AUSTRIANS AND POST KEYNESIANS: THE QUESTIONS OF IGNORANCE AND U NCERTAINTY
GREGORY M. DEMPSTER
Uncertainty in Economic Thought. Edited by Christian Schmidt. Cheltenham, U.K.: Edward Elgar, 1996
hat makes Austrian economics distinctive in relation to other schools of thought? Various aspects such as subjectivism, praxeological method, and the absence of modeling have been put forward as “defining characteristics” of the school. And, since they are not mutually exclusive, each has considerable merit, for each is an attempt to grasp the essence of a “core” concept that distinguishes the Austrian approach from the formulaic, deterministic, and positivist approach of the mainstream. In this article, we will attempt to demonstrate that the Austrian method of dealing with both theory and history is informed by its perspective on uncertainty as the core concept uniting the various characterizations of Austrian thought. Furthermore, we will argue that the Austrian School, among modern schools of thought, possesses the most realistic perspective on uncertainty and its role in the functioning of the economic system. The occasion for this article is a review of Uncertainty in Economic Thought, edited by Christian Schmidt (1996). The book is a collection of articles, primarily by continental economists, presented at a 1993 symposium of the Charles Gide Association for the Study of Economic Thought. Austrian scholars interested in the subject matter will benefit not only from its discussion of the shortcomings of mainstream economics in this area, but even more so from articles that present the essential elements of the two most prominent non-mainstream approaches: those of the Austrian and Post Keynesian Schools. It is the relationship between these two non-mainstream approaches that will be the focus of this article.1
GREGORY M. DEMPSTER is assistant professor of economics at Hampden–Sydney College. 1 Other economists of Austrian orientation have researched the...