__________________________________________________________________ William Barnett II and Walter Block Economic Categorization I . Introduction . Classification is the essence of the sciences of biology and chemistry . Without the genus and species concepts of the former , and the periodical table of elements of the latter , these disciplines would be very different enterprises . While it is of course a wild exaggeration to say that biological and chemical science consists of no more than cataloging , even contemplating this notion is a dramatic way of underscoring the crucial centrality of this mode of analysis to those bodies of learning . In economics , matters are different . There is relatively little emphasis on sorting the various elements of the dismal science . However , it is our contention that taxonomy is important in this realm as well . 1 The present paper is devoted to a sorting out of the different elements of the dismal science . In section II we tackle the question of how the disciplines , and the schools of thought are to be characterized . Section III is devoted to a deconstruction of Austrian economics . In sec- tion IV we deal with an objection to our thesis . We conclude in section V . II . Classification schemes . 1 . The Journal of Economic Literature . Perhaps we do best to start with the mainstream JEL categorization in this regard . Here , the disciplines of economics are broken down as follows : A - General Economics and Teaching B - Schools of Economic Thought and Methodology C - Mathematical and Quantitative Methods D - Microeconomics E - Macroeconomics and Monetary Economics F - International Economics G - Financial Economics H - Public Economics I - Health , Education , and Welfare J - Labor and Demographic Economics K - Law and Economics L - Industrial Organization M - Business Administration and Business Economics ; Marketing ; Accounting 1 Rothbard ( 2004 , Ch . 13 ) places great emphasis on classification with regard to taxation and other violent interventions into the market . See also Lavoie ( 1982 , pp . 169-83 ) and Ikeda ( 1997 , pp . 245-47 ) in this regard . For another classificationist approach see Block and Cwik ( 2007 ). William Barnett II is Chase Distinguished Professor of International Business and Professor of Economics , and Walter Block is Harold E . Wirth Eminent Scholar and Professor of Economics , both at the College of Business Administration , Loyola University , New Orleans . __________________________________________________________________ Laissez-Faire 4

__________________________________________________________________ N - Economic History O - Economic Development , Technological Change , and Growth P - Economic Systems Q - Agricultural and Natural Resource Economics R - Urban , Rural , and Regional Economics Z - Other Special Topics There is no controversy within the neoclassical economics world over this breakdown . This is remarkable , in that argument and debate are part and parcel of the dismal science . 2 However , Austrian economists 3 have more misgivings about this than others . Not , we hasten to say , about the very idea of breaking down the larger world of economics into its constituent elements . If there is any chance of successfully wrestling complexity , it can only be done through a “ divide and conquer ” procedure : taking things a small bit at a time . However , the JEL categorization ignores several Austrian insights . There are several leading theoreticians of this school of thought who have weighed in on this matter . Consider the following . According to Mises ( 1998 , p . 874 ): 4 2 There being none , let us offer several : this schema does not make comfortable room for experimental economics , behavioral economics , and the interdisciplinary overlap between economics and several other subject matters , such as biology ( bio-economics ) and psychology ( psychological economics ). 3 To be intensively discussed below . At this point let us content ourselves by saying that the Austrian school features the contributions of Menger ( 1950 ), Bohm Bawerk ( 1959 ), Mises ( 1998 ) and Rothbard ( 2004 ). 4 We owe this cite to Gérard Dréan . Economics does not allow of any breaking up into special branches . It invariably deals with the interconnectedness of all the phenomena of action . The catallactic problems cannot become visible if one deals with each branch of production separately . It is impossible to study labor and wages without studying implicitly commodity prices , interest rates , profit and loss , money and credit , and all the other major problems . The real problems of the determination of wage rates cannot even be touched in a course on labor . There are no such things as “ economics of labor ” or “ economics of agriculture .” There is only one coherent body of economics . In the view of Rothbard : 5 … economics has become appallingly fragmented , dissociated to such a degree that there hardly is an economics any more ; instead , we find myriad bits and pieces of uncoordinated analysis . Economics has , first , been fragmented into “ applied ” fields —“ urban land economics ,” “ agricultural economics ,” “ labor economics ,” “ public finance economics ,” etc ., each division largely heedless of the others . More grievous still has been the disintegration of what has been confined to the category of “ economic theory .” Utility theory , monopoly theory , international trade theory , etc ., down to linear programming and games theory — each moves in its sharply isolated compartment , with its own hyperrefined literature . Recently , growing awareness of this fragmentation has led to vague “ interdisciplinary ” admixtures with all the other “ social sciences .” Confusion has been worse confounded , with resulting invasive forays of numerous other disciplines into economics , rather than the diffusion of economics elsewhere . At any rate , it is somewhat foolhardy to attempt to inte- 5 http :// www . mises . org / rothbard / mes / preface . asp ( preface to the revised edition , 1993 ). We are indebted to David Gordon for this quote . __________________________________________________________________ Laissez-Faire 5

