The school of economic thought founded by Carl Menger

The Austrian School is a heterodox school of economic thought that is based on methodological individualism—the concept that social phenomena result from the motivations and actions of individuals. The Austrian School originated in late-19th and early-20th century Vienna with the work of Carl Menger, Eugen Böhm von Bawerk, Friedrich von Wieser and others.

Web Pages

Are You an Austrian?
Ludwig von Mises Institute, also version in Spanish


A Conversation with Leland B. Yeager, by Leland B. Yeager, Austrian Economics Newsletter, 1991
Topics discussed include utilitarianism, rights theory, ethics and economics, mathematics and economics, methodological taboos, hermeneutics, Austrian economics, socialism and Eastern Europe
"AEN: What themes in Austrian economics do you like?
YEAGER: I like the concern with the big picture. The Austrians have shown how the activities of millions of separate people can be coordinated into a system that has a semblance of logic and structure even without a central planner. And I also like the Austrian tradition's concern with institutions. Unlike the mainstream, which gets bogged down in questions like decision-making in the firm, Austrians are concerned with the relation between interdependent units in the economy."
Related Topics: Ethics, Ludwig Lachmann, Rights
A Critique of Monetarist and Austrian Doctrines on the Utility and Value of Money, by Richard Timberlake, The Review of Austrian Economics, 1987
Examines the differences and similarities between the writings of monetarists such as Irving Fisher and Austrian economists such as Ludwig von Mises on the topic of money, contrasting them with the meager explanations of John Maynard Keynes
"The other development was the Austrian theory of money initiated by Carl Menger, and continued and enlarged upon by Ludwig von Mises, Friedrich Hayek, Murray Rothbard, and other economists in the Austro-German tradition. ... To their everlasting credit, the Austrians insisted on bringing money into the general theory of value by emphasizing a demand function for money, but they lacked a utility theory of money qua money with which to complete the analysis. ... Austrian doctrine on price indexes and utilities ... is very useful in limiting enthusiasm for authoritarian tampering with the monetary system."
A Fairy Tale of the Austrian Movement, by Joseph Salerno, Mises Daily, 25 Sep 2007
Review of Brian Doherty's Radicals for Capitalism, in particular of the section in chapter 7 where Peter Boettke discusses Austrian economics
"So Boettke's declaration that Austrians do not talk about 'public finance' is superficially true but erroneous ... when one considers the matter in more depth. ... no one with the slightest acquaintance with Austrian economics would deny that Austrian economists have written a great deal about the nature and consequences of government spending, deficits, and taxation. ... from the standpoint of Austrian economics, taxation and government resource-using activities are on all fours with other types of government intervention and are therefore dealt with in the theory of interventionism."
Austrian "Inflation," Austrian "Money," and Federal Reserve Policy, by Richard Timberlake, The Freeman, Sep 2000
Response to Joseph Salerno's Oct 1999 The Freeman article which critiqued Timberlake's essays in the April, May and June 1999 issues; discusses the words "inflation" and "money" and Federal Reserve policies, in an Austrian economics context
"One then wonders: how do 'Austrian' economists distinguish a real inflation—one that features greatly expanding fiat moneys and burgeoning price-level increases—from their 1920s 'inflation' with its falling prices? And, given the long series of paper-money excesses since 1942, where are the 'Austrian' deflations and depressions that would rectify the Fed's monetary increases over the last 55 years? I have in mind many changes I would have made in Fed policy, but the 'Austrian' prescription of monetary desiccation that Salerno offers is clearly a 'cure' that is worse than the disease."
Biography of Carl Menger: The Founder of the Austrian School, by Joseph Salerno
Biographical and bibliographical essay, discussing his life and work and delving into various aspects of Austrian economic theory as presented by Menger
"The fruits of Menger's methodological research were published in 1883 in a book entitled Untersuchungen uber die Methode der Sozialwissenschaften und der politischen Okonomie insbesondere (Investigations into the Method of the Social Sciences with Special Reference to Economics). ... the Investigations precipitated a furor among German economists who heatedly responded with derisive attacks on Menger and the 'Austrian School.' In fact, this latter term was originated and applied by the German Historicists in order to emphasize the isolation of Menger and his followers from the mainstream of German economics."
