (South Holland, Ill.:Libertarian Press, 1994).

Mises, Ludwig von, Anti-Capitalis-tic Mentality (South Holland,Ill.: Libertarian Press, 1994).

Mises, Ludwig von, Human Action(Auburn, Ala.: Mises Institute,1998).

Mises, Ludwig von, Planning forFreedom (South Holland, Ill.:Libertarian Press, 1980).

Mises, Ludwig von, UltimateFoundation of EconomicScience (Princeton, N.J.: D. VanNostrand, 1962).

Rothbard, Murray N., For a NewLiberty (New York: CollierBooks, 1978).

Rothbard, Murray N., Man,Economy, and State (Auburn,Ala.: Mises Institute, 2001).

Rothbard, Murray N., Power andMarket (Kansas City, Mo.:Sheed Andrews & McMeel,1977).

Rothbard, Murray N., What HasGovernment Done To OurMoney? (Auburn, Ala.: MisesInstitute, 1990).

6

STRINGHAM: Very positive. Ihad a fellow graduate student tellme that I should never use an Aus-trian book in an undergraduateclass and that I was doing a dis-service to the students. He and Itaught the same course at differenttimes and sure enough when theteacher evaluations came back myteacher evaluations were magni-tudes higher than his.

Economics is a really interestingsubject and there is no reason itneeds to be made boring for stu-dents. A lot of professors only focuson the mathematical aspects of eco-nomics because it is easier for them,but are the students really gaining?Here Austrians have an advantageover many who were trained inhighly technical economics butwho cannot explain basic economicconcepts to undergraduates.

Yes, most Austrians would beunable to teach graduate nonlineareconometric methods at M.I.T.,but the vast majority of economistsare not required to use those skills.Because Austrian economics does abetter job at explaining the realworld, we have an advantage overothers in the classroom. We canuse economics to inspire studentslike no other school, so the moregood teachers we have the moregood students we will have. This isa long-term strategy, but for aschool that emphasizes the impor-tance of education and the spread-ing of ideas, this is necessary.

AEN: What books or articles doyou find yourself recommendingagain and again?

STRINGHAM: For an introduc-tion I always recommend Economics

in One Lesson by Henry Hazlitt.The book is written with such clar-ity that I think anyone can learnfrom it. I also like Mises’s essays,“Economic Calculation in theSocialist Commonwealth,” and“Middle-of-the-Road Policy Leadsto Socialism.”

For those who have a free-marketleaning but do not yet apply thelogic across the board, I recom-mend For a New Liberty by MurrayRothbard. And for the economistwho has some time to spare Ibelieve Rothbard’s Man, Economy,and State provides an excellentoverview of Austrian economics.On a more advanced level, I likeJoe Salerno’s “Mises as a SocialRationalist” and his “Mises andHayek Dehomogenized,” andBruce Benson’s Enterprise of Law.

AEN: What is your current intel-lectual passion?

STRINGHAM: My primaryinterest, as it has been for the pastfew years, is using economic theoryto study social interaction withoutgovernment law enforcement. It isfairly common for people to ques-tion the political process and gov-ernment control, but when itcomes to police and courts, how-ever, a lot of otherwise good theo-rists for some reason believe gov-ernment to be a deus ex machinathat solves every problem. All eco-nomic analysis is thrown out thewindow.

Why there is this dichotomy, I can-not explain for sure, but I think thisis an area ripe for research. Manypeople believe that the Prisoners’Dilemma describes all social inter-action and that government is the

AEN: There is the usual argumentthat complexity requires formaliza-tion that only government can pro -vide.

STRINGHAM: And yet thisapplies to the simplest familial rela-tions, as well as the most sophisti-cated financial contracts. We seecooperation all the time, even in themost complex matters. For exam-ple, when I looked into the historyof stock markets in the seventeenth



only way to eliminate the problemof cheating. Although this reason-ing is not as illogical as most justi-fications of government, I wouldsay it overlooks the fact that withthe vast majority of social interac-tion external enforcement is simplynot an option. Whether we like itor not, most things cannot be con-tracted for, and government courtscannot be relied upon.

