I wanted to expound a bit on one of Dr Boettke’s recent posts which attributed economic calculation as the critical contribution of the Austrian School. In Boettke’s publication on economic calculation he lays out his position in the great homogenization debate which has rifted scholars between allegedly Misesian and Hayekian lines. In addition to the role of economic calculation as a case for homogenizing Mises and Hayek’s contributions on socialist calculation, Dr. Boettke makes an additional point which has gone more unnoticed in the calculation v. knowledge squabbles of the internal Austrian circles. The second case for homogenization that Boettke makes draws on a notion from post-modernism (relax, it’s not without caveat). His point is that to truly understand the message behind an author’s work it is helpful to recognize the context in which he is writing. Boettke says the following succinctly, “Mises wrote to a wider audience and for the ages, Hayek wrote for a particular time and place and to a narrow specialist audience.” Probably more unnoticed is the footnote to this quotations which says the following:

Thus, the intellectual context of their respective arguments was different. I am willing to admit with postmodernist writers that knowledge is always contextual. Where I differ with postmodernism is that I insist on the distinction between ontological and epistemological statements, which is sometimes blurred in certain traditions of postmodernist writings. Just because one admits from an epistemological stance that all knowledge is contextual, it does not follow that an ontological reality (independent of that context) does not exist. I can insist that an objective reality exists, yet admit that our human ability to present representations of that reality is limited. It is this philosophical “middle ground” position which accepts the critique of scientism, yet holds out hope for reason and evidence to improve our understanding of the world that, I would contend, has been an underlying theme within Austrian circles since its founding by Menger. For the purposes of this paper these broader philosophical issues are not directly relevant. What I am concerned with is identifying the different context of Mises’s and Hayek’s argument. Mises wrote primarily to answer a nineteenth and earlier twentieth-century political economy of socialism, Hayek wrote primarily to answer a twentieth-century technical economics argument that socialism could achieve efficiency in the same way that formal models of the market suggested capitalism did. Of course, Mises and Hayek had arguments to offer concerning each others respective context, and it is here that the point of comparison must be made. In other words, what matters in assessing the respective contributions of Mises and Hayek on the issue of socialism is to put each argument in its respective context.

First, I think the contextual insight could be used to strengthen the link between more scholars than just Mises and Hayek. I think substantial links can be made between Lachmann and Mises, and Kirzner and Mises as well. A good place to find support for Lachmann’s case would be his essay in Towards Liberty (edited by Mises) and his view that the conceptions of equilibrium which he is describing were first explained by Mises, but the intended opponent of the essay are full-blown general equilibrium theorists. When taken out of this context of confronting GE theorists it does seem like Lachmann is somewhat of a nihilist in regards to equilibrium in general, be he, like Mises wants to describe a force rather than a state or condition and it is this point which drives his description rather than absence itself.
I don’t mean to stir up the homogenization debate, nor the socialist calculation debate. I’ll admit that economic calculation is the heart of the Austrian contribution which is mostly exposed in these debates but I am also of the opinion that the socialist calculation debate isn’t the have all be all that people make it out to be. The ideological climate of today’s controlled and regulated market and the long rotting corpse of all out soviet planning makes me wonder if a different front isn’t worth more attention? In this sense I’m not afraid to say that I think an intellectual gold mine lies in more in-depth research focused on the potential and implications of an anarcho-capitalist political economy. And it is in this view of political economy that I think Boettke’s contextual argument may have a further path to walk. Two distinctions that I think could help from such a perspective would be first, the distinction between Natural Law Rothbardians and Friedman type contractarians. The second distinction would have to be full blown open anarchists on the one hand, and more subtle polycentrists on the other. In particular as I have noted earlier I think strong lines of reasoning can be bridged between the work of Vincent Ostrom and the Austrian School.
More recently I read Ostrom’s essays on polycentricity parts I and II (found here). Ostrom describes the three arenas for polycentric structures to be applied as (1) entry and exit, (2) enforcement, and (3) production and interpretation of law. While Ostrom is clear as to how polycentricity stands to enduce market forces in the first two arenas, he gets wishy washy in his radicalism on the thrid. To be honest I couldn’t be happier that Ostrom neglected to apply market forces to law, instead he depicts law as a completely mental process, or issue of rightness rather than incentives. I disagree with this presentation entirely, but it forces the reader to recognize that polycentricity for polycentricity’s sake doesn’t mean anything. Having 12 people debate a rule rather than 5 doesn’t ensure that the conclusion will be any more right. Instead it is the uniquely Austrian contribution of economic calculation (the operating forces of property, prices, profit and loss) that is the real benefit of polycentricity.