Book Review: Perfect Competition and the Transformation of Economics by Frank M. Machovec [PDF], by John B. Egger, Cato Journal, 1995
Review of the subject book, which argues that economics "embracing of perfect competition", over rivalrous competition, was a scientific revolution (as per Thomas Kuhn), but that led the profession down the wrong path
"Hutt and Machovec share the attributes of scholarship warmly received by the modern Austrian School, yet neither identifies himself as 'an Austrian economist,' each viewing his work as continuing and perhaps reestablishing the classical tradition. As Machovec puts it, 'Austrian economists see the market process much as the classical economists saw it' (p. 22). If they are right, Frederick Nymeyer (1960), the American publisher of Bohm-Bawerk, was correct to advertise the Austrian School as 'neoclassical,' and what we know today as 'neoclassical' should more accurately be considered neo-Ricardian, neo-Cournotian, or neo-Walrasian."
Related Topics: Entrepreneurship, Frank Knight
Book Review: J. B. Say, by Richard Ebeling, Future of Freedom, May 1998
Review of J.B. Say: An Economist in Troubled Times, writings selected and translated by R.R. Palmer, 1997
"As an economic theorist, Say's contributions included his emphasis on the role of 'utility' as the foundation for explaining the value that goods have in the market. In this, he was anticipating some of the arguments of the later Austrian school of economics. He was also suspicious of an excessive use of mathematics in economics along lines similar to the Austrian economists. Say was the first economist to carefully analyze the role of the 'entrepreneur' as the crucial decision-maker who directs the production activities of private enterprises in the service of satisfying consumer demand."
The Mainspring of Human Progress by Henry Grady Weaver, by William H. Peterson, The Freeman, Jun 1998
Review of the 1997 edition of Weaver's classic, published by the Foundation for Economic Education, with a preface by FEE founder Leonard Read and a new introduction by John Hood (author of The Heroic Enterprise)
"'There can be no progress except through the more effective use of our individual energies.'
The emblazonment of this quotation on the front cover of the new edition of Henry Grady Weaver's classic is timely. For the thought gets to the heart of the Austrian concept of methodological individualism, a counterpoint to the Keynesian macroeconomic approach that requires national planners in Washington to manage our economy. That approach ignores the role of creative, risk-taking individuals who are the mainspring of human progress."
Eugen von Böhm-Bawerk: A Sesquicentennial Appreciation, by Richard Ebeling, The Freeman, Feb 2001
Broad biographical essay, including Böhm-Bawerk relationships with Menger, Mises and Schumpeter, and his two major works
"... Böhm-Bawerk's writings on what has become known as the Austrian theory of capital and interest, and his equally insightful formulation of the Austrian theory of value and price ... have served as the foundation stones for much of twentieth-century Austrian economics ... The Austrian school began 1871 with the publication of Carl Menger's Principles of Economics. In this work, Menger challenged the fundamental premises of the classical economists, from Adam Smith through David Ricardo to John Stuart Mill. ... Menger formulated a subjective theory of value, reasoning that value originates in the mind of an evaluator."
Faculty Spotlight Interview: Jeff Riggenbach, by Jeff Riggenbach, 18 Mar 2010
Topics discussed include Austrian economics, the Mises Institute, the people who inspired Riggenbach, alternate career paths, hobbies, his book Why American History is Not What They Say and revisionist history
"I began reading works by the Austrian masters – first Rothbard, then Hayek, then Mises – back in the 1970s, because my close friend Roy A. Childs, Jr. was relentlessly talking them up and recommending them. Once I got started, I required no further persuading. They made sense of things in a way few other writers had done. They understood the big picture – how economics interconnected with the rest of human knowledge, including especially philosophy and history. Reading them, and especially reading Mises's Human Action, was a revelation, a series of revelations, an education in itself."
Faculty Spotlight Interview: Robert Higgs, by Robert Higgs, 2 Dec 2010
Questions Higgs about free time and hobbies, the Austrian school and the Mises Institute, his greatest inspiration, his book Crisis and Leviathan, his work and "words of wisdom" for the next generation of scholars
"I stumbled upon Hayek's writing during the first year of my career as a professor (1968-69). Hayek's references led me to read Mises's Human Action several years later, and around the same time, I discovered Rothbard, Kirzner, and other Austrians. ... In retrospect, I regard Mises as the giant among these figures. ... [words of wisdom:] Study the writings of the great Austrians carefully, especially those of Mises, Hayek, and Rothbard, but do not confine your study to the Austrian school or to economics alone. The greatest Austrians were men of extremely wide knowledge and understanding."
Faculty Spotlight Interview: Thomas DiLorenzo, by Thomas DiLorenzo, 16 Aug 2010
"Any words of wisdom that you wish to pass on to the younger generation of Austrian scholars? ... I would encourage younger scholars to pay attention to the method of scholarship of Rothhbard, Mises, Hayek, and other Austrians, and to consider emulating it and improving on it. ... Armed with a solid understanding of Austrian economics and the classical liberal tradition in political philosophy, there is a broad research agenda waiting for young scholars ..."