7

ECONOMICSIS A REALLY

INTERESTING

SUBJECT AND

THERE IS NO

REASON IT

NEEDS TO BE

MADE BORING

FOR STUDENTS.

is not to say that additional safetycould not be provided by the pri-vate sector, but I do think this ispretty descriptive of the world.

Government does little to respondto a problem until after it hasoccurred, so people are reallyunable to depend on any externalenforcement at all. Even in the

absence of external enforcementthere are incentives for coopera-tion. According to this view, gov-ernment police and courts aresuperfluous at best.

AEN: This line of thought seemslike a good example of appliedwork.

STRINGHAM: I would like tosee ever more applied work donewithin the Austrian theory. I have arecent paper coauthored with PeterBoettke that Bryan Caplan favor-ably refers to as economic ethnog-raphy. In line with Rothbard’s rec-ommendation that economistsshould create as accurate of adescription of an economy as possi-ble, we gather information fromvarious sources such as interviewsand the popular press.

I think this provides a much richerdescription of a market than aneconometric paper with a few sta-tistics. This paper attempts to showexactly what government ruleenforcers actually do. Rather thanenforcing rules in a way that some

government proponents imagine,the state enforces numerous rulesthat are contrary to economiclogic. I believe these types ofapplied articles are what are neededto start changing misperceptionsabout the benefits of government.

The area of law enforcement hasbeen so neglected by the vastmajority of economists that Ibelieve we have a lot to offer. Inthis area there are still hundreds ofarticles waiting to be written, eachof which can add something new. Ithink we really have the chance tocompletely obliterate the argu-ments in favor of socialized lawenforcement.

AEN: From a strategic and theo-retical point of view, what do yousuppose Austrians ought to avoid?

STRINGHAM: We should neverengage in sterile debates that fewpeople care about. Although lessrisky, this type of economics is notgoing to make any significantadvances and will lead others to



century, I found that governmentssimply refused to enforce mostcontracts, yet the market devel-oped quite sophisticated contractssuch as short sales, forward con-tracts, and options.

This is fairly representative of allsocial order; order precedes gov-ernment and only later can govern-ment claim to be keeping thepeace. Rothbard had a great lineabout how New Yorkers’ safetydepended solely on the peaceful-ness and good will of others. This

8

WE SHOULDNEVER

ENGAGE IN

STERILE

DEBATES

THAT FEW

PEOPLE

CARE ABOUT.

disregard the school as unimpor-tant.

Historically if we look at the econ-omists who have caught our atten-tion, it has been those who madebold conjectures. It is preciselythose economists whom we findworthwhile. Without making boldconjectures it is pretty much point-less since no minds will be changed.

I have a difficult time seeing themarginal value of an additional arti-cle about knowledge, spontaneousorder, and the market process.Each of these articles sounds sosimilar and even many of theirauthors maintain they are notsaying anything new, which iswhy I think many view that as adead research program. There is

no reason economics needs to con-tinually restate the same few argu-ments over and over, which is back-ward looking and certainly not theway Mises and Rothbard treatedeconomics.

AEN: And no doubt Mises andRothbard would agree with you.

STRINGHAM: Although I wasnot fortunate enough to meetMurray Rothbard, his life and workintrigue me. From his writings onecan tell that there were very fewAustrian economists in his earlydays, and although he could havegiven up and let the ideas fadeaway, instead he plowed forward.He took a long-run view, and nowa few decades later I think hisefforts are starting to pay off.

at Northwestern, I joined NeilMcCaffrey’s Conservative BookClub. Within the next few weeks, Ireceived their bulletin advertisingHuman Action, that the club calledthe magnum opus of some Austrianeconomist named Ludwig vonMises.

The advertisement featured highpraise for both the author and thebook, but I hadn’t heard of eitherMises or Human Action. It seemsthat it cost around $35.00, whichwas a lot of money for a college stu-dent in 1986, but it counted for tworequired book purchases.

