Otto Neurath as an Austrian Economist: Behind the Scenes of the Early Socialist Calculation Debate

Abstract

Otto Neurath is well known as a founding member of the Vienna Circle, one of several points of origin of logical empiricism or neopositivism. While Neurath’s distinctive contribution to the philosophy of science and epistemology in general has come to be recognised after long neglect, his economic thought remains relatively unexplored. A striking fact has thus remained long obscured: Neurath is not the “positivist” economist one might expect. To throw this point into further relief, the question I want to explore here is whether and to what extent, if any, it makes sense to look at Neurath as an “Austrian” economist. Aware of the danger of treading a thin line between blatant absurdity and Pickwickian banality, my hope is that this way of proceeding will unlock some of the still topical originality of Neurath’s economics. What would seem to render my leading thought absurd is, of course, the acrimonious debate between Ludwig von Mises and Neurath (and later, mostly unpublished, that between Neurath and Friedrich August von Hayek). This early phase of the socialist calculation debate pitched Neurath very much against thirdgeneration representatives of the so-called Austrian School of Theoretical Economics. And what seems to render my leading thought Pickwickian is the unspectacular fact that Neurath was of Austrian nationality. It is true, of course, that he was a self-consciously “Austrian philosopher”, but that does not make him an Austrian economist in the relevant sense. Yet when we delve into the depths of the debate with Mises, things begin to look quite different. Concerning Neurath’s stance in that debate, interpreters are also faced with a puzzle. While Neurath possessed all along what I think is an excellent if longneglected argument against Mises’ claim that in the absence of a market there cannot be economic rationality, that argument does not establish what Neurath