 Our guest this week is none other than our own Dr. Joseph Salerno, the academic vice president here at the Mises Institute and a long-time professor of econ at Pace University in Manhattan. Joe recently was honored by several of his former students in a collection of essays dedicated to him entitled The Next Generation of Austrian Economics. So we thought it would be a good time to sit down with him and get his thoughts on the health and the vitality of the Austrian school, his role over the years in growing the field, his relationship with and memories of Murray Rothbard, some of the persistent factions in the Austrian movement and what the future might fold for a whole new generation of Austrian economists who are now in their late 20s and early 30s. So if you're interested in Austrian economics generally, the work of Joe Salerno or if you've ever thought about an academic career as an economist, this show is for you. Stay tuned. Ladies and gentlemen, welcome back once again to Mises Weekends. I'm your host, Jeff Deist, sitting today as promised with none other than our own Dr. Joe Salerno. Joe, so first, congratulations on recently being honored with this volume of essays. I think some of our listeners will be familiar with certain of the contributors names like Philip Boggess, David Howden, Pair Bieland, Matt McCaffrey, Matt Michai is also included. So if we will, let's start with them. Compare for us the landscape for young academic economists today who consider themselves Austrian with what you face coming up as a PhD in the 70s and 80s. Are their prospects considerably better today? I would say that their prospects are greatly better than ours were. Right now, there are a number of universities and programs that accept Austrian thinking as part of the mainstream. Now, that's not mainstream economics, mind you, that those are in areas of entrepreneurship and management, strategy, and even in parts of marketing Austrian reasoning is accepted. In mainstream economics, however, you still have the formal modeling that's highly mathematical. So we're not accepted in large research universities. However, having said that, Austrians are known for being good teachers. So there are also many opportunities in smaller liberal arts schools where formalistic modeling isn't a requirement of research for getting tenure. So you can write in journals that are open to other types of economic discourse and method in those schools and still receive tenure and still have a very fulfilling career as an economics teacher. But it sounds like you're saying in certain ways, being identified as an express proponent or at least a sympathizer of the Austrian school can still be a hindrance to some in terms of career opportunities or advancement. I wouldn't so much say that being an explicit Austrian is a hindrance because you shouldn't in any case wear your Austrianism on your sleeve. What I am saying is that Austrians don't tend to pursue the type of research that gets you tenure at mainstream large research universities. So you're not discounted for just being an Austrian today. In fact, it's not something that you should really put on your resume. I mean, you should be open about what research you're doing. And in many cases, Austrians are now and now, now more and more avoiding the term Austrian in their research, not that they don't see an Austrian theory of money. They talk about an aspect of money. I think that is part of our strategy. That is that we want to displace the mainstream. We don't want to set up a separate little school of economics. We're moving into the mainstream. We want to pervade it and we want to eventually supplant their methods with our methods. And of course, presumably the average economist who considers themselves Austrian friendly is probably not going to be as deep or spend their day involved as much in modeling or econometrics, right? It's just sort of a natural flow of what interests them. That's true. And then you have even mainstream economists who are beginning to really rebel against this overemphasis on formal modeling. And every paper has to have a little model and then it has to be tested. They're trying to break out of those constraints and that's all to the good. What do you say generally to young people who ask you today, should I get a PhD? Should I go into teaching? Should I try to have an academic career? Well, I first asked them what their goals are. And to those who say or who respond that, well, it's an academic career, my first piece of advice is go to the best school that you can get into. If you can handle the math, go to a mainstream school and then supplement that by staying very close to the Mises Institute and work and coming and visiting and going to the events at Mises and coming and taking advantage of our fellowships and also writing for our journals. But at the same time, to learn the mainstream uvra, the works that you're supposed to learn and to learn how to use their methods. Now, there are other people that cannot handle the math, the very high level math that is demanded nowadays. So in that case, you can go to other programs where they can get master's degrees here in the U.S. And there are opportunities overseas with Guido Holstman at the University of Ange, for example, and other places where you can go and get your PhD without too much mathematical immersion in math. Well, it's interesting, isn't it? Because I have had friends in master's programs thinking about a PhD in E. County and it has really become incredibly rigorous math. I mean, there are a lot of Asian students who come to the U.S. and it's really almost like getting a PhD in math. In fact, if you have a student that is seriously interested in going on for a PhD in economics at a mainstream school in the U.S., then I advise them to either major in math or take a second major in math or at least minor in math. But I don't think a minor is enough or even major in physics because of the mathematical techniques that are used in theoretical physics and then maybe have economics as a second major. But everything you learn in undergraduate economics, even in a mainstream program, is all thrown out in graduate school. You use different models, different levels of mathematical sophistication and so on. Well, let me ask you a question on behalf of all of us who aren't academics. You mentioned the role of teaching. How did this perverse system arise that seems to reward publishing in obscure journals over any actual passion for teaching students? I think it arose after World War II. There was a