EPE, Viennese Students of Civilization, and the Research Agenda for Austrian Economics
A new volume in the Elgar Research Agenda series, "A Research Agenda for Austrian Economics," was recently published. Edited by Steven Horwitz and Louis Rouanet, the volume delves into various themes within economic studies that have become focal points for economists of the Austrian School.
Reflecting upon its publication, I was drawn to revisit my chapter on the relationship between entangled political economy and Erwin Dekker’s reinterpretation of Austrian Economics as a study of civilization. Today, figures like Carl Menger, Ludwig von Mises, and F.A. Hayek are predominantly associated with the study of markets. EPE, conversely, seeks to restore political economy as a study of society—it is an exploration of the bidirectional relationship between institutions and the social interactions that generate them. The standard interpretation of Austrian economics as a study of market processes suggests only a modest overlap between their contributions and the EPE program. However, Dekker's perspective suggests that the legacy of these thinkers extends far beyond this standard interpretation. They were, in essence, students of civilization—"the norms and institutions that regulate human interactions." Embracing Dekker’s viewpoint illuminates the profound connection between the contributions of the Viennese and Richard Wagner’s efforts to advance spontaneous order theorizing using modern tools of complexity and network theories.
In my chapter, I analyze their shared origins and the resulting commonalities, along with potential paths for future research. However, upon revisiting my work, it struck me that the crux of these programs lies in their mutual recognition of societal complexity. It's this complexity that delays and distributes feedback, making learning from social experiments difficult, if not impossible.
Recognizing social complexity, the Viennese believed the threat to liberalism was intrinsic. They understood that the civilizing forces that foster freedom demand restraint. The restraint is a burden—a strain of civilization, which Dekker describes as “the responsibility individuals bear for their own choices, the acceptance of powerful social forces such as the force of competition, the necessary restraint of our instincts, and the submission to norms that we do not fully comprehend” (p. 190).
For the Viennese, the strain of civilization was the price that had to be paid to preserve the liberal social order; it was a feature of life to be accepted with gratitude for the civilization it enabled. Their understanding of the dual nature of civilizing forces was grounded in intellectual humility that came with the distinction between the knowledge of civilization and the knowledge from civilization. The latter is often tacit, making institutions impossible to replicate. Given the often elusive nature of tacit knowledge, the strain of civilization invites challenges against liberal institutions. The allure of freedom without strain is hard to resist.
By delaying and distributing the feedback from social engineering, institutional complexity creates an illusion that escaping the strain is possible. Yet, when the restraining forces, such as market competition, are diluted, the freedoms they support are compromised. Moreover, weakened restraints can lead to practices that further undermine liberal values, with even less acceptance for the remaining burden. One is left wondering, can liberalism ever escape regime drift?
