Subjectivism and Economic Analysis: Essays in memory of Ludwig ...

SUBJECTIVISM IN ECONOMICS AND THE ECONOMYbest ordered as open and pluralist societies. This was a practicalappraisal, but also a moral judgement, for Ludwig Lachmann hadexperienced the consequences of a belief by the powerful that theyhad access to the truth, and was rightly disturbed by the evidence ofsuch belief among some of the most powerful within the professionof economics. He was correspondingly ready to acknowledge (in hisletter of 2 July 1989) that Frank Hahn ‘is really much too intelligentand sensible a man, and too good an observer of the academic scene,to be happy with neoclassical formalism’.Economic agents and economists are human, with human powers,human propensities and human limitations. By assemblingcomplementary capabilities in pursuit of a well-ordered plan, theycan achieve a great deal, but by attempting to assemble all thecapabilities of a society within a single plan they forgo manypossibilities. Moreover, those people who believe themselves capableof directing such a plan are almost certainly unfit for the task, bothintellectually and morally; and if they are not unfit when theyundertake it, they can hardly fail to become so. Co-ordinating amultitude of plans is very costly, never completely successful, andcontinually needs to be redone; and the process is marked by somespectacular failures, the penalties for which are distributed withoutmuch regard for merit. To make strong claims for pluralistic, opensocieties is to court disappointment; but it is reasonable to believethat they are less bad than any alternative. This, on my interpretation,was Lachmann’s view. He was an optimist without illusions.ReferencesChandler, A.D. (1992) ‘Corporate strategy, structure and control methodsin the United States during the 20th century’, Industrial and CorporateChange, 1:263–84.Fogel, R.W. (1964) Railroads and American Economic Growth: Essays inEconometric History, Baltimore: Johns Hopkins University Press.Keynes, J.M. (1936) The General Theory of Employment, Interest andMoney, London: Macmillan.Kirzner, I.M. (1973) Competition and Entrepreneurship, Chicago:University of Chicago Press.Lachmann, L.M. (1986) The Market as an Economic Process, Oxford:Basil Blackwell.Loasby, B.J. (1991) Equilibrium and Evolution, Manchester: ManchesterUniversity Press.Marshall, A. (1920) Principles of Economics, 8th edn, London: Macmillan.Ohlin, B. (1937) ‘Some notes on the Stockholm Theory of Savings andInvestment, Part II’, Economic Journal, 47:221–40.29