On April 4th, 1951, Don Lavoie was born. He was one of the most fascinating economists in the Austrian school, writing brilliant critiques of central planning, insightful papers on philosophy and social science, and espousing a form of libertarianism that was both scientific and radical. Though he died from pancreatic cancer in 2001, he has left an incredible legacy to all who love liberty, both through his writings and through the ongoing contributions of his students.

Don Lavoie honored by the School of Public Policy at George Mason University.

Much of Lavoie’s research explored the economic calculation problem, also known as the knowledge problem. State socialists propose to organize an economy by central planning, rather than the competitive market process. Austrian economists argue that central planning faces a fundamental problem of economic calculation. Knowledge is dispersed throughout society, and much of it is inarticulate knowledge, the tacit preferences and unspoken skills of individuals throughout society. No central planner can aggregate all of this knowledge, much less use it to determine what constitutes a rational allocation of resources. Markets transmit this dispersed knowledge through prices, coordinating individuals and their knowledge in a manner that planners could not.  This argument was developed by Ludwig von Mises in Economic Calculation in the Socialist Commonwealth and expanded on by F.A. Hayek in The Use of Knowledge in Society. Don Lavoie then expanded on this Austrian critique of central planning in his books, Rivalry and Central Planning and National Economic Planning: What Is Left? (the latter is available as a free e-book from The Cato Institute).

National Economic Planning: What Is Left? is a remarkably thorough and clear piece of economic scholarship. Lavoie charitably explains various arguments for economic planning, not just those associated with Marxism, but also the forms of planning advocated by “market socialists,” proponents of “reindustrialization,” and advocates of “economic democracy.” After explaining these arguments, with copious quotes from the advocates of these positions, he systematically refutes them. In the process, he offers one of the most thoughtful and thorough expositions on the knowledge problem that I’ve read. He also offers several interdisciplinary insights. Lavoie often explored connections between economics and philosophy, particularly hermeneutics and philosophy of science. Throughout National Economic Planning, Lavoie frequently compares social processes of economic coordination and knowledge dispersal with the social processes that philosophers of science note as key social processes for facilitating the development of knowledge within scientific communities. His synthesis of Austrian economics with philosophy of science is truly fascinating.

Don Lavoie’s extraordinary contributions to economics and to libertarianism are not just found in his writings. Many of Lavoie’s students, including Steve Horwitz, David Prychitko, Virgil Storr, Emily Chamlee-Wright, and Peter Boettke, have gone on to become extraordinarily influential Austrian economists. His influence can be seen throughout their writing and research. Much of Lavoie’s work focused on comparative analysis of economic systems, particularly studying and critiquing socialism. Peter Boettke and David Prychitko continued that research program, with Boettke researching the Soviet economy and Prychitko doing fascinating work on the tension between Marxist states and workers’ self-management. Lavoie also studied the relationship between economics and culture, writing books and papers on this subject. Virgil Storr and Emily Chamlee-Wright have continued this investigation of the cultural underpinnings of markets. Beyond just exploring Lavoie’s research interests, his students also continue to embody his intellectual virtues. Like Don, they engage in rigorous, innovative, and interdisciplinary research. Lavoie always displayed interpretive charity towards those he critiqued, making his radicalism a well-reasoned and scientific one. That too has continued with his students.

If you’re interested in understanding the market process, critiques of central planning, or how knowledge is used in society, you will benefit immensely from reading Don Lavoie. National Economic Planning: What Is Left? is a great book to start with. You can also find a variety of papers by and about Don at donlavoie.org, which is maintained by his student Virgil Storr, a professor at the Mercatus Center at George Mason University.

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