Faculty Spotlight Interview: Walter Block, by Walter Block, 18 Jan 2010
Asks Block about his hobbies, greatest inspiration, the impact of his work and more
"... my acceptance of Austrianism was far more gradual, and took several years. For me, the sticking point was the synthetic apriori nature of Praxeology. I was inured with the empirical logical positivist neoclassical view that statements, truth claims, were either apodictic, in which case they were mere tautologies, or they were empirical hypotheses, which could never be known with absolute certainty, but at least they applied to the real world. I now see this as the very core of the Austrian enterprise; it tops my list of the most important attributes of Austrianism."
Frank A. Fetter (1863-1949): A Forgotten Giant, by Jeffrey Herbener
Biographical and bibliographical essay
"In the period between the founders of the Austrian school (Menger, Böhm-Bawerk, and Wieser) and its next generation (led by Mises and Hayek), Frank Albert Fetter was the standard bearer of the Austrian tradition. His 1904 treatise, Principles of Economics, constructed a general theory of economics in the Austrian tradition that went unsurpassed until Ludwig von Mises's treatise of 1940, Nationaloekonomie. Yet Fetter, an American Austrian long before the interwar migration from Austria, has not received due recognition for his many contributions to the tradition."
Friedman, Milton (1912-2006), by Aaron Steelman, The Encyclopedia of Libertarianism, 15 Aug 2008
Biographical essay
"It also placed the Chicago School squarely in opposition to the Austrian School, whose proponents embraced many of the same promarket positions as Friedman, but who argued that economists must base their work on a set of assumptions that can be demonstrated to be logically correct. Moreover, the Austrians argued that much empirical work was of limited value because social scientists cannot model human behavior in the same way that physical scientists model their objects of study. One can say, for instance, that a price control will lead to a shortage, but the magnitude of that shortage will be difficult, if not impossible, to predict."
How I Became a Libertarian and an Austrian Economist, by Richard Ebeling, 2 May 2016
Autobiographical essay highlighting the people and events who influenced him in his path to libertarianism and Austrian economics
"... in the spring of 1974 I was invited to attend the first Austrian Economics conference in South Royalton, Vermont in June of that year. ... I also started attending graduate classes in 1976 at New York University as part of the Austrian Economics program organized by Israel Kirzner. ... The discussions ... encompassed everything from critiques of the frontiers of mainstream economics, to attempts at new and original contributions to Austrian theory, to interpretative investigations into the history of economic ideas and questions concerning the methodology and methods of economic science, and the economic policy issues of the day."
Israel M. Kirzner and the Austrian Theory of Competition and Entrepreneurship, by Richard Ebeling, Future of Freedom, Aug 2001
Written on occasion of Kirzner's academic retirement at age 71; begins with biographical summary and then focuses on Kirzner's understanding of entrepreneurs in the market "process" and the detrimental effects of government intervention in the market
"He has also been one of the leading intellectual forces in bringing about the revival of the Austrian school of economics, after its long hiatus following the triumph of Keynesian economics after the Second World War. ... in 1976 he founded an Austrian economics graduate study program at New York University that has helped to successfully train a new generation of Austrian economists. ... And for more than 25 years, the weekly Austrian economics colloquium at NYU, under Kirzner's general supervision, has been an important focal point for Austrian-oriented economists in the greater New York area."
It Usually Ends With Murray Rothbard: My Long and Winding Road to Libertarianism and Austrian Economics, by Joseph Salerno, 23 Jun 2005
Lengthy autobiographical essay recounting Prof. Salerno's progression from conservatism to anarcho-capitalism, from classical to Austrian economics, and meeting and getting to know Murray Rothbard
"Serendipitously, in the same semester that I was introduced to Rothbard and modern Austrian business cycle theory, I was enrolled in a History of Economic Thought course taught by ... Father Cheney ... he introduced the topic of the marginalist revolution. Referring to the early Austrians, Carl Menger, Eugen von Böhm-Bawerk, and the latter's brother-in-law, Friedrich von Wieser, he characterized the formation of the Austrian school as a 'unique event' in intellectual history. Never before, he declared, had such brilliant men worked so closely together to develop a common approach to economic phenomena."
