Review of Austrian Economics, 11: 163–167 (1999) c  1999 Kluwer Academic Publishers Review of Nicolai J. Foss, The Austrian School and Modern Economics: Essays in Reassessment, Copenhagen: Handelshojskolens Forlag, 1994, 229 pp. STEVEN HORWITZ N ow a full 25 years after the beginning of its revival, the Austrian school seems to have reached a crucial fork in the road. Having spent much energy during the post-revival period on sorting out what the Austrian approach is all about and how it is distinct from the neoclassical mainstream, the school is now faced with the question of how that distinctive approach can be reconciled with some congenial developments in neoclassical economics. There appears to be an increasing trend within the Austrian school toward finding commonalities with these mainstream developments, rather than distancing itself from them. Nicolai Foss’s recent book is in many ways an excellent and productive example of this trend. He recapitulates many major Austrian themes while finding ways to connect them to important new work in evolutionary and neo-institutional economics. His attempts to “open up” Austrians to those insights, as well as opening up these other traditions to the contributions of Austrians, are largely successful and serve as a nice model for the kind of work Austrians should aspire to. In addition, Foss argues that Austrian economics needs to take a more explicit problem- solving approach to its work. He reiterates many of the same claims that have been made in the past about Austrians being too consumed by methodology, or paralyzed by their, in his view, overly dogmatic adherence to subjectivism, to actually get on with attempts to use their theories to explain real world phenomena. His final chapter is a quite critical examination of Austrian methodology that ends up suggesting that modern Austrian economics will die out unless it shifts its methodological ground and begins to address contemporary and historical economic problems and puzzles. This argument is more questionable than the rest of the book’s attempts to find points of contact with the mainstream. Foss is not the first thinker to find such points of contact, nor is it the case that post-revival Austrians have ignored applied issues. Foss’s bibliography is notable not for what is there, but for what is not: namely the significant, though not nearly sufficient, applied work of younger Austrians. His neglect of this work leads him to have a more negative assessment of modern Austrian economics than is warranted by the “data”. The two major pieces of history of economic thought in this collection are both excellent overviews of a defining debate in the Austrian tradition. Foss’s essay on the Hayek-Keynes debate nicely covers the main issues, with particular attention to the role of capital theory in demarcating the differences between the two thinkers. In particular, Foss recognizes