Ludwig Lachmann

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Ludwig Maurits Lachmann (/ˈlɑːxmən/; German: [ˈlaxman]; 1 February 1906 – 17 December 1990) was a German economist who became a member of and important contributor to the Austrian School of economics.

Education and career[]

Lachmann earned his Ph.D. from the University of Berlin, where he was enrolled as a graduate student from 1924 to 1933. He first became interested in Austrian economics while spending the summer of 1926 at the University of Zurich.^[2] He graduated in 1930, and spent a few years to teach at the University.^[3] When Adolf Hitler rose to power in 1933, Lachmann moved to England. At the London School of Economics he was a student and later colleague of Friedrich Hayek, who held the prestigious Tooke Chair and looked for "allies in his battle against fashionable Keynesian theories". He deepened his interest in the Austrian School, and was one of the few who chose Hayek's side.^[3]

In 1948, Lachmann moved to Johannesburg, South Africa, where he accepted a professorship at the University of the Witwatersrand. He remained there until retiring in 1972. His student described his influence in South Africa as "quiet, limited and subdued", quite in contrast to his New York years.^[2] He served as president of the Economic Society of South Africa from 1961 to 1963.^[4]

Austrian School revival, New York City, 1974-1987[]

Between 1974 and 1987, Lachmann traveled to New York City each year and collaborated on research with Israel Kirzner who intended to reinvigorate the Austrian school. One result of this collaboration was the 'Austrian Economics Seminar', organized by Lachmann as visiting professor at New York University each winter semester from 1975 to 1987.^[2] He was on residence there with his wife for four consecutive months, returning to South Africa in between for 12 consecutive years. A 1974 conference on Austrian Economics at Royalton College, in South Royalton, Vermont featured Lachmann, Kirzner, and Murray Rothbard, who challenged prevailing Keynesianism, attracted 50 participants^[3]:373​ and led to a 1976 book publication "The Foundations of Modern Austrian Economics".^[5]

On economics[]

Lachmann grew to believe that the Austrian School had deviated from Carl Menger's original vision of an entirely subjective economics. To Lachmann, Austrian Theory was an evolutionary, or "genetic-causal" approach, as opposed to the equilibrium and perfect-knowledge models used in mainstream neoclassical economics.^{[citation needed]} He was a strong advocate of using hermeneutic methods in the study of economic phenomena.^[4] Lachmann's "fundamentalist Austrianism" was rare as few living Austrian economists departed from the mainstream. He underscored what he viewed as distinctive from that mainstream: economic subjectivism, imperfect knowledge, the heterogeneity of capital, the business cycle, methodological individualism, alternative cost and "market process". His brand of Austrianism now forms the basis for the "radical subjectivist" strand of Austrian Economics.^{[citation needed]} His work influenced later, American developments of the Austrian School.^[4] Lachmann was a close friend of and closely aligned intellectually with (though they disagreed on some finer details) fellow Austrian Economist Israel Kirzner.^[6]

To commemorate Lachmann, his widow established a trust to fund the Ludwig M. Lachmann Research Fellowship at the Department of Philosophy, Logic and Scientific Method of the London School of Economics.^[7]

Contemporary social science research[]

Lachmann's ideas continue to influence contemporary social science research. Many social scientific disciplines explicitly or implicitly build on the subjective theory of value, developed by Carl Menger and the Austrian School of Economics.

Books[]

• Uncertainty and liquidity preference. (1937).
• Capital and Its Structure, 1956, mises.org.
• The Legacy of Max Weber, 1971, mises.org.
• Macro-economic Thinking and the Market Economy, 1973, mises.org.
• From Mises to Shackle: an essay on Austrian economics and the Kaleidic society. In: Journal of Economic Literature 14 (1976), 54–62.
• Capital, Expectations and the Market Process, 1977, mises.org.
• The flow of legislation and the permanence of the legal order. (1979).
• The salvage of ideas. problems of the revival of Austrian economic thought. (1982).
• L. M. Lachmann (1 August 1986). The Market as an Economic Process. New York: Basil Blackwell. p. 173. ISBN 063114871X.
• Austrian Economics: a hermeneutic approach. (1990).
• G.L.S. Shackle's place in the history of subjectivist thought. (1990).
• D. Lavoie (editor): Expectations and the Meaning of Institutions: Essays in Economics by Ludwig Lachmann. Routledge, London/New York 1994.

See also[]

• Kaleidics

References[]

Further reading[]

• Ludwig M. Lachmann (1977). ""In Pursuit of a Subjectivist Paradigm" [Introduction]". In Walter E. Grinder (ed.). Capital, Expectations, and the Market Process. Kansas City: Sheed, Andrews, and McMeel, Inc.^:3–24​ (Biographical aspects)
• Israel Kirzner, ed. (1986). Subjectivism, Intelligibility and Economic Understanding. Essays In Honor of Ludwig M. Lachmann On His 80th Birthday. Basingstoke: Macmillan. ISBN 0-333-41788-7.
• David L. Prychitko (1994). "Ludwig Lachmann and the Interpretive Turn in Economics: A Critical Inquiry into the Hermeneutics of the Plan". Advances in Austrian Economics, Vol I: 303–319.
• Rudy van Zijp (1995). "Lachmann and the wilderness: on Lachmann's radical subjectivism". The European Journal of the History of Economic Thought: 412–433.
• Callahan, Gene (2004). Economics for Real People: An Introduction to the Austrian School (2nd ed.). Auburn, Alabama: Ludwig von Mises Institute. pp. 349. ISBN 9780945466413. (on Lachmann's view of government)
• Peter Lewin (1996). "Time, Complexity, and Change: Ludwig M. Lachmann's Contributions to the Theory of Capital". Advances in Austrian Economics. 3.
• Nicolai J. Foss; Giampaolo Garzarelli (2007). "Institutions as Knowledge Capital: Ludwig M. Lachmann's Interpretative Institutionalism" (PDF). Cambridge Journal of Economics. 31 (5): 789–804. doi:10.1093/cje/bem003. hdl:11573/443525.
• Paul Lewis; Jochen Runde (2007). "Subjectivism, social structure and the possibility of socio-economic order: The case of Ludwig Lachmann". Journal of Economic Behavior & Organization. 62 (2): 167–186. doi:10.1016/j.jebo.2005.03.009. S2CID 144482207.

External links[]

• Critique on The History of Economic Thought Website, cepa.newschool.edu
• "The Kaleidic World of Ludwig Lachmann," Review of The Market as an Economic Process by Roger Garrison, Critical Review vol. 1, no. 3 (Summer), 1987, pp. 77–89.auburn.edu
• "The Lachmann Legacy: An Agenda for Macroeconomics," Roger Garrison