War and the Austrian School: Applying the economics of the founders

Scott A Kjar,William L Anderson

doi:10.15355/epsj.5.1.6

Abstract

The Austrian school of economics is generally considered an antiwar school. The Austrian view is not derived from a religious or class-based ideological view. Instead, it derives entirely from the school's fundamental economic tenets. This article applies the economic views of the Austrian school's founders - Menger, Bohm-Bawerk, and Wieser - to the issue of war.

Highlights

Carl Menger’s 1871 [1976] book, Principles of Economics, challenged existing economic orthodoxy by affirming and rejecting ideas found in two major economic schools of thought of the time, the German Historical School and the British Classical School
We examine the economic thoughts of the three founders of the Austrian School, Carl Menger, Eugen von Böhm-Bawerk, and Friedrich von Wieser, and apply their thinking to the economics of war
Wieser served as Austrian Minister of Commerce during World War I, according to Mises (1984, p. 6), his powers were quite limited and his decisions “secondary.” the Austrian economic doctrines with their emphasis upon nonintervention, subjective value, and opportunity cost clearly would place them against anyone, economist or otherwise, who would support war as a means to boost an economy, given that war itself is the most radical of all government interventions

Summary

Aggressive war contradicts

Like Adam Smith, he wishes to promote civilization, not destroy it. War goods are not Mengerian goods outside of their direct relationship in meeting an individual’s needs for defending oneself. Menger described what he called imaginary goods, which people wrongfully believe will satisfy their needs. Menger thought that people could believe that the good satisfies a need when, it does not, such as drinking salt water to quench one’s thirst. People could believe a good satisfies a nonexistent need, and we place aggressive war and those things used to achieve it into that category

Austrian economics and classical views of production and consumption

Conclusion