24 August 2016

Gross waste and inefficiency are kept in check by entrepreneurial activity


Karen Horn interviews Israel M. Kirzner, Professor Emeritus of Economics, New York University, New York City.

HORN: Professor Kirzner, one of your books is entitled “What is the economic point of view?”. That’s quite a foundational question. So please, tell us, what exactly is the economic point of view?

KIRZNER: Over the history of economics, there have been a number of different attempts to identify what we mean by “the economic point of view”. The perspective that I was endorsing in that book, perhaps implicitly rather than explicitly, was that the economic point of view focuses on the manner in which purposeful human beings interact and in this way make their choices in the market place. This is how we can distinguish the economic point of view from other points of view, the aesthetic point of view, the political point of view etc. All these other points of view approach society and social interaction from their own specific vantage point. The vantage point that we economists adopt is that we recognize that what happens in the social world is not haphazard, but it is the result of systematic chains of cause and effect that emerge when purposeful human beings with limited knowledge interact. They take advantage of opportunities made available by others and they in turn provide opportunities that may be taken advantage of by others. This is the way in which we “see” the phenomena of the social world.

HORN: The way how you describe the economic point of view seems to indicate that you don’t limit the scope of economics to commercial, monetary matters. Economics is a much broader approach.

KIRZNER: I think that is true. When you think of an earlier, quite classical attempt to identify the economic point of view, the attempt by Lionel Robbins, you’ll find the same observation there. Robbins’ definition of the economic point of view, which is widely adopted in neoclassical economics, sees the economist as focusing on the manner in which deliberate choices are made efficiently where individuals allocate scarce means among competing ends. Robbins made it quite clear that this perspective relates to matters that go far beyond the mere commercial and industrial activities that are very often associated with economics. The general approach to the economic point of view, whether you use a Robbinsian or a Misesian identification of it, does encompass much more than what is traditionally adorned with the adjective “economic”.

HORN: Given your interest in interaction, aren’t you bothered by the discrepancy between the Robbinsian focus on choice and the Misesian focus on exchange, which really is interaction?

KIRZNER: Interaction involves choices. Individuals make their choices based on the circumstances in which they find themselves. Obviously, in a society in which individuals are free to make all kinds of choices, the dimensions for interactions are much more multifarious than otherwise. In other circumstances, where there is a good deal of regulation and prohibitions, the scope of choice and interaction is limited. Choice and interaction go hand in hand because we choose between alternative options offered by others. One’s choice thus involves a specific interaction with someone else who is making an offer, or a bid. If I decide to rent an apartment, that entails interaction. If I decide to lease out to others an apartment that I own, that again entails interaction. The market, prices etc. are all aspects of interaction. But as you pointed out earlier, interaction also encompasses all kinds of interchange that are not usually understood to be part of economics.

HORN: But it seems to me that your approach focuses much more on the process of that interaction as a process, rather than on the equilibrium which this interaction will lead to, hypothetically.

KIRZNER: Interaction would also be involved in an equilibrium framework, but in a process, interaction assumes an additional dimension. What is happening during an interactive process is what Friedrich Hayek calls the learning, or discovery. That dimension of interaction would not exist in equilibrium. The emphasis on process is certainly central to my work. I adopted it from Mises and Hayek who have underlined the importance of expanding the economists’ attention from the results of the process to the nature and the character of the process itself.

HORN: Why is process so important?

KIRZNER: It is important for two reasons. First of all, it is important because if you interpret the world we observe as being in equilibrium that is factually incorrect. If you are trying to explain the existing world and you explain it by reference to an equilibrium pattern, then that would also be incorrect. That is the first reason why we should focus on process rather than on results. Obviously we must recognize that the world that we are trying to explain is a world that is in the midst of an ongoing process. Secondly, even if one were somehow or other to believe that the world is in equilibrium, surely the scientific requirement would be to explain how this equilibrium is reached. For that, one has to have a theory of process, a theory of what the course of the market would be and which is the direction, the shape and the way in which a market might conceivably approach equilibrium. These are two separate reasons, I think, which justify an emphasis on process rather than on equilibrium. Of course there are many other angles that could be explored, but I think that these would be the major points to explain why an equilibrium-only analysis of economic activity isn’t enough.

HORN: Nevertheless, in your famous approach to the role of the entrepreneur, you haven’t rejected the notion of equilibrium. Instead, you explain what the entrepreneur does and how this creates a movement in the direction of equilibrium.

