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

4LACHMANN ON THESUBJECTIVISM OF ACTIVEMINDSRoger KopplIntroductionLudwig Lachmann cast a spell. Almost, as it were, against your will,this modest and amiable man would induce you to change yourthinking radically. He carried an unpalatable message that most ofus, at first, wanted to reject. But for many of us the message camethrough in the end. When Lachmann first came to participate in theAustrian revival of the 1970s, few Austrians found his messagehospitable. But when he left this group with his much grieved death,many of its most creative thinkers, most perhaps, were won over tothe general contours of his position (Vaughn 1994).What produced this great personal achievement of Lachmann? Itwas not, I think, his solution to any economic problem, but hisidentification of one. The problem Lachmann drew our attention towas the need for a theory of expectations in which each person’sactions are animated by the spontaneous activity of a free humanmind. I will call the problem of building a radically subjectivisttheory of expectations, the ‘Lachmann problem’.It is not obvious how such a thing is to be done. How can I let theagents of my model be free and still predict anything—even withinthe model! If we take seriously the ‘subjectivism of active minds’, weseem to fall into the horrible pit of open possibility with no ladderupon which to get out. This, we have been told, is nihilism.I think there is a way out. We can combine the radical subjectivistattention to human thoughts with a more ‘objective’ understandingof the evolution of rule-governed action. Doing so may permit us to61