Review of Austrian Economics, 13: 221–223 (2000)
2000 Kluwer Academic Publishers
(1999) What do Economists Contribute? (New York: New York
University Press/The Cato Institute). 156 + xvi pp., ISBN 0-8147-4722-1
How should economists participate in society’s decision process? How can a profession
devotedto increasingly esoteric abstraction assist laypeople indecidingonaimsofeconomic
activity and resource allocation? Daniel Klein has collected an impressive set of essays by
an impressive set of economists who address these and related issues.
In the view of Klein and his authors, the profession has produced a crisis for itself.
The discipline’s practical application and raison d’etre is in guiding public policy, but in a
democratic society the most economically knowledgeable are rarely elevated to decision-
Furthermore, the profession rewards, even demands, ever-increasing mathematization,
formalism, and abstraction, rendering much of modern economics useless for addressing
policy, and the rest incomprehensible to laypeople.
The profession has already attained a level of subspecialization and formalism that makes
the majority of contemporary literature incomprehensible to the majority of contemporary
economists, let alone laypeople. This trend shows little sign of abating. In 1942, Frank D.
Graham described most economic research as “assiduous dust-gathering,” and one wonders
how he might react today.
Austrians have no monopoly over concerns for the profession’s orientation and evolution,
but these have always been particular concerns of the Austrian School, dating back to the
methodenstreit. Menger devoted the ﬁrst book of the Untersuchungen (1883), and Mises
devoted the last section of Human Action (1949), to many of the same issues. Several essays
in this volume are by avowed Austrians.
Klein contributes an interpretive introductory essay tying the collection together. He
notes the practitioner of political economy is not the economist, but the everyman, the
voter or policymaker unschooled in contemporary technical economics, or even in the less
fashionable common-sense economics of Adam Smith and others.
Because less sophisticated, less formal, less mathematical economic rhetoric can be
understood and used by intelligent laypeople, it provides the only vehicle for the profession
to engage the political decision process. Unfortunately, the profession rarely performs this
kind of economics today, and rewards it even more rarely.
The profession has responded by retreating into peculiarly arid formalisms, surrender-
ing whatever inﬂuence it might have had over political economy. We are mute in policy
discussions, and if we spoke up we would not accomplish much because much of what
the profession has to say is trivial or incomprehensible, or frequently, both. Matrix algebra
and overlapping-generations models cannot frame arguments persuasive to outsiders. Our
inability to communicate effective rhetoric renders our conclusions irrelevant. And for the
most part we accept this status quo.