KIRZNER: The entrepreneur is acting in a disequilibrium situation, in other words, he is confronted with prices that are not in equilibrium. He discovers divergences between prices of the same items or between prices of packages of inputs that can generate an output. When he finds that the inputs can be acquired at a price that is far less than the market price for the output, notwithstanding the costs of production, he discovers what is obviously a disequilibrium phenomenon. It is his discovery of that difference which provides us with the crucial explanatory link. Once you believe that you have discovered the divergences between such prices, you have discovered a potential profit opportunity, and that is what inspires, invites and lures the entrepreneur to act. That action is the prototype of all the actions in the market that we observe. We observe people buying and selling when they believe that they are buying at a lower price or that they are selling at a higher price. What moves them to do so is their interest in obtaining something for nothing, so to speak. The opportunity of pure profit they themselves to have discovered is what drives them to engage in actions. These are not the actions that would be taken in equilibrium, by definition. These are therefore process actions.

HORN: And they have an equilibrative effect.

KIRZNER: Not invariably. Entrepreneurial activity is very complex. An entrepreneurial activity in one part of the market may clash with an entrepreneurial activity in another part of the market. We cannot be absolutely confident that entrepreneurship will lead to equilibrium, although it is correct to say that there are powerful forces that tend to impose an equilibrative character on the outcome of entrepreneurial action. But it is entrepreneurship that drives the whole thing. In equilibrium, this process would cease immediately, but that doesn’t prove that equilibrium will inevitably result from entrepreneurial activity. Remember of course that any entrepreneurial activity in any hypothetical equilibrium situation is subject to the independent variables of the system, namely the technological possibilities, the availability of resources and the structure of consumer preferences. These are constantly changing parameters. That means that the hypothetical equilibrium position that one might be thinking about is continually changing. Entrepreneurial activities at any given time are taking place against such a constantly changing background.

HORN: But many economic theories depend on the assumption that markets have approached equilibrium.

KIRZNER: In order for equilibrium to happen, a complex multitude of activities have to take place every single day. And extraordinarily enough, a complex multitude of activities somehow do manage to take place. So apparently the market is working. That doesn’t mean that we will reach equilibrium, but it does amount to saying that the gross wastes and inefficiencies that are associated with the absence of equilibrium are somehow kept in check by entrepreneurial activity. In that sense, it is not entirely incorrect to say that entrepreneurial activity is equilibrative. Most economists believe that there is a large, powerful tendency for markets to cohere, and consequently for efficiency to emerge.

HORN: Let’s put it differently, then. Abstracting from possible clashes, entrepreneurial activity as you see it at least tends towards equilibrium, in contrast to the Schumpeterian “creative destruction” which, in his business cycle theory, is per se a disequilibrative force. Can these two types of entrepreneurship coexist, one tending toward equilibrium, the other away from it, or does one view exclude the other?

KIRZNER: I think that these ideas don’t exclude each other at all. They are in fact descriptions of the same phenomenon from different angles. In my book “Competition and Entrepreneurship” I have emphasized the contrast between the Schumpeterian entrepreneur who is disruptive and destroys an existing equilibrium by innovating, i.e. by creating a new product or a new method of production, and the entrepreneur whose activity tends to bring about an equality of prices. In other words, the initial disparity of prices is overcome when the entrepreneur buys low and sells high, pushing up the price at which the product can be bought and pushing down the price at which it sells.

HORN: Which is just a normal market reaction.

KIRZNER: Yes. This kind of entrepreneurial activity would tend to eliminate the discrepancy between prices; it would be equilibrative. In fact, there are two elements in entrepreneurship. There is indeed an innovative element in entrepreneurship, which could be described not only as creative, but also as disruptive, perfectly along Schumpeter’s lines. When an innovator comes in he is disruptive in the sense that he disturbs those people who haven’t realized that they, too, could innovative in this way. The invention of the automobile was in this sense disruptive for the horse and wagon industry. But it would be a mistake to claim that the transportation industry was in equilibrium before the innovator came around. The truth is that it was in a state of disequilibrium, and that’s my story. The technology to produce automobiles was present, the resources were present, the prices were set in a way that made it profitable to produce automobiles, so that the fact that the resources were flowing in other directions, including the production in the horses and wagon industry, was wasteful. The disruption which was part of the innovation of automobiles was therefore in fact equilibrative.