__________________________________________________________________ grate economics with everything else before economics has itself been made whole . Only then will the proper place of economics among the other disciplines become manifest . Here is Rogge ’ s ( 1979 , pp . 211-12 ) take on the matter : 6 I would be prepared to argue that the practice of breaking up this useful discipline into agricultural economics , transportation economics , development economics , labor economics , urban economics , etc ., has been productive of much mischief . Behind the shield of special circumstances and special knowledge , theories have been developed and given wide acceptance that would be regarded as patently absurd if they were put as a general model ; policies have been developed and urged upon society that would be recognizably catastrophic if applied generally . Now consider some specifics . First , macroeconomics , proper macroeconomics that is , is but a branch or an implication or application of microeconomics . Austrian Business Cycle Theory ( ABCT ) is based on disaggregated ( or at least far more disaggregated ) considerations , ideally on the choices of individuals , in sharp contrast to the Keynesian and monetarist schools , which sever micro from macro . The JEL system works well , then , for these schools of thought , 7 but not for the Austrians . 6 We thank Rich Wilcke for pointing us in the direction of this quote . 7 According to Milton Friedman ( Ebeling , 1974 , p . 3 ) “ … there was no such thing as ‘ Austrian Economics ,’ only good economics and bad economics .” Continues Ebeling : “( This is ) … a rather unusual statement , because just a few weeks before he had been on public television and spent several minutes explaining the special characteristics of ‘ Chi- Second , this applies too , to the severing of international trade from the domestic variety . For traditional economists , there is all the world of difference between the two . For the Austrians , apart from obvious institutional differences ( different currencies ), 8 there are none . Third , there are other sub-disciplines that do not deserve a category of their own . They constitute , merely , implications of basic economic principles . Included here would be H - Public Economics I - Health , Education , and Welfare J - Labor and Demographic Economics K - Law and Economics L - Industrial Organization M - Business Administration and Business Economics ; Marketing ; Accounting O - Economic Development , Technological Change , and Growth Q - Agricultural and Natural Resource Economics R - Urban , Rural , and Regional Economics What might an Austrian breakdown of this subject matter look like ? This can only be speculative , since no survey of economists representative of this tradition has ever been done , but here is our estimate : A - General Economics and Teaching B - Schools of Economic Thought and Methodology cago Economics .’ Another argument against this view of Friedman : the widely accepted JEL categorization lists “ B - Schools of Economic Thought and Methodology .” 8 But not trade barriers . There are numerous intra-national trade barriers : licenses , geographical limitations in countries such as Canada , etc . __________________________________________________________________ Laissez-Faire 6

__________________________________________________________________ C - Mathematical and Quantitative Methods D - Microeconomics - Macroeconomics and Monetary Economics - International Economics - Financial Economics - Public Economics - Health , Education , and Welfare - Labor and Demographic Economics - Law and Economics - Industrial Organization - Business Administration and Business Economics ; Marketing ; Accounting E - Economic History F - Economic Systems It should be emphasized that we are not claiming that Austrians would object to the JEL classification per se . Economics must be broken down in some way for librarian purposes , and that seems as good way as any . The objection to this way of categorizing things lies in that academic disciplines in universities are broken down roughly in accord with this categorization , and this isolates the fields far too much . Of course , even for purposes of presenting material to students economic science must be broken down in some way . Not every course should be called plain old “ economics .” Specialization and division of labor must be served here as elsewhere . Thus we offer the six way categorization , A to F , that appears above . 2 . Schools of thought . Here are the schools of thought that together might be considered to comprise economics : Austrian ; Behaviorist ; Cambridge , England ; Cambridge , Massachusetts ; Chicagoan ; Classical ; 9 George-ists ; German Historical School ; Experimental ; Feminist ; Fiscalist ; 10 Game theory ; Institutionalists ; Keynesian ; Lausanne ; Manchester ; Marxist ( socialist ); Mercantilist ; Monetarist ; Neo-Austrian ; New Keynesians ; Neo-Keynesian ; Physiocrats ; Post Keynesian ; Pragmatists ; Public Choice ; Rational Expectations , Salamanca ; Supply Side ; Utilitarians ; Walrasians . 11 Note , these are listed in alphabetical order . On what basis , apart from the present alphabetical organization , can these be organized ? Several possibilities spring to mind . One is political ideology : adherence to , or opposition against , laissez-faire capitalism and private property rights . Let us offer three choices : pro , neutral , con . Here is how we would place each of these schools of thought into these three options : Pro : Austrian ; Chicagoan ; Classical ; Georgeists ; Lausanne ; Manchester ; Monetarist ; Neo-Austrian ; Physiocrats ; Public Choice ; It is an interesting question as to how a purely Austrian graduate school would organize its courses . One reason for adhering to traditional breakdowns would be to render its graduates more acceptable on the job market . But suppose for some reason this was not a consideration . Thus , our suggestion . 9 Adam Smith , Adam Ferguson , David Hume , John Stuart Mill , Marshall . 10 We are nothing if not inclusive . 11 For different but overlapping schemas , see http :// cepa . newschool . edu / het / thought . htm ; http :// dmoz . org / Science / Social_Sciences / Eco nomics / Schools_of_Thought / __________________________________________________________________ Laissez-Faire 7