Unblocking Progress in Austrian Economics: Response to Skousen

Abstract

Skousen is to be congratulated for creating an entirely new con- cept in economics, GO. There are not many social scientists of whom such a claim can be made, so this constitutes a gigantic accomplishment on his part.

There are other instances of this phenomenon: Menger, Aus- trian Economics; Rothbard, libertarianism; Buchanan and Tullock, Public Choice; Coase and Posner, Law and Economics; Milton Friedman, monetarism, the negative income tax, school vouchers; Wenzel, Private Property Society. Of course, we all stand on the shoulders of those who came before us. None of these people invented anything entirely out of the whole cloth. There are always predecessors for all scholars. For example, the School of Salamanca in many ways foreshadowed Austrian economics. But the fact that Skousen can even be mentioned in such august company is an indication of his creativity. Of course, there are many and serious reservations that can be launched at some of these,1 and Skousen is no exception to this rule, as I show in this present response.

The present paper is a rejoinder to Skousen (2017) which was, in turn, a critique of Barnett and Block (2016), hence “BnB”. It is organ- ized as follows, and I pattern my response to Skousen accordingly:

A. Skousen reiterates his position. B. He takes to task BnB on the following grounds. 1. BnB maintain that GO has taken the profes- sion by “storm”, and these authors err in this assertion; 2. Skousen attributes to BnB the claim that Austrian economists must reject aggregate data and upbraids BnB for this; 3. he reiterates his posi- tion on the “consumer spending” myth; 4. Skousen thinks the BnB critique of the Hayek triangle is misplaced; 5. BnB maintained that Skousenʼs GO amounts to no more than measuring vertical inte- gration; Skousen demurs; 6. BnB charged him with double count- ing; Skousen attempts to rebut this charge. I follow this organization of Skousenʼs interspersed with my commentary. In section III, I reiterate several criticisms of BnBʼs, on which Skousen has failed to comment. I conclude in section IV.