Austrian School of Economics

Abstract

The birth of the Austrian School of Economics is usually recognized as having occurred with the 1871 publication of Carl Menger’s Grundsätze der Volkwirthschaftslehre. On the basis of this work Menger (hitherto a civil servant) became a junior faculty member at the University of Vienna. Several years later, after a stint as tutor and travelling companion to Crown Prince Rudolph, he was appointed to a professorial chair at the University. Two younger economists, Eugen von Böhm-Bawerk and Friedrich von Wieser (neither of whom had been a student of Menger) became enthusiastic supporters of the new ideas put forward in Menger’s book. During the 1880s a vigorous outpouring of literature from these two followers, from several of Menger’s students, and in particular a methodological work by Menger himself, brought the ideas of Menger and his followers to the attention of the international community of economists. The Austrian School was now a recognized entity. Several works of Böhm-Bawerk and Wieser were translated into English; and by 1890 the editors of the US journal Annals of the American Academy of Political and Social Science were asking Böhm-Bawerk for an expository paper explaining the doctrines of the new school. What follows seeks to provide a concise survey of the history of the Austrian School with special emphasis on (a) the major representatives of the school; (b) the central ideas identified with the school; (c) the relationship between the school and its ideas, and other major schools of thought within economics; (d) the various meanings and perceptions associated today with the term Austrian Economics.