I took the advertisement to my eco -nomics professor, Dr. Eric Elder,and asked him about the book. Hehad heard of Mises and said thatthe National Review had in the past



There is a solid generation of Aus-trians who are in the middle of theircareers and now there is the poten-tial for many more young Austrians.At this pace, Austrian economics isdestined to become more widelyaccepted and the focus of moreresearch than ever.

Rothbard was practically by him-self and there is only so much oneperson can do, but fortunatelytoday we have more Austrians thanever before so we can start doingin-depth studies on the ideasRothbard only had time to men-tion. Rothbard devoted his life toadvancing and propagating theideas of liberty and I am thankfulfor that. His approach, intellectu-ally and strategically, is a good oneto emulate on the way to winningthis battle of ideas.

9

SHAWN RITENOURShawn Ritenour (B.A., North-western College; M.A., Ph.D.,Auburn University) teacheseconomics at Grove CityCollege.

Interview with Shawn Ritenour

AEN: Before starting your Ph.D.work, you did time at the Depart-ment of Labor.

RITENOUR: Yes, and then, asLew Rockwell likes to say, I wentstraight. That was quite an experi-ence. I was assigned to train fieldeconomists to collect data for theOccupational Wage Surveys. Maybethat’s one reason I have no illusionsabout government economic data.

AEN: Did you have Austrian lean-ings at the time?

RITENOUR: I became interestedin Austrian economics before I evenknew it was a distinct school ofthought. When I was a sophomore

AEN

I WAS AWARETHAT NOT

EVERYONE

SHARED THE

AUSTRIANPERSPECTIVE,AND I FELTLIKE I WASGOING AGAINST

THE GRAIN.

was a challenge working throughparts of it. I’d pick it up, read some,and then put it down to try anddigest it. I also went to the collegelibrary to see if it had any otherworks by Mises. I remember check-ing out his collection of essaysPlanning for Freedom . I readthrough all of them while at collegeand became more convinced thanever that Mises was right. How-ever, I thought that was economics.

I didn’t know at the time that thebulk of the profession dismissedMises out of hand.

Other books by Mises also werepart of my development. While atthe B.L.S. for example, I read Mises’sBureaucracy and was astounded to seein practice every day the order mask-ing chaos that Mises explained. Dur-ing that time I also read Mises’s TheUltimate Foundation of Economic Sci-ence and was further convinced thatpraxeology is the best method foreconomics.

I remember being very impressedwhen in college I read a philo-sophic trilogy by Francis Schaeffer.I later went on to read HerbertSchlossberg’s Idols for Destructionand Gordon Clark’s A ChristianView of Men and Things , both ofwhich provide a firm Christiancritique of modern culture. Ishould also mention the writingsof J. Gresham Machen, particularlyChristianity and Liberalism, A Chris-tian View of Man, and his articles onsocial issues. He was a great con-servative biblical scholar who wasalso very much pro-liberty andpro-free market, and greatlyopposed to centralized, state con-trol of education.

AEN: All of this was during col-lege and grad school.

RITENOUR: I was aware thatnot everyone shared the Austrianperspective, and I certainly felt like Iwas going against the grain. But Ihave high regard for all of my pro-fessors at Auburn and they werevery cordial, obviously bright, knewmore than I did, and were encour-aging. They also were, by and large,very friendly to the free market.



had good things to say about him.That shows how far National Reviewhas come. He told me to buy it if Ihad the money. I did, and it was oneof the most profitable investments Ihave ever made.

AEN: But it’s tough going for anundergraduate.

RITENOUR: True, Human Actionis not an introductory text and it

10

CALENDARSUMMER WORKSHOP ON

ECONOMICS AND POLITICAL SCIENCEFridays, 10:00 A.M.

