I discovered Brian Loasby by accident as I was browsing the shelves of a college library. Being generally interested in institutions and evolution, I was attracted by the title of his 1999 book; “Knowledge, Institutions and Evolution in Economics.” It turned out to be a challenging read. Indeed, this book is the only one I have read four times. Nowadays, I assign it as one of twelve books in my Ph.D. seminar course, and students tend to find it much more difficult than the two books that precede it (Schumpeter’s Theory of Economic Development and Kirzner’s Competition and Entrepreneurship). Loasby’s texts are not only difficult because of their density of ideas; they are also difficult because they combine ideas that are not usually combined.
It goes without saying that Loasby does not belong to any single school of thought. And yet his thinking is remarkably consistent in its subjectivism. While radical subjectivism is usually associated with Ludwig Lachmann and George Shackle, I would argue that Loasby’s subjectivism is at least as radical. Sometimes I even find him too extreme (and being criticized by me for being too extreme a subjectivist is quite a feat). For example, Loasby has stated that policy implications offered by economists are almost always unfounded. I’m not at all convinced by this, but maybe the difference between me and Loasby is that I believe that institutions stabilize expectations to a greater extent than he thinks (he is more Shacklian — institutions make people march together in an arbitrary direction – while I am more Lachmannian — some such institutional directions are more likely to spread because they promote survival and material accumulation).
In spite of this reservation, I wholeheartedly recommend Loasby for providing numerous insights. His discussion of economists’ conventional treatment of evolution deserves to be considered a classic (Alchian made some minor mistakes which led to greater mistakes by Friedman and even greater ones by Becker). His notion that the history of economic thought is not a history of continuous progress but rather a sequence of confused detours down blind alleys punctuated by the occasional brilliant insight is spot on. And his analysis of entrepreneurship is a very creative combination of ideas from Schumpeter, Kirzner, and Popper.
Indeed, it is in his wide-ranging knowledge of economic ideas that Loasby’s thought becomes most challenging, since the reader is not likely to be as erudite as the author (I assume here that I’m a typical reader, which is not necessarily true). A typical paper by Loasby may discuss topics as different as Adam Smith’s observations about the development of astronomy, Menger’s view of the emergence of money, Marshallian economics, Hayekian psychology, the philosophies of Popper and Ryle, Penrose’s resource-based view of the firm, Chamberlin’s theory of monopolostic competitipon, and Shackleian surprise functions. His criticisms of various economists may not even be noticed by the uninformed reader, since they often take the form of understated but nonetheless lethal asides. His endorsements are also somewhat vague, and can usually only be identified as such by an absence of parenthetical observations that subtly undermine the theory in question. Loasby’s own conjectures and hypotheses are similarly elusive: he has a penchant for what I would like to call “carefully considered and precise imprecision.”
The conclusion is that reading Loasby can be a very rewarding experience, but only if one is patient and shares some of his disillusionment with mainstream economics. In particular, I would recomment the above-mentioned book as well as his book dealing separately with a number of prominent economists; “The Mind and Method of the Economist.”
If my interpretation is correct, Loasby has a generally favorable view of A. Smith, Menger, Marshall, Chamberlin, Coase, Hayek, Popper, Ryle, Penrose, Richardson, and Lachmann. But he seems closest to Shackle. He is mostly critical of another almost equally prominent group of economists: J. Robinson, Alchian, Friedman, Becker, Lucas, Baumol, and Williamson. I have still not figured out his overall views of Schumpeter, Keynes or Kirzner, even though they figure prominently in his narratives. The resulting fusion in terms of new ideas is perhaps best described as “an evolutionary radical subjectivism which is powered by entrepreneurial imagination and cumulative knowledge.”
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