austrian-economics

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I visit Austria

Hallstatt

I’d love to, again, but this time it was Austrian economics.

I know very little about Austrian economics, or economics in general, for that matter. Boyd majored in the subject for his undergraduate degree at Iowa (1951), and perhaps you can detect an economic underpinning in his discussions of Soviet revolutionary strategy (Patterns 67-68) and guerrilla warfare (Patterns 90 – 98 and 107 – 109).

It’s also worth noting that he did have at least one book on Austrian economics in his collection:

F.A. Hayek; The Fatal Conceit: The Errors of Socialism, edited by W.W. Bartley III, University of Chicago Press, 1988 annotated

“Annotated” means that he scribbled in the margins and probably on the front and back pages.

With all that in mind, Hunter Hastings, whose LinkedIn description is “Value creation processes built on the principles of Austrian economics,” just published a podcast of our discussion on Boyd and entrepreneurship on his Value Creators Podcast:

As I mentioned in my last post, Hunter and Mark McGrath have written a paper on the many common points between Austrian economics and Boyd’s strategy.

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Actions of Individuals: Boyd and Austrian Economics

Wikipedia defines “Austrian economics” this way:

The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivations and actions of individuals and their self interest. Austrian school theorists hold that economic theory should be exclusively derived from basic principles of human action

In his first (and as far as I know, only) paper, “Destruction and Creation,” Boyd observed that:

Studies of human behavior reveal that the actions we undertake as individuals are closely related to survival, more importantly, survival on our own terms. Naturally, such a notion implies that we should be able to act relatively free or independent of any debilitating external influences—otherwise that very survival might be in jeopardy. In viewing the instinct for survival in this manner we imply that a basic aim or goal, as individuals, is to improve our capacity for independent action.

So, as you can see, there is potential for considerable overlap between the two philosophies.

In a recent paper, “Orientation: Bridging the Gap in the Austrian Theory of Entrepreneurship,”
Hunter Hastings and Mark McGrath point out some of these. Let me give you one example:

The paper introduces the concept of orientation as the source of entrepreneurial judgement. Orientation shapes observation and precedes decision-making and action. Orientation is the locus of human preferences and biases; it is the origination source of hypotheses; it is where human cognition resides. It is the source of “human thinking, perceiving and knowing”, and of “a person’s conscious adjustment to the state of the universe that determines his life.” Decisions and action flow from orientation. We trace the pathway to the concept of orientation that is well-established in the writings of Ludwig van Mises and many more Austrian school economists

This is a significant paper, and I recommend it highly. In my next post, I’ll report on a podcast that Hunter and I just made. In the meantime, you might check out Mark’s conversation with me on his “No way out” podcast.