(see www.mises.org for detailed schedule)

ROTHBARD GRADUATE SEMINAR:THE ETHICS OF LIBERTY

July 28–August 2, 2002

MISES UNIVERSITYAugust 4–10, 2002

MISES INSTITUTE 20TH ANNIVERSARY:

“THE SCHOLARSHIP OF LIBERTY”October 18–19, 2002

AUSTRIAN SCHOLARS CONFERENCE 9

March 13–15, 2003

For more information,contact the Mises Institute518 West Magnolia Avenue

Auburn, Alabama 36832-4528Phone 334-321-2100

Fax 334-321-2119Email [email protected]

Website www.mises.org

The Mises Institute was also atremendous help, providing me anoutlet for further study and intel-lectual pursuits in the Austrian tra-dition. Being a Mises Fellow whileat Auburn was like getting anotherPh.D. I received one in profes-sional, neo-classical economics,and one in Austrian political econ-omy, which included economics,political philosophy, and ethics.

AEN: How should Austriansapproach grad school?

RITENOUR: Go in with the atti-tude that you are going to learn asmuch as you can, even if you do notagree with the main premises ofwhat you are being taught. A goodmainstream program can teach youa lot about price theory. Do not bearrogant. Be very respectful of yourprofessors. Understand that yourgoal is to successfully completeyour degree while at the same timelearning as much as you can. You’llrarely have a better opportunity tolearn what the profession has tooffer.

AEN: Now, to your current work.

RITENOUR: I would like to do acomplete analysis of art and cul-tural institutions from an Austrianperspective. For instance, it seemsclear from various reports I’ve readthat arts institutions that have beenmore economically minded havesurvived the recent economicdownturn better than those whoseem oblivious to economic law.

There is a fairly well developed con-ventional wisdom in academia thatadheres to the notion that the freemarket kills art and culture. This of

course was an issue even whenMises wrote The Anti-CapitalisticMentality, and it continues today.Someone needs to bring the pointhome that the market merely givespeople what they want. It doesn’t“dictate” anything.

AEN: At Grove City, with such astrong market tradition, you prob-ably enjoy the freedom to use Aus-trian materials in class.

RITENOUR: Certainly. I doevery semester. Most like the Aus-trian texts, even if some are morechallenging than those in otherclasses. This was also true at South-west Baptist University, where Itaught before coming to GroveCity. I recall that one of my stu-dents attended a conference wherehe met up with some students fromthe University of Virginia who wereenvious of him because he was ableto study Austrian economics as partof the main program.

At S.B.U. I was the only economistin the College of Business, whichwas very much free-market ori-ented. It was great. We were all onthe same wavelength and as I dis-cussed Austrian theory with them,they were almost always in agree-ment. Here at Grove City Collegethere is already an Austrian tradi-tion, so a lot of people here arealready familiar with Mises andgenerally approving of the freemarket.

This allows me to use high levelmaterial. Recently I’ve recom-mended Salerno’s “The Develop-ment of Keynes’s Economics:From Marshall to Millennialism,”from the Review of Austrian Eco-nomics, vol. 6, no. 1, and also

God, and who can thus think andact purposefully. I also would liketo do an extended study on theissue of art, culture, and the freemarket.

It appears that this type of analysisis becoming more popular within



Salerno’s “The Place of HumanAction in the Development of Mod-ern Economic Thought,” QJAE,vol. 2, no. 1.

AEN: What is your dream project?

RITENOUR: I’ll be starting itsoon: a principles of economics textfrom a distinctively Christian per-spective. It seeks to place econom-ics in the context of the Christianview of man made in the image of

11

THERE IS AGROWING

REALIZATION

THAT ECONOMIC

SCIENCE IS

HEAVILY

INFLUENCED

BY SOCIAL, CULTURAL, AND

RELIGIOUS

TRENDS.

Economics is a formal, theoreticalscience. However, because it focuseson the actions of humans, it is alsoheavily bound up with questionsabout morality, culture, and faith.This is especially true in the area ofeconomic policy. Austrians havealways been on the cutting edge, sowhy not here as well?

Interview with Peter Calcagno

AEN: Hillsdale seems to have pro-duced a number of good Austrianfaculty over the years.

CALCAGNO: It was here thatmy general interest in economicsbecame a specific interest in Aus-trian economics. In my principles ofmacroeconomics class, the professorwas making arguments against pro-tectionism and regulation in labormarkets and several people in theclass were in favor of protectinglabor. I found the professor’s argu-ments far more convincing.

