Excellent, at least where the author is writing in his domain of expertise

books:


	• Vienna and Chicago, Friends or Foes?: A Tale of Two Schools of Free Market Economics Mark Skousen Capital Press, 2005 - 318 pages average customer review:based on 11 reviews view larger image
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highly recommended

A fascinating topic, well told

A very good book. The history and the theories of the Austrian School and the Chicagoan School written in a very plain and understandable way.
Economics made easy and enjoyable. Many thanks to Mark Skousen for making the dismal science a lively and fascinating subject.

Austrian vs. Chicago School: Who You Got!?

In this book Mark Skousen compares and contrasts the ideas of the two most prominent schools of free market economics. That is, the Austrian School (Carl Menger, Eugene Bohm-Bawerk, Ludwig Von Mises, Friederich Hayek, etc.) and the Chicago School (Milton Friedman, George Stigler, etc.) This book is an invaluable resource to any fan of free market economics who seeks a more in depth understanding of the intellectual history behind this subject.

Mark Skousen, a prolific, pro-free-market economist and writer, is a highly qualified individual to take up this important task. He has authored over 20 books on this subject, has studied free market economics in depth and has had extensive contact with both Milton Friedman and Friedrich Hayek.

From reading this book, you will not only get a nice overview of the history of free market economics including brief discussion of the important roles of precursors such as Adam Smith and Jean-Baptiste Say but you will also understand the finer points of both the Austrian view and the Chicago view. In particular, you will obtain a thorough understanding of the issues on which both schools passionately disagree, including their contrasting views on monetary policy, the cause and effect of business cycles and most importantly, what each school views as the proper methodology for obtaining economic truths.

The only shortcoming of this book that I noticed is very minor but will be of importance to a few readers. For an individual as well versed in free market thought as Mark Skousen, he often displays a clumsy understanding of the philosophy of Ayn Rand. For example, in this book, Skousen parenthetically comments how Ayn Rand would describe Immanuel Kant's concept of reason as "objective" reason. However, those who have studied the ideas of Ayn Rand knows that she has vociferously rejected the analytic-synthetic dichotomy of Immanuel Kant, which amounts to saying that reason is utterly useless in discovering truths in what Kant calls the noumenal world (that is, an unknowable world that exists independent of our consciousness). However, this should not detract from this fantastic book he has written.

I recommend this to anyone with a strong interest in laissez-faire economics and who wants to understand the finer but important contrasts between the ideas of the Austrian School and the Chicago School. If you are interested in the history of economic thought, I also recommend Mark Skousen's "The Big Three in Economics".

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A Useful Comparison

The Austrian and the Chicago schools of economic thought have both made important contributions to our understanding of economics. Dr Skousen has, in an understandable and entertaining manner, presented these contributions to the general reading public.

I thought Dr Skousen was very game in suggesting that the Mises Institute had a siege mentality when it came to the defense of the Austrian school. I would also suggest that their partisan position is actually hindering further research and developments based upon the Austrian paradigm.When you regard your leader or school as been the final repository of truth and wisdom, where can you go from there? This may be one reason why most Austrian economists find it so hard to get good positions in top universities. They are regarded by their peers as being closed minded!

I also thought this book so good I gave it away to one of my graduate students who was leaning towards the church of Keynes. This book helped save him!

A great buy and a great read!

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Excellent, at least where the author is writing in his domain of expertise

This book is a lovely addition to the history of economic thought, and aptly describes the modern 'methodenstreit' between the Austrian and Chicagoan schools. Skousen fails only in one regard: his understanding of Misesian apriorism is horrific. Granted, Mises was not clear enough and reintroduced arcane terms into his exposition on method (i.e. rationalism vs empiricism; see on this the source 3, provided below) that have largely obfuscated his contributions, and indeed some of his writings were incorrect. However, even an undergraduate in Economics myself with a modest understanding of praxeology can see massive holes in the author's understanding. Austrians emphasize the value and necessity of theory in interpreting data which has no voice of its own. Contra Skousen, they do not disregard history or empirical evidence. That is nonsense, and his writings on Mises show an utter misunderstanding (he does not even sufficiently disentangle Mises from Ricardo and other classical economists.) It is praxeological theorems (e.g. law of demand) that are necessary to approach statistical data, and formulate complete economic theorems, and are themselves logical truths. It is a common misunderstanding that Austrians completely disregard empirical data, and I was hopeful that Skousen would not repeat it - yet he does, and more ineptly than usual even. Economists serious about understanding the Austrian School comprehend this. It was Mises' position that neither mathematics nor statistics can yield praxeological truths. This does not mean that math and statistics can't be useful in understanding particular historical episodes (in fact the author realizes this -as did Friedman,- when he makes reference of faulty studies going counter to economic wisdom, which were later corrected by theoretically informed economists.) Nor does it mean dogmatic adherence to "broken" theories, which lack explanatory power (which are a signal either of faulty deduction or induction.) Rather than relegating Mises -whose theorems largely stand correct- to the status of crank, Skousen could've put more effort into understanding Mises. He is right to laud Austrians for engaging in more empirical studies, wrong in his understanding of what the Austrian method is. Empirical studies, statistical methods and graphs are wonderful tools in relaying information and insuring that our theories possess explanatory power, all of which Austrians have put to use without compromising their stance on praxeological theorems. He also misrepresents Mises' position on free will, which at most is compatibilist (http://www.mises.org/books/ufofes/ch3~4.aspx)

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Other than this and some minor errors, the book is great. The author skilfully recounts the birth of both schools, and provides a balanced assessment of their respective strengths and weaknesses, where he is equipped to do so (he is best on the business.) For a brief history of free market economics (and economics more generally), this book is excellent; for a philosophical treatise on method in Economics, it ought to be avoided. Readers will appreciate the author's exposition of certain basic concepts of economics in his work.

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Excellent historical look at the two free market schools

Those interested in economic history as well those who sympathize with the Chigaco or Austrian Schools will find this to be a great read. A great explanation of what free market economics means to two different schools.

reviews: page 1, 2, 3

In his new book, Vienna and Chicago, Friends or Foes? economist and author Mark Skousen debates the Austrian and Chicago schools of free-market economics, two schools in constant, heated disagreement in their theories of money, business cycle, government policy, and methodology.

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