HORN: And what about the psychological features of the entrepreneur?

KIRZNER: Schumpeter and his followers have emphasized the creativity of the entrepreneur, the novelty of his ideas, his brashness and boldness, his willingness to take risks and so on. All this is true, and this is what you have to take into account if you are teaching at a school of management. But the economist who is trying to understand the consequences of the entrepreneur’s acting in a disruptive way has to recognize that he is in fact bringing about a more encompassing equilibrium. While the Schumpeterian entrepreneur does disrupt an existing calm situation, that calmness was in fact misleading. It was a result of ignorance. If two countries have the same resources available at different prices, this can go on for hundreds of years – until someone comes along and buys in the low-price country and sells in the high-price country. He is disruptive in the sense that the people who had earlier believed that they could buy at the low price no wake up to a higher price.

HORN: Again, because his demand drives the price up, the standard reaction in the neoclassical setting.

KIRZNER: The Schumpeterian entrepreneur disrupts the existing calm by taking advantage of a discrepancy between prices. By acting in this disruptive way, he is in fact bringing about a trend toward a uniform price in both countries, which qualifies as an equilibrative force.

HORN: There is another possible tension. Schumpeter’s approach allows us to think about innovation, while your focus on mere arbitrage means that we define away innovation – or don’t we?

KIRZNER: In the simplest framework of my 1973 book everything was there already, there was no innovation, that’s true. In that framework the entrepreneur finds items available at different prices in different markets and takes advantage of that. In my major work, however, the 1989 book “Discovery, Capitalism and Distributive Justice“, I pointed out that this is entirely consistent with innovation in a more Schumpeterian sense. There is nothing in the simplest entrepreneurial process that makes it inconsistent with complete novelty. One just needs to recognize that as an innovator, I can see things that don’t exist at all but could easily be produced, as the resources are easily available at a good price and there is a fair chance that the outcome is something consumers will be very happy with. Then I will innovate, and that, too, is arbitrage. It is arbitrage that involves the discovery of something new. Discovery in this sense means that one has realized an opportunity one hadn’t realized before, an opportunity to buy and sell a thing or an opportunity to produce a thing.

HORN: How exactly do we get from discovery to production?

KIRZNER: In production, you already know what you want to produce, and you know exactly how to produce it. A discovery is an economic activity through which you determine what it is that needs to be produced. What you discover may be something that existed earlier but was prohibitive because you had no idea how you could get the resources at a reasonable price. But it may also be something that wasn’t there before at all, a new gadget, a new technique. My work is not so much about the novelty aspect, but much more on the discovery aspect. But of course, every discovery brings about something that is in some sense new. The framework of entrepreneurship can encompass something that is completely new as well as something that is not.

HORN: How does this relate to Friedrich Hayek’s theory on the division of knowledge and the emergence of new knowledge, where decentralized knowledge, the price mechanism and competition combine in what he calls a discovery procedure?

KIRZNER: Hayek focused on knowledge and the competitive process as a procedure for the production of knowledge. There is nothing in Hayek’s theory that makes it inconsistent with an entrepreneurial approach. I remember lecturing in Freiburg one day in Hayek’s presence. I gave my usual talk on entrepreneurship and creativity. Hayek made some very kind remarks after my talk and he said: “Kirzner prefers to present this in terms of entrepreneurship – that’s ok. That’s his approach. But you can translate the knowledge approach into entrepreneurial language without really changing anything.” I think that’s correct. The two approaches are basically the same. You can emphasize pure knowledge and you can draw attention to the fact that it is the entrepreneurial element that drives the knowledge.

HORN: You often mention your teacher Ludwig von Mises. In which sense has he been important for you?

KIRZNER: Mises’ published works are not easy to grasp. I have to confess that it took me years to dig into that work and appreciate what he was trying to say. In this respect, Hayek was a much more skillful writer in his lucidity and clarity. Mises as a writer was not successful; maybe it was a language problem. Having said that, and having spent years trying to understand Mises in spite of this, it became clear to me that he did have a very profound and important set of understandings that needed to be made explicit. In my work, I have been trying to translate these basic Misesian ideas into language that I hope others can understand. There is very little in my work that is not already somewhere in Mises, and I’m always trying to give full credit to him.

