The Viennese Students of Civilization: The Meaning and Context of Austrian Economics Reconsidered by Erwin Dekker

Abstract

Reviewed by: The Viennese Students of Civilization: The Meaning and Context of Austrian Economics Reconsidered by Erwin Dekker Michael Burri Erwin Dekker, The Viennese Students of Civilization: The Meaning and Context of Austrian Economics Reconsidered. New York: Cambridge UP, 2016. 215 pp. With its two central figures, Ludwig von Mises and Friedrich von Hayek, well-represented by biographical literature and intellectual histories, it cannot be said that the “Austrian Economists” are unfamiliar to English-language scholarship. Indeed, so well established is this branch of economic theory that it is possible to be labeled an “Austrian” in some academic departments without ever having set foot in Austria. Associated with laissez-faire economics and libertarianism, the Austrian Economists are also known to policymakers and politicians. The British prime minister Margaret Thatcher said that she always carried a copy of Hayek’s Road to Serfdom in her purse. In The Viennese Students of Civilization, Erwin Dekker seeks neither to introduce the Austrian school of economics, nor to bulldoze the current consensus readings of Hayek and Mises as thinkers of methodological individualism and free-market liberalism. His argument is, rather, that the historical, social, and political context of Habsburg and First Republic Austria, as seen from Vienna, significantly shaped the theories of the Austrian Economists. Today, an “Austrian” may never have set foot in Austria, but for Dekker, a greater understanding of the school of Austrian economics can be gained by examining its Austrian context. That context is one in which the Austrian Economists were greatly motivated by concerns about the future of their civilization. Here, prospective readers of The Viennese Students of Civilization might wonder if the term civilization in the title phrase will be too unwieldy to be applied critically. And indeed, the book does apply the term broadly. At times, for example, the Austrian Economists’ concern about “civilization” means the invocation of an apocalyptic infrastructural collapse that is equal parts Karl Kraus and the Hollywood disaster film. Thus, Dekker twice cites Ludwig von Mises’s prediction to a student as they strolled along the well-paved Ringstrasse that “grass will grow right here where we are standing,” while Joseph Schumpeter is presented describing his time as a finance minister in postwar socialist Vienna as helping the state to commit suicide (3, 89, 121). Elsewhere, however, the Austrian concern about “civilization” means an appreciation for continuity, where the achievements of civilization are understood as the product of “restraint.” Borrowing from Norbert Elias the sense of civilization as a process of increasing individual and social restraint, Dekker understands the Austrian [End Page 146] Economists to be working through a problematic of civilization in order to study economics. According to this reading, Hayek is not primarily concerned with the individual freedom that the market enables but rather privileges the market because it is a form of civilization that restrains, or disciplines, social and individual behavior. Of Hayek, Dekker observes, “Markets do not work because individuals are rational, but markets allow individuals to make rational choices” (89). Approaching the Austrian Economists as students of restraint and civilization, The Viennese Students of Civilization creates a context in which contributions in economic theory can be seen as contiguous with other intellectual currents in Vienna. This is a great strength of the book. Dekker notes, for example, how closely Hayek’s interest in civilization and restraint aligns with the work of Freud in Civilization and Its Discontents. Like Karl Popper and Hermann Broch, moreover, Hayek is said to have balanced his own skepticism about the certainty of knowledge and the prospects for the future with personal courage and a resolve to press forward. Dekker’s attention to the milieu of the postwar Austrian capital also suggests how trends in economic thinking were bolstered by “typically Viennese” means of intellectual association. Like other philosophical “circles” that convened in postwar Vienna (for example, the Geist Circle, the Kelsen Circle, the Spann Circle, and the Vienna Circle), the Mises Circle helped establish research premises, model behavior, and define a coherent intellectual agenda. Of course, members of the biweekly Wednesday Mises Circle connected with other circles, especially the Geist Circle. And it also engendered its own forms of camaraderie. Decades later, for...