At first I read several shortermonographs such as Mises’s Eco-nomic Calculation in the SocialistCommonwealth, Hazlitt’s Economicsin One Lesson, Rothbard’s What HasGovernment Done to Our Money? AsI studied, Mises’s Human Action

and Rothbard’s Man, Economy, andState became essential. However,Menger’s Principles of Economics hasalways been a favorite. Menger putso much in that small volume thatit is still a joy to read 130 yearslater.

AEN: Richard Ebeling, who wasteaching at Hillsdale, must havehad a big impact.

CALCAGNO: I can honestly saythat I am where I am today becauseof Richard Ebeling. Richardbecame a mentor and a friendintroducing me to Austrian eco -nomics and providing me with anunderstanding of the importance ofeconomic principles. He helped mein choosing a graduate programand encouraged me to study andunderstand mainstream theory aswell as Austrian theory.

I consider myself very fortunatebecause Hillsdale College has aLudwig von Mises Professor, aLudwig von Mises Lecture Series,and Mises’s personal library, so thisapproach was not controversial.Free-market theory is part of theinstitution, but I was willing to takethe arguments further than moststudents by espousing not just con-servative, but libertarian ideas.

AEN: What factors did you con-sider when choosing a grad school?

CALCAGNO: Since there are fewgraduate school programs thateven address Austrian economics, Ithink students interested in gradu-ate school need to be realisticabout these programs. GeorgeMason University is today the onlyPh.D.-granting institution where



economics. There is a growingrealization that, in practice, eco-nomic science is heavily influencedby social, cultural, and religioustrends. The field of religion andeconomics is starting to make realinroads in the profession. Even inthe history of thought, economictheory was first advanced bytrained theologians. The Positivistshave their own religious ideas,inherited from those who sought tocreate a “religion of humanity.”

12

ECONOMICS

IS HEAVILY

BOUND UP

WITH

QUESTIONS

ABOUT

MORALITY,CULTURE,AND FAITH.

PETER CALCAGNOPeter Calcagno (B.S., HillsdaleCollege; Ph.D., Auburn Univer-sity) teaches economics atWingate University.

AEN

one can formally study Austrian eco-nomics. The advice that was given tome by Sanford Ikeda, which Ifound valuable, was to seek out agraduate program that is known forthe field of study you are interestedin pursuing. For me that was historyof economic thought, which madeAuburn, which at that time had aPh.D. program, an easy choice.

The key to grad school for anAustrian is to find ways to incor-porate Austrian theory into yourresearch where you can. Whetheran entire dissertation can be Aus-trian depends upon the committee,but you could certainly incorporateAustrian ideas. I would recommendthat students try to find other like-minded students in their programfor support. Graduate studentswho are free-market oriented willbe willing to discuss different ideasand can often provide support out-side of the classroom.

AEN: Would you say that yourvocation tends toward research orteaching?


VOLUME 22, NO. 2 — SUMMER 2002 13

THE KEYTO GRAD

SCHOOL FOR

AN AUSTRIANIS TO FIND

WAYS TO

INCORPORATE

AUSTRIANTHEORY INTO

YOUR RESEARCH.

CALCAGNO: I like both, but myfocus has been on teaching fromthe very beginning. Professors hadsuch a major impact on my lifedemonstrating to me the impor-tance of liberty, property rights,and free markets. I wanted to havethat same impact on students.

Next spring I will be teaching aclass on the progress of the transi-tion to a market economy in theCzech Republic. This course willincorporate an analysis of the cal-culation debate and other Austriantheories. The students and I willvisit Prague at the end of thesemester to see the changes firsthand.

And this summer I have a researchgrant to work with a student on theprivatization of the steel industryin Romania. The student is fromRomania and understands firsthand the failure of socialism. Hehas become quite interested inAustrian economics (there is aMises Institute in Bucharest) andso we are researching the progress

deal written criticizing the main-stream public finance literature,the Austrian theory of publicfinance could be better formalized.The heart of it definitely exists inthe work of Mises and Rothbard,but there are issues where stategovernments have intervened inour lives that need to be furtheraddressed.

of privatization from an Austrianperspective. This project will pro -vide me the opportunity to bothteach and do research.