HORN:  But what is it in your view that represents the essence of a Misesian understanding?

KIRZNER: In my graduate education, one night of the week I would be attending a course given by Mises, and another night of the week, I would be attending a price theory course given by a neoclassical economist by the name of Solomon Fabricant, and he used George Stigler’s textbook. And I had great difficulty reconciling what I heard on the one night with what I heard on the other night. In the world of Stigler, everything was adjusted or already pre-arranged, so to speak. The market was locked. It was an equilibrium arrangement, given the preferences of the human beings, given the availability of resources, given the technological knowledge available. There was only one set of activities that would be consistent with all of this, provided that people were free to make their own choices. That was strictly an equilibrium perspective, totally different from what I was hearing the night I was attending the other course. With Mises, it was clear that things were not locked into place yet; they were in a continual flux. It took me a long time to grasp that Mises’s image was an image of human action rather than of Robbinsian efficient decision-making. When Mises called his book “Human Action”, he unfortunately didn’t make clear what he was trying to get at.

HORN: What was it that he was getting at?

KIRZNER: What I think he was trying to get at was the insight that the decisions made by human beings go far, far beyond Robbinsian allocative decisions. In the Robbinsian framework, one starts out with given means and given ends. The manner in which one must allocate the resources to achieve the greatest volume of satisfaction of ends is merely a mathematical problem. Mises drew attention to the fact that human beings are not robotic Robbinsian decision-makers of this sort, but human actors. They are entrepreneurs in the sense that they determine the framework within which they make their decisions. Their actions determine that framework itself. In their actions, they declare what they believe to be the case and what they believe to be the opportunities available to them. Every human being acts entrepreneurially. By widening the perspective in this way, Mises was injecting in the understanding of economics a dimension which, for neoclassicals, is extremely disturbing.

HORN: Why?

KIRZNER: For neoclassicals, the entrepreneurial element is a nuisance, a pest, something they would wish to eliminate because it makes it difficult or in fact impossible for them to derive clear results. When people are free to see whatever they believe themselves to see, then they are not boxed in and bound to picking some particular maximizing outcome. In neoclassical economics, the key to understanding lies in recognizing that people are, so to speak, compelled to choose what they choose because they have to achieve a certain maximizing outcome, a point of tangency between an opportunity line and an indifference curve, simply because that is how they are programmed. All of that is implicit in the Robbinsian approach which became standard in neoclassical economics. Mises however never accepted that. He always understood that human action is entrepreneurial. He knew that, in his decision-making, a person is not merely choosing between whether he should be going north or south or east or west, but is determining that these are the directions available to him. It is this determination which is entrepreneurial because these directions are not given in the first place. The awareness of the resources available to him, just like the awareness of the goal that he considers worth pursuing, manifests itself only in the action itself.

HORN: What does that change?

KIRZNER: Once you grasp that it becomes clear how Mises’ understanding of the social interactive process differs drastically from the standard neoclassical model. In fact, what is an interference and threatens to abort the entire process of understanding according to the neoclassical model is in fact the key to understanding. This of course is the drastic contrast between Misesian economics and the mainstream. It took me a long time to grasp that, but when I did grasp that, I had to agree that the Misesian approach is clearly the more valid approach. When you point out to neoclassical economists that people act entrepreneurially, they just say that this complicates matters and therefore assume away the freedom of people to identify their means. They just assume that people know their means. Whereas for Mises, that is the source of explanation. The entrepreneur is the source of understanding.

HORN: What does all this mean for neoclassical economics with its focus on equilibrium? It seems that you are rejecting it as utterly useless.

KIRZNER: Let me make this entirely clear: by no means am I suggesting that standard neoclassical economics is useless or even worse than useless. In fact, I have often pointed out that if I had the opportunity of teaching one class – and only one class – to students who haven’t been exposed to economics before, I would chose standard supply and demand diagrams as an effective way of introducing them to some of the major elements of economics. Neoclassical economics is a gross oversimplification of the nature of the market process, but is certainly a useful simplification. I believe that simple supply and diagrams, even though they are full of intellectual errors and contradictions, are nonetheless it is a valuable tool in explaining fundamental economic realities.

HORN: Let’s turn to the question of subjectivism. In standard neoclassical theory, all analysis starts from individual preferences. Even macroeconomics is today an approach with strong microfoundational underpinnings. But does this injection of methodological individualism suffice in terms of a tribute to subjectivism?

