Modern Austrian Economics is a 3-volume set (link for volume 1) about the Austrian School of economics since about 1970. Ludwig von Mises was the prominent member of the school from about 1920-50. Then the school split into two main camps, one exemplified by Mises and the other exemplified by Friedrich Hayek. Mises died in 1973 and Hayek's attention turned mostly to law and political science. Subsequently leadership of the Austrian School more or less divided into camps led by three men -- Murray Rothbard, Israel Kirzner, and Ludwig Lachmann.
Rothbard is very loyal to Mises and anti-Hayek. Kirzner and Lachmann agree with Hayek in some respects, but not the same ones. Kirzner and Lachmann have their own disagreements, especially about entrepreneurship.
The editor of Modern Austrian Economics writes: "Rothbardians have remained at the margins of this new development in Austrian thought, since the concepts of institutions and of societal evolution are hardly compatible with the Misesian emphasis on rationalism. In this respect, the criticisms directed at the Hayekian idea of cultural evolution is evocative. It focuses essentially on the Hayekian idea of the efficiency of institutions that have been selected throughout history. That an institution is the outcome of an Evolutionary process must not hide the fact that all human action is, by definition, based on reason and is, by no means, conditioned by habit or custom. 'Hayek's entire work, on the contrary, is devoted to a denigration of human reason' (Rothbard, 1992, p. 142). The core concepts of the theory of cultural evolution -- 'spontaneous order', 'unintended consequences of human action', 'product of human action but not of human design' -- are subject to vigorous objections. The notion of spontaneity makes choice appear an act of unawareness. According to Misesians, individuals take recourse to institutions to ensure a satisfactory outcome of their economic decisions, but not because they are conditioned, that is, because they would understand that their past choices have turned out to have been efficient. Rather, the individuals' choice is based on their own free will and is conscious, it is the outcome of a means--end calculus. Human action is always, by definition, intentional. ... The Hayekian critique of constructivism appears, in this respect, to collide head on with rationalism that is unable to grasp the reasons for its emphasis on the unintended consequences of human actions" (Volume 1, xxviii-xxix).
What did Mises mean by "rationalism"?
"Human action is necessarily always rational. The term "rational action" is therefore pleonastic and must be rejected as such. When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man" (Human Action, 18)
"When applied to the means chosen for the attainment of ends, the terms rational and irrational imply a judgment about the expediency and adequacy of the procedure employed" (20).
"Praxeology deals with the ways and means chosen for the attainment of such ultimate ends. Its object is means, not ends" (21)
Despite his avowed loyalty and contrary to Mises, Rothbard asserts that rationalism is about ends or goals as well as means. "At the core of the constellation of crucial differences between the Misesian and Hayekian paradigms is their respective attitudes toward human reason. Man, affirms Mises after Aristotle, is the uniquely rational animal; reason is man’s unique and essential instrument to find out what his needs and preferences are, and to discover and employ the means to achieve them. Mises’s stress on action, on acting man, therefore necessarily stresses the vital importance of human reason. Misesian Man acts, and therefore consciously selects goals, and decides how to pursue them.
Hayek's entire work, on the contrary, is devoted to a denigration of human reason." (Modern Austrian Economics, Volume 2, p. 28; also here, p. 23).
To be continued.