A Definitional Review of Economics through the Application of the Leading Theories and Methodology of the Austrian School

Abstract

The author shows that often quoted definitions used in the study of introductory courses in economics for the most part are lacking critical elements that would otherwise provide a more complete understanding of the nature of economic pursuits. The author uses the leading theories and methodology of the Austrian School of to review and critique the definitional construct of the term Economics as it is commonly used in the literature. The author discusses important concepts central to the nature and understanding of economics as understood by the Austrians, such as: the importance of time preference, economics as a learning system, the importance of entrepreneurialism, value determination, scarcity, the fallacy of the concept of equilibrium, human action and Praxeology, the misapplication of the scientific method and scientism to economics as a social study along with a discussion concerning the relative application of econometrics to the field of study. In doing so he touches upon the classical foundations of Austrian School, being: Methodological Individualism and Methodological Subjectivism. The author finishes his review with a look at the Theory of Subjective Value, the Theory of Diminishing Marginal Utility, The Austrian Theory of Price and lastly with a review of the Austrian Theory of the Business Trade Cycle. Through this work the author introduces the reader to the most critical thinkers behind the Austrian School of Economics: Carl Menger, Eugen Bohn-Bawerk, Ludweg von Mises and his student F. A. von Hayek (Nobel 1974). Other notable scholars being referenced include Murray Rothbard and Israel Kizner. This is an essential reading for anyone wishing to understand the basic tenants of this branch of economics.