The Two Ludwigs: Mises, Lachmann, and the ongoing Methodenstreit in the Austrian School of Economics

Abstract

In Lachmann (1978a) it is argued that the subjectivist revolution, as initiated by Menger, has not run its full course. We take up on that suggestion, and explore the debate between the Misesian branch of the Austrian School, which emphasizes logical analysis and currently dominates the School, versus its hermeneutical branch led by Lachmann, Lavoie and others, which seems to be on the defensive. Firstly, both Mises and Lachmann are discussed, secondly, their motivations are compared, thirdly, hermeneutics is explored in depth. The conclusion is that it does not seem to be a very viable avenue of research, and instead, some research on perception and psychology is discussed. If subjectivism is to be extended, it will most probably not be through hermeneutics.