Jean-Baptiste Say: Neglected Champion of Laissez-Faire, by Larry J. Sechrest
Biographical and bibliographical essay, discussing Say's life, methodology and his writings on money, banking, the law of markets, entrepreneurship, capital, interest, value, utility, taxes and the state
"It is true that Say either overlooked or misunderstood certain points of theory dear to the hearts of Austrian economists. He does not believe that market exchanges represent utility gains for both buyer and seller; he does not see the relationship between interest rates and time preference ... On the other hand, ... he is very much in favor of commodity money and free banking; he knows that entrepreneurs and the accumulation of capital are essential to economic advancement; he correctly identifies both government regulation and taxation as threats to prosperity, indeed, even as threats to civil society itself."
Kirzner, Israel M. (1930-), by Brian Doherty, The Encyclopedia of Libertarianism, 15 Aug 2008
Biographical essay
"By the mid-1970s, ... with interest in Austrian theory growing—to a large degree thanks to seminars that Kirzner helped develop under the auspices of the Institute for Humane Studies—fellow Austrian School economist Ludwig Lachmann became attached to the department. Soon, with outside funding, an Austrian program developed at NYU and a series of weekly colloquia in Austrian economics held there has become a central gathering point for economists interested in the Austrian tradition. Under Kirzner’s leadership, many other Austrians have taught at NYU, although only one other besides Kirzner, Mario Rizzo, has gained tenure."
My Life as a Libertarian, by Dominick T. Armentano, 21 Jul 2003
Lengthy autobiographical essay, describing among other things, how he took an interest in antitrust policy and wrote several books and articles on the subject, and his disappointment when attempting to stop Connecticut from imposing a state income tax
"My fist formal interaction with the world of Austrian Economics came with an invitation to the South Royalton Conference in 1974. There I met several of the Austrian luminaries for the first time and I was blown away by how seriously the youthful audience took theoretical controversies. At the end of the Conference, I boasted to George Pearson (Koch Industries) that I could organize and chair an equally successful conference at Hartford in the near future if they were so inclined to put up the money. That's how the Austrian Economics Conference at Hartford came about in the summer of 1975."
The Austrian Economists, by Eugen Böhm von Bawerk, The Annals of the American Academy of Political and Social Science, 1891
Explains some of the major tenets of the Austrian school -just two decades after publication of its seminal treatise, contrasting them with the views of classical economics and the historical school; paper solicited by the editors of the magazine
"The province of the Austrian economists is theory in the strict sense of the word. ... Their researches take their direction from the theory of value, the corner-stone being the well-known theory of final utility. This theory can be condensed into three unusually simple propositions. The value of goods is measured by the importance of the want whose satisfaction is dependent upon the possession of the goods."
The Kirznerian Way: An Interview with Israel M. Kirzner, by Israel Kirzner, Austrian Economics Newsletter, 1997
Topics include: Ludwig von Mises, the Austrian School, equilibrium, entrepreneurship, capital, business cycle theory, time preference, Hayek, Lachmann and Rothbard
"In 1954, there was no Austrian movement. There was no Austrian School. There was Mises, and there was Hayek. They must have been seen as the last of their generation, and not too much of a threat. ... [Today] its sheer size is very pleasing, of course. To some extent, the fact that the profession at large has moved even further along in the technical-mathematical direction created an opening for the Austrian School among younger scholars. They began to see the sterility and aridity of the way the mainstream has gone. The Austrian School appears as a whole different way of approaching the discipline."
The Nature and Significance of Economic Education, by Israel Kirzner, The Freeman, Oct 1998
Explains why economic education of both the general public and politicians/legislators is needed and why a teacher, such as Mises, must remain scientifically detached (value free) even if passionate about the teaching goals
"Austrian economics never gave up the central conclusions of the earlier shared consensus of neoclassical economics. In fact, both Mises and Hayek significantly deepened Austrian economic understanding (of how markets work and of how they set benign, efficiency-enhancing, tendencies into motion) ... They demonstrated ... how Austrian insights concerning the entrepreneurial role, the competitive process, and the knowledge-discovery process in fact respond effectively to both the macro and the micro concerns of the new interventionist orthodoxy in the economics profession."
The Origin of Economic Theory: A Portrait of Richard Cantillon (1680-1734), by Mark Thornton, 3 Aug 2007
Examines the sections of Cantillon's Essai relating them to episodes in the author's life, then delving into several Austrian economics insights that can be found in the work
"The second half of part one is where Cantillon becomes the first economist to develop the key Austrian insights concerning the entrepreneur and the role entrepreneurship plays in the economy. ... In part two of the Essai, Cantillon laid out his pathbreaking Austrian analysis of the monetary economy, exposing the great error of mercantilism (that money is wealth). ... Another hallmark of his Austrian analysis is his intention to limit himself to the positive economics of his subject, an attribute that Hayek considered especially remarkable for a writer of his time."