revolution in economics during World War II in which economists, actually in World War I, they began to work for government but then they enjoyed that experience in helping plan the war economy during World War I and they saw that there was a lot of income available to them in those jobs, a lot of prestige, and so they pushed more for government jobs and of course the great depression then opened up jobs for economists to come to Washington to fix the problem. And then World War II, the total war effort that was expended in World War II, demanded economists because they were good statisticians and because they were very familiar with quantitative analysis. And so it was here that economics programs began to change. After World War II, they became much more handmaidens of economics that would be used in government and that kept that brought the government grants flowing and so that's where the money was. In downplaying teaching and playing up the role of research, to the point where today, economists, most prominent economists rarely teach very much in the classroom, maybe one class a semester. And you get really graduate students teaching your sons and daughters for $100,000 a year that you spend on college. Of course, it's research and publishing that leads to tenure. But what about this question of tenure? On the one hand, a lot of free market advocates want to abolish it. But doesn't the concept at least have some merit, the idea of having independent, true-seeking scholars in society? To some extent, it has merit, especially where the schools are publicly owned and they can arbitrarily dismiss people. The profit motive doesn't matter. It doesn't matter how good a teacher you are, how much revenue you could generate that way. On the market, however, if that glorious day dawns when education is completely separated from the state, at that point, independent colleges and universities will decide if tenure is really something that's economically feasible. I don't think it would be. I think schools, even public schools, are moving away from it now. In fact, they are. They have positions for professors that exclusively teach, for example. They call them clinical professorships. And they're not tenure. They're just rolled over. You get contracts of two, three years, whatever it is. So it's a very costly system. It's a very inefficient system. You get a lot of dead wood in the system of people who don't do research or teach well and who are just there serving time. Right. Of course, look at the rather shabby treatment of giants like Mises and Murray by academia. Speaking of Murray, go back to the 1970s, if you would. Tell us a little bit about your relationship with Murray, how you came to meet him, how he influenced you on a personal and on a professional level. I started reading Murray in college and it was interesting because I was a junior in college and I was an economics major. I always knew I wanted to be an economics major from the time I read Adam Smith in high school and John Kenneth Goldbraith, who I couldn't understand. But so I went on. And by my junior year, I read an article, a very famous article, in the Sunday New York Times magazine. And the article was on the radical right, a new alternative or something like that. And Murray Rothbard's name was mentioned in there as an economist, as sort of the mentor of this movement. And I had never heard his name and having had taken three years of economics. In any case, I used to hang around with some conservative students that were associated with Young Americans for Freedom, the Buckleyite organization. And I mentioned Murray's name and the student pulled out a small little mini book called Economic Depression, Cause and Cure and handed it to me. And so I read it in about 45 minutes. It was a very small book. And everything became clear to me. I mean, having taken intermediate macroeconomics, principles of macroeconomics, I still didn't really know what the cause of recessions were, what was the real cause of inflation. Murray explained it in a small pamphlet. And from that point onward, I became an Austrian. In any case, when I graduated, I enrolled in a graduate program at Rutgers University, which, much to my benefit, was not a completely mainstream program. We had left-wing post-Cainsians. We had a Hugh Rockwoff, who was a student of Milton Friedman and was one of the first to write on free banking. We even had a student of Arthur Laffer, who was a supply sider. So it was a pretty diverse program. We even had a Marxist, who was Schumpeter's last graduate assistant. So they were very open to me and to what I had to say. So I was very comfortable in that program. In any case, I also became the vice president of the New Jersey Libertarian Party in my first year in graduate school. And we invited Murray to give a talk. And when he came to give the talk, at only $75, I might add, I was the vice president. So I was the one who was in charge of escorting him around. He asked me what I did. I told him I was a graduate student in economics. He immediately perked up and he began searching around for a pen, which of course he could never find. So I handed him a pen and he wrote out a certain number for me to call. And he said, he took my name and address and so on and my phone number. And that Monday, a group of people that had a reading group, Austrians, called me up. And that was Richard Fink and Walter Grinder, some of the old members of the old Libertarian movement back in the 70s. And I immediately joined the reading group. And I became friends with Murray over the years. We became very close friends. Well, what great fortune on your part. I've had that happen. I be willing to bet that the grad econ program at Rutgers today is far less diverse in terms of faculty. You're absolutely right. It's become almost completely mathematical. There are a few economic historians left there. In fact, they were the ones who mentored our up and coming student, Patrick Newman. So you rock off is still there. The guy was written on Free Bank, as I mentioned. But yeah, it's much less diverse today. It's a regular mainstream program. So as we move forward here, you attended the now infamous South Royalden Conference in 1974 gathering that in some ways symbolize the resurgence of the Austrian school. You've later said that you think the earlier publication of man economy and state really was part of that resurgence, even though that was about 10 years earlier. Looking back now, tell us what you think the conference meant for econ and for the broader Libertarian