Introduction

Abstract

The Austrian and the neoclassical paradigms were both part of the revolt against classical economics in the 1870s and both strove for a purely theoretical economics based on deductive reasoning, as against the inductive method of the German and English Historical Schools, then also in the ascendant. More than any other school in economics the Austrian school has a reputation for being highly critical of economic methodologies, theories and policies not in accordance with its own tenets. Even more than the Methodenstreit, the ‘socialist calculation debate’ is responsible for the pugnacious image of the Austrian school and its reputation for persisting in opposition even when the tide of economic theorizing is against it. Unfortunately for Austrian economics, the moment when its leading theorists recognized the distinctiveness and import of their approach coincided with the eclipse of that approach in academic and professional circles. The chapter also presents an overview of the key concepts discussed in this book.