Gadamer and Austrian Economics: The Hermeneutics Debate Revisited

Over the past couple of years I’ve been very grateful to participate in various events with the Institute for Humane Studies in Washington, D.C. Although the IHS does stand in a particular tradition of economic thought (they claim the label “classical liberal,” but use the term rather loosely), they organize what I think are some of the best venues for debate about political thought and economics that are available to junior scholars and graduate students. This November, I’ll be presenting a paper at a research colloquium at IHS about the so-called “hermeneutic turn” in the Austrian School of economics in the late 1980s and early 90s. Here’s the abstract:

Gadamer and Praxeology: The Hermeneutics Debate Revisited

The so-called “hermeneutical turn” that divided the Austrian School of economics in the 1980s and 90s was, in large part, a failed enterprise. Although significant figures such as Don Lavoie wrote favorably of the great hermeneutician Hans-Georg Gadamer and his relevance for the Austrian science of praxeology,[1] these voices were drowned out by the rather vitriolic polemics of David Gordon and Murray Rothbard—who together combined their efforts to render the debate an unfortunate non-starter. In recent years, even those who agree that the resources of philosophical hermeneutics have the potential to offer a sound philosophical foundation for praxeology do not see the “practical difference” (as opposed to merely a “philosophical difference”) that such resources could make in debates within the discipline of economics proper. In this paper, I will attempt to answer both this stronger charge—that hermeneutics is hostile to praxeology—and the second, weaker charge—that claims made in hermeneutics are practically insignificant for the discipline of economics. Each of these accusations, I will argue, operates upon a misunderstanding of Gadamer’s understanding of truth, which, if understood properly, reveals a deep continuity with the enterprise of Austrian economics and a structural critique of non-subjectivist approaches to economic activity. Ironically, this debate shows that the epistemological presuppositions of these critics—not Gadamer—remain implicated in the mechanistic or positivistic theories of human action that the Austrian theory was always supposed to overcome.

Students who are interested in economics and other areas of political thought should consider attending some of the IHS’s many events in and around D.C. It is good fun and there is a lot to be learned by all—including those who disagree with some of the fundamental ideas represented by the leadership there.

 


[1] The term praxeology simply refers to an economic methodology that begins by assessing the nature of human action, as opposed to positivist or mechanistic definitions of “rationality” that are abstract by nature.

 

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