Ludwig Lachmann
Encyclopedia
Ludwig Lachmann was a German
economist who became a member of and important contributor to the Austrian School
.
from the University of Berlin, where he was enrolled as a graduate student from 1924 to 1933. He first became interested in Austria
n economics while spending the summer of 1926 at the University of Zurich
. Lachmann moved to England from Germany in 1933, and it is when he was at the London School of Economics
in the 1930s as a student and colleague of Friedrich Hayek
that he further developed his interest in the Austrian School
. In 1948, he moved to Johannesburg, South Africa, where he accepted a professorship at the University of the Witwatersrand
and would live out the remainder of his years.
's original vision of an entirely subjective economics. To Lachmann, Austrian Theory was to be characterized as an evolutionary, or "genetic-causal", approach against the equilibrium and perfect knowledge found in mainstream Neoclassical economics
.
Lachmann's "fundamentalist Austrianism" was rare—few living Austrian economists saw their work as departing 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.
His work was highly influential upon later, American developments of the Austrian School.
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 LSE.
He was also a strong advocate of using hermeneutic methods in the study of economic phenomenon.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
economist who became a member of and important contributor to the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
.
Education and career
Lachmann earned his Ph.D.Ph.D.
A Ph.D. is a Doctor of Philosophy, an academic degree.Ph.D. may also refer to:* Ph.D. , a 1980s British group*Piled Higher and Deeper, a web comic strip*PhD: Phantasy Degree, a Korean comic series* PhD Docbook renderer, an XML renderer...
from the University of Berlin, where he was enrolled as a graduate student from 1924 to 1933. He first became interested in Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
n economics while spending the summer of 1926 at the University of Zurich
University of Zurich
The University of Zurich , located in the city of Zurich, is the largest university in Switzerland, with over 25,000 students. It was founded in 1833 from the existing colleges of theology, law, medicine and a new faculty of philosophy....
. Lachmann moved to England from Germany in 1933, and it is when he was at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
in the 1930s as a student and colleague of Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...
that he further developed his interest in the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
. In 1948, he moved to Johannesburg, South Africa, where he accepted a professorship at the University of the Witwatersrand
University of the Witwatersrand
The University of the Witwatersrand, Johannesburg is a South African university situated in the northern areas of central Johannesburg. It is more commonly known as Wits University...
and would live out the remainder of his years.
Lachmann on economics
He grew to believe that the Austrian School had deviated from Carl MengerCarl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
's original vision of an entirely subjective economics. To Lachmann, Austrian Theory was to be characterized as an evolutionary, or "genetic-causal", approach against the equilibrium and perfect knowledge found in mainstream Neoclassical economics
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
.
Lachmann's "fundamentalist Austrianism" was rare—few living Austrian economists saw their work as departing from the mainstream. He underscored what he viewed as distinctive from that mainstream: economic subjectivism, imperfect knowledge, the heterogeneity of capital, the business cycle
Business cycle
The term business cycle refers to economy-wide fluctuations in production or economic activity over several months or years...
, methodological individualism
Methodological individualism
Methodological individualism is the theory that social phenomena can only be accurately explained by showing how they result from the intentional states that motivate the individual actors. The idea has been used to criticize historicism, structural functionalism, and the roles of social class,...
, alternative cost and "market process". His brand of Austrianism now forms the basis for the "radical subjectivist" strand of Austrian Economics.
His work was highly influential upon later, American developments of the Austrian School.
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 LSE.
He was also a strong advocate of using hermeneutic methods in the study of economic phenomenon.
Lachmann and Contemporary Social Science Research
Lachmann's ideas continue to influence contemporary social science research. Many social scientific disciplines explicitly or implicitly build on "radical subjectivist" Austrian Economics.Books
- Capital and Its Structure, 1956.
- The Legacy of Max Weber, 1971.
- Macro-economic Thinking and the Market Economy, 1973.
- Capital, Expectations and the Market Process, 1977.
- The Market as an Economic Process, 1986.
External links
- Critique on The History of Economic Thought Website
- "The Kaleidic World of Ludwig Lachmann," a review of The Market as an Economic Process by Roger GarrisonRoger GarrisonRoger Garrison is a professor of economics at Auburn University, Alabama and adjunct scholar of the Ludwig von Mises Institute....
- "The Lachmann Legacy: An Agenda for Macroeconomics," Roger Garrison