KIRZNER: I agree with you that the microfoundations of macroeconomics have been methodologically individualistic. That is an advance over the more gross analysis that was dominating half a century ago. I do believe that there is an advantage in those methodologically individualistic foundations that many economists today understand and accept. But subjectivism can be understood in a different way. If one recognizes that individualistic foundation of all economic processes, then one has in a way recognized the subjectivism that governs those activities. I think that is true, but very often, methodological individualism tries to suppress some of the more disturbing aspects of subjectivism.

HORN: How does it do that?

KIRZNER: Historically, subjectivism was introduced into economics in the 1870s by drawing attention to the role of consumer demand. The earlier, classical economists had focused on physical reality, on the conditions of production as governing economic outcome. The neoclassical economists however, beginning with Walras, Menger and Marshall, then all drew attention also to the role of demand. This is what became the Marshallian synthesis of the supply and demand sides of the market. This new perspective did provide a very important place for the demand side of the market. All of that was certainly an advance. But subjectivism goes far beyond that. True subjectivism has to recognize that individuals in their choices are in fact operating in a world of imperfect knowledge. Their activities not only represent their preferences in a Robbinsian sense, which is the sense in which the goals and means are assumed to be fully known. The truth is that their decisions are made in a Human Action perspective, i.e. in a perspective where the future is unknown, as of course it must be. Even the so-called given means are not known with certainty, just as the goals are unknown, since you cannot be sure what consumers really want. That means that the activities of human beings cannot be meekly explained in maximizing terms. Subjectivism has to go beyond the Robbinsian maximizing framework and must also embrace the identification of what the relevant framework really is. In that respect I cannot credit modern neoclassical economics with being completely subjectivist. One other relevant dimension of subjectivism lies in the role of time. The way a subjectivist approaches questions of time is certainly different from the manner in which standard neoclassical economics approaches time. Summing up, I do think methodological individualism has come a long way, and that is healthy, but it hasn’t gone far enough in terms of recognizing the true implications of subjectivist insights.

HORN: You just mentioned time. Hasn’t time been a topic in economics ever since the phenomenon of interest came up? Inhowfar do you think that time is not taken in account in an appropriate manner?

KIRZNER: Most economists treat time as a kind of space. You have distance in time in the same way you have distance in space. All you need to identify a car in Detroit as being different from a car in New York is a space subscript in your equation. And you can explain the price differential between the two by reference to the cost of transforming a car, subscript Detroit, to a car, subscript New York, which of course involves the transportation. Economists usually proceed in the same way with time, including the whole phenomenon of capital and interest. Time is then just a subscript added to a good which is available today, next year, or was last year. Nothing really needs to be changed except recognizing that the date at which an item is available is important to identification for production purposes, for consumption purposes and so on. To some extent this is adequate, but it is still not enough to really understand capital and interest phenomena.

HORN: What is needed, then?

KIRZNER: A true subjectivist understanding of time focuses not on trends but on subjective distance. When I look at next year, I am looking at the future. But futurity is not quite the same thing as a difference between two time subscripts. Something is far away, something is close to me. As it gets further away, I see it in one way, and I see it differently as I approach it. That is where some thinkers in the Austrian tradition have achieved a much more complete understanding of time as a subjective element. One example is the time preference theory of interest; this is a dimension of economic analysis where the difference comes crucially into play. In this context, we use the concept of time in a futuristic sense: how far away from me is some future consumption, and how much do I value it now given that I can only get it in future. The point is not merely that ice in the summer is more valuable than in the winter. The point is that I have to wait until summer for ice to be available to me if I’m currently in the winter and only looking forward to the summer. As you can see, there is a fundamental difference between a spatial perception of time and a more subjective appreciation of it, emphasizing the perception that one has of different prospective enjoyments.

HORN: If individual perception plays such a great role, it becomes difficult to model a representative economic agent and to aggregate individual demand.

KIRZNER: I don’t see why we need a representative economic agent and why we should aggregate individual demand to understand prices and interest. Prices are determined at the margin. And the puzzle why interest emerges is a universal question. Even Böhm-Bawerk famously grappled with it – unsuccessfully. There are internal contradictions in his work. The problem is that he still stuck to the productivity angle, which is very unhelpful. Mises was the one who really clarified the role of time. His pure time preference theory denies that productivity plays any role in interest, which of course disturbed many critics.