movement. Yeah, I want to address when the revival was. So yes, it was this great conference in June of 1974. There are about 30 attendees. The speakers were great. They were Ludwig Lachman, Israel Kersner, as well as as as Murray Rothbard. And the participants were mainly graduate students, like me, and the few young PhDs who already had jobs. So during during the flush of the excitement of that conference, we all thought, well, this is the beginning of the resurgence of Austrian economics. The first time we were all isolated before that no one knew one another. Few of us knew Murray. I literally that the summer before was sitting in a I had a job as a janitor at AT&T and I would get my work done very quickly. And I would read America's Great Depression sitting in a closet. I mean, so I was literally isolated. I was alone in the closet reading an Austrian book. So it was great to have all that camaraderie. So for many years, I like others thought that well, this was the beginning of the resurgence. And then, of course, that October of 74, Hayek got the Nobel Prize and that really cemented this renaissance of Austrian economics. But then, as I grew a little bit older, I looked back and I said, no, wait a minute. How did everyone get there? Was this, you know, you hold this conference and they shall come? Was it like like the the baseball movie? And in fact, it wasn't when I think back, and I've written on this, everyone who came to that conference had read Man economy and state. America's Great Depression was government done no money. They were to the to the man and woman because Karen Vaughn was there. They were Rothbardians. Israel Kursner's very influential book only came out in 1973. It is competition entrepreneurship. So that really didn't have it. I mean, it was very, very much talked about. But that wasn't the the that didn't consolidate the movement or bring the movement towards some sort of coalescence at this conference. It was really Rothbard's works. So I date the Austrian resurgence to the enormous productivity that Murray showed in the early 1960s. Now, at the conference, did you and the other attendees view Milton Friedman as a star at the time or just another attendee? No, we all, I mean, we all knew him. We all knew what a prominent economist he was. And, you know, we did see him as a store as a superstar in the economics profession, though most of us did not agree with him. But he did show up first at the conference and we were all crowded around him. And then Murray Rothbard later showed up and needless to say, there was some bad blood up between them because Murray had written just a few months before in his Libertarian forum that he wrote an article entitled Uncle Milty Rides Again in which he called Milton Friedman an inflationist for supporting idea of indexing incomes during a period of inflation. So basically giving into inflation as a fate of complete. So Milton Friedman was not very happy about that. So we were going over to Milton Friedman and he was telling us that Murray called him an inflationist and this is totally unjust. And Murray, when we go back to Murray and Murray said, why is he even here? It's an Austrian conference and he doesn't believe in Austrian economics. So there's a famous story at the dinner, Milton Friedman was asked to give a few remarks and he closes remarks by saying, there's no such thing as Austrian economics. There's only good economics or bad economics. So of course we all hissed and booed. So even though we thought he was a star in some sense, so you know, we didn't think much of his views. Maybe he was right though. Is Austrian economics the term properly understood just a loose term of convenience to describe a pretty broad range of thought or pardon the pun here, is there Austrian orthodoxy? Well, let's start with the first part of that question. I think that was a loose term that was adopted after the South Royalton Conference to designate this movement. I mean the Austrian school, Mises never used the word Austrian except in parentheses, in quotation marks, when he was talking about Bombavirk and Menger, his own teachers. He really believed that all the Austrian insights had been absorbed into what he called modern economics. That's not what the mainstream would call modern economics. And Murray also, even in as late as the 1960s, the main economy and state referred to the Austrian school really as a chapter in the history of economic thought. So it was only a term of convenience that was adopted. And unfortunately, when it was adopted, as you pointed, you asked me the question about orthodoxy, there was no orthodoxy. Even at South Royalton, you saw three different views of the market being given by Rothbard, Lachman and Kersner. So if you go back and read those essays with what we know today, the essays in the Ed Dolan book on the foundations of Austrian economics, you'll find very, very different views expressed by all three of them. So there was already a lack of complete agreement on some of the basics. So when did you first become aware of the term Austrian school or Austrian economics? I really only became aware of the term. I had heard it once as an undergraduate in the history of economics thought course in which they said, well, these three great guys who worked together to develop this idea of marginal utility, that really got my curiosity up because I remember the professor was saying that this is one of the few times intellectual history in which three independent thinkers worked together, in some sense, collaborated to develop this view of economic theory. So I was interested in that. And then when I read the article in the New York Times Weekend Magazine that they also referred to Murray Rothbard as an Austrian school or as someone who supported the Austrian tradition. So that's when I heard it. But it wasn't widely used until really after South Royalton. Well, I wonder if we overuse it or abuse it. Yeah, at this point, I think it's outlived its usefulness except for the fact that, you know, there is some inertia there. I mean, how people know us as Austrian economists. So we can't really get away from the term, but we can only be very careful in the way we use it. We can point out that there are different versions or strands of Austrian economics. And that's what my program, part of my research program, has been to disentangle those strands, to de-homogenize Mises and Hayek, Kursner, Rothbard and Lachman. Joe, thank you so much for a fascinating and I will say wide-ranging interview. Ladies and gentlemen, have a great weekend.