AEN: You have also shown a par-ticular interest in the relationshipbetween politics and economic the-ory.

CALCAGNO: I do think thatAustrians are working toward theirown version of public choice andpublic finance. Tom DiLorenzoand Randy Holcombe have donesome very good work in this area. Ithink the timing is right for it aswell. While there has been a good

AEN: What material do you use inclass?

CALCAGNO: I begin every prin-ciples class I teach with the firsttwo chapters of Hazlitt’s Economicsin One Lesson. They also areexposed to the calculation debateand the importance of entrepre-neurship via Mises and Hazlitt. Ijust finished teaching intermediatemacroeconomics where I usedRoger Garrison’s Time and Moneyas the main text. My government


AUSTRIAN ECONOMICS NEWSLETTER14

THERE IS ATEMPTATION

TO HIDE ONE’SAUSTRIANISM.MURRAYROTHBARDWARNED

AGAINST THIS.

and business class reads from Powerand Market and Antitrust andMonopoly.

My students are fairly receptive tothe ideas; however, they are notalways willing to take the argu-ment for a free market as far as itgoes. Many think they are takingthe free-market path when theysimply argue that government canimprove. Unfortunately, this viewis the conservative party line today.Many students see me as radical,and that’s fine.

I recently had one student in myintermediate macroeconomics classask me why the Austrian theory ofthe business cycle was not morewidely accepted, especially consid-ering that Hayek had won theNobel Prize. I had to explain tohim the lag between when a theoryis developed, such as ABCT in the1920s and 30s, and when a NobelPrize is awarded.

The work for Nobel Prizes is oftenpioneering, but in the case ofHayek, economics had taken such adramatic turn with the Keynesianrevolution that few people knewand understood the theory by thetime he had won. Fortunately, thetheory is still with us and I thinkgrowing in acceptance.

AEN: And yet the profession oftenregards Austrianism as little morethan a chapter in the history ofthought.

CALCAGNO: That’s true. Themainstream thinks “once upon atime” Menger developed the the-ory of marginal utility and Misesargued that socialism could notwork. But because they believethese ideas have been incorporated

into the mainstream, they see asmall role for an Austrian theorytoday. It’s true in some ways but inother ways, the profession is stillvery much behind where Mises wasin the 1940s. Mises’s works areinspiring for their range and depth,especially by comparison to mosteconomic literature today.

There is a temptation to hide one’sAustrianism. Murray Rothbardwarned against this. You fall intothe trap of not telling your profes-sors in grad school and writing adissertation that is consistent withthe mainstream. Then you hidebeing an Austrian when you inter-view for a job. Your plan may be tojump out at some point and revealyour shirt with a big “A” on ittelling them you are an Austrian,but it doesn’t work out that way.

Why? Because you need tenure. Soafter you are hired, you continue tohide your interests. By the timeyou have tenure, you may nolonger be interested, or fear thatyou have to keep up with the pub-lication track you have establishedto be successful in your career.

AEN: It does seem that it is becom-ing easier for Austrians to get by.

CALCAGNO: It does. I am notsure that we should go running upand down the halls shouting “I aman Austrian economist,” but I donot think we should shy away fromour interests. Given that my maininterest is teaching, I have not foundAustrian economics to be a conflictand actually found colleagues whoare familiar with and interested inAustrian economics. I think the keyis to be honest without beingunduly confrontational.

An area that interests me is stategovernment. State governmentsseem to be increasing their roles inour lives just as quickly as the fed-eral government. In particular theidea of states partnering with busi-ness is one that is ripe for Austriananalysis. These issues of privatiza-tion and regulation at the statelevel are perfect for applying andbuilding on Rothbard’s critique ofinterventionism. A lot has beenwritten on this issue, but not usingthe tools of Austrian theory.

AEN

Documents

Summer 2002 AEN - Mises InstituteThe Austrian Economics Newsletteris published quarterly by the Ludwig von Mises Institute. T HE A USTRIAN E CONOMICS N EWSLETTER Summer 2002 — Volume