The Philosophical Origins of Austrian Economics, by David Gordon, Mises Daily, 17 Jun 2006
Surveys the views of the schools of philosophy and economics that influenced or competed with Austrian economics, including Hegel, the Historical School, Franz Brentano, Occam, Karl Marx, Aristotle, Kant, the logical positivists and Karl Popper
"The Austrian School of economics arose in opposition to the German Historical School; and Carl Menger developed his methodological views in combat with the rival group. ... Eugen Böhm-Bawerk ... was influenced by a quite different school of philosophy, the nominalists. ... Ludwig von Mises ... found himself the target of philosophical attack. The logical positivist movement subjected his deductive or praxeological approach to severe scrutiny."
Related Topic: Aristotle
The Story of a Movement, by Peter Boettke, The Freeman, May 1995
Reflects on the growth of Austrian economics from a set of lectures in South Royalton, Vermont in June 1974 to the current spread through several scholars and institutions, and discusses a Karen Vaughn book on the school and its debates
"George Pearson ... initiated the idea to bring together the three leading active scholars in Austrian economics–Israel Kirzner, Ludwig Lachmann, and Murray Rothbard—to present a series of lectures ... W. H. Hutt and Henry Hazlitt were in attendance. ... The younger generation of participants included D. T. Armentano, Walter Block, Richard Ebeling, Roger Garrison, Jack High, Don Lavoie, Laurence Moss, Gerald O’Driscoll, Mario Rizzo, Joseph Salerno, Sudha Shenoy, and Karen Vaughn. Each of these individuals has subsequently made a name within the invisible college of Austrian economists."
The Undiscountable Professor Kirzner, by Roger W. Garrison, The Freeman, Aug 1997
Review of Kirzner's 1996 Essays on Capital and Interest, a collection of three previously published essays
"Professor Kirzner's perspective on capital and interest constitutes the essential difference between Austrian economics and neoclassical (particularly Chicago) economics and the essential bridge between Austrian microeconomics and Austrian macroeconomics. ... The short introductory essay includes a brief explanation of his reluctance to cross over into macroeconomics. According to ... Kirzner ..., recent Austrian work on Hayekian cycle theory ... seems, on the whole, to fail to draw on the subjectivist, Misesian, tradition which the contemporary Austrian resurgence has done so much to revive."
What Do Austrians Mean by "Rational"?, by Michael S. Rozeff, Mises Daily, 26 Jul 2006
"If human action always aims at a purpose ... then human action must be rational, that is, consistent with reason or guided by one's will and intellect. ... Praxeology tells us that human action is rational. The case being made for state action to remedy so-called irrationalities discovered by researchers in behavioral economics and finance has no logical justification."
William Harold Hutt (1899-1988): A Biographical Essay from an Austrian Perspective, by John B. Egger
Biographical and bibliographical essay
"The Austrian School's defining precepts, concisely specified by Carl Menger in 1871, were consistent with important doctrines, like rivalrous competition, which have characterized economics from its earliest days. Though more true of Continental than of British writers, who were hampered by an objective concept of value, Menger's insights could be folded into an evolutionary tradition that continued to develop ... until the 1930s. ... it was the mainstream's descent into mathematical microeconomics and Keynesian macroeconomics that made the Austrian School distinct."


Principles of Economics, by Carl Menger, 1871
Contents: The General Theory of the Good - Economy and Economic Goods - The Theory of Value - The Theory of Exchange - The Theory of Price - Use Value and Exchange Value - The Theory of the Commodity - The Theory of Money
The Driving Force of the Market: Essays in Austrian Economics
    by Israel Kirzner, 2000
Contents: The character of Austrian economics - The market process: some normative perspectives - Studies in the Mises—Hayek legacy - Studies in the theory of competition and entrepreneurship - Appendices: Three obituaries
The Elgar Companion to Austrian Economics
    by Peter Boettke (Editor), 1998
Partial contents: Methodological Individualism - Subjectivism - Praxeology - Marginal utility - Entrepreneurship - Risk and Uncertainty - Prices and Knowledge - Spontaneous Order - Capital Theory - Austrian Business Cycle Theory - Law and Economics
What Every Investor Should Know About Austrian Economics and the Hard Money Movement
    by Mark Skousen, Mises Institute, 1988
Pamphlet size; published by LvMI (1988) and FEE (1995) and now a chapter in A Viennese Waltz Down Wall Street (2013)
  • ISBN 1572460512: Paperback, Foundation for Econ Education, 2nd edition, 1995

The introductory paragraph uses material from the Wikipedia article "Austrian School" as of 06 Nov 2018, which is released under the Creative Commons Attribution-Share-Alike License 3.0.