HORN: And how about predictions? How do you predict prices or interest rates on that basis?

KIRZNER: Economic theory is not so much for predictive purposes, its real task is to help us understand and explain. I always remember the cartoon at some professor’s office door which says “Economics will not keep you out of the bread-line, but at least you will know why you are there”. That’s a very valid observation. In economics, we cannot predict what will happen or when it will happen. All we can do is understand and explain. But people of course look for control, and they look at science as something that would satisfy their desire to control things. If you recognize the importance of subjectivism, however, it is very unlikely that any real prediction can take place.

HORN: What do you think about modern behavioural economics? This approach explicitly moves away from the homo economicus rationale. Do you consider that a helpful approach?

KIRZNER: I think it is interesting work, and it may be valuable work. But it takes place at the level of application at most, not at the level of theory itself. No theory can predict what people’s attitudes are going to be in the future. Empirical work on people’s attitudes in terms of what people want to buy and what they want to avoid is important in applied work. Applied work is no doubt important but it is not theory. It’s nothing I ever wanted to do.

HORN: Much of economics is in fact applied theory today. What is almost completely missing at most universities, are courses in methodology and in the history of economic thought, which is a good start for people interested in theory as such.

KIRZNER: In the old days, any treatise of economics would begin with the history of the discipline at that time. The history of economic thought is something that was once very important in graduate education, but it has shrunk and eventually was lost. That is regrettable. It is important to know what these really brilliant earlier economists thought and why one may or may not be in agreement with them today. It is equally important to grasp how the older ways of thinking have evolved into more modern understandings. I am old-fashioned enough to think that the history of thought is necessary.

HORN: And how about methodology?

KIRZNER: As for methodology, I have always assumed that methodology emerges from the substantive work that economists do. Attention to the foundations of our work is indeed important, at least in the way you find it in the writings of Lionel Robbins or Frank Knight, for example. A lot of the foundations in Mises’ work are probably not important, at least not for understanding the bulk of Misesian work. As you can see, I’m somewhat ambivalent here. The truth is that I think I can know what methodology is not helpful, and I can recognize where people are going wrong. Writers like Fritz Machlup were very healthy in their understanding of what types of methods are useful and what types are not useful, but I myself have always found it more interesting to focus on the substance of the people’s work rather than on the abstract methodology which they claim to follow.

HORN: What advice would you give young students today?

KIRZNER: They should read widely, as widely as they can. They also need to recognize that economics is fundamentally a discipline which helps to understand and explain, and not so much to predict the future course of events. Understanding comes only through wide critical reading. At the same time, however, I am definitely not going to tell students that they shouldn’t engage in applied theory. Applications are probably going to be the most important extensions of economics in the future.

HORN: Do you have any topical recommendations for future research?

KIRZNER: I don’t believe it is possible to predict the problems that economists will be focusing on or should be focusing on. I don’t think you can make predictions on that either. I do however see scope for research on the ultimate equilibrative character of entrepreneurial activity. Maybe twenty years ago, one of my doctoral students at NYU wrote his Ph.D. dissertation basically arguing that entrepreneurship is going to be not disruptive, but ultimately self-frustrating rather than equilibrative. Another economist involved with NYU, Ludwig Lachmann, was also highly suspicious and antagonistic towards any claim that markets equilibrate. He followed George Shackle in this regard, considering that equilibrium was one of the worst ideas in economics and he believed that market activity was as likely to be disequilibrative as to be equilibrative. I don’t agree with him on that, but I do think more research needs to be done, more careful analysis needs to be done. The extreme subjectivism of Lachmann and Shackle needs to be critically analysed and discussed.

HORN: What do you think about interdisciplinary study programmes such as PPE (Philosophy, Politics and Economics)? Which neighbouring discipline would you opt for?

KIRZNER: An approach which puts attention to more than one field would indeed be useful and very healthy. I would be torn between philosophy and political philosophy. From the economic point of view, philosophy is essential in order to understand the emergence, the justification and the utility of property, for example, which economists then proceed to take for granted. As political philosophy will encompass much philosophy, I would probably go for the latter. But that’s just a hunch.

A German translation of this interview has been published in Perspektiven der Wirtschaftspolitik 17/2, 2016

Karen Horn is a German author, journalist and lecturer in the History of Economic Thought