Economics · A History of Economic Thought by V Lokanathan
Chapter 22 : THE AUSTRIAN SCHOOL
Table of contents23 sections
- 1.THE AUSTRIAN SCHOOL
- 2.Key Terms
- 3.📌 Exam Tidbits
- 4.Main Principles of the Austrian School
- 5.Key Terms
- 6.📌 Exam Tidbits
- 7.Time Structure of Consumption and Production
- 8.Key Terms
- 9.📌 Exam Tidbits
- 10.Carl Menger (1840-1921)
- 11.Key Terms
- 12.📌 Exam Tidbits
- 13.Friedrich Von Wieser
- 14.Key Terms
- 15.📌 Exam Tidbits
- 16.Bohm-Bawerk (1851-1914)
- 17.Bohm-Bawerk's Theory of Capital and Interest
- 18.Key Terms
- 19.📌 Exam Tidbits
- 20.Criticism
- 21.Key Terms
- 22.📌 Exam Tidbits
- 23.Quick-Recall Box
Chapter preview
THE AUSTRIAN SCHOOL
Carl Menger was the founder of the Austrian school. The school's foundations are derived mainly from Menger's Principles of Economics (1871) and Problems of Economics and Sociology (1883).
- Co-founders: Bohm-Bawerk and Friedrich Von Wieser (belonging to the second generation) are regarded as the co-founders of the school. In fact, Carl Menger, Wieser, and Bohm-Bawerk are considered as the three pillars of the Austrian school.
- Distinctions: The Austrian school of Economics differs in essential respects from the Classical school, the Historical school, and from the Marxian, Institutional and Mathematical economics. It is generally regarded as non-mathematical.
- Internal Disagreement: Austrian Economics is not a completely uniform system accepted in every detail by all the members of the group. Even the leaders of the school disagreed with one another on several issues.
- Later Influence: The writings of Bohm-Bawerk and Wieser helped to spread Austrian Economics throughout the world. The later generation Austrians such as Ludwig Von Mises and Friedrich A. Von Hayek had great influence among economists.
| Stage of Development | Core Tenets / Focus Areas |
|---|---|
| 1890s | Marginalism, diminishing marginal utility, costs as foregone utility, and imputation of value to complementary factors were considered as the characteristic tenets of the school. |
| Later Years | Major emphasis was placed by the followers of the school on methodological individualism and subjectivism. |
Key Terms
| Concept | Definition |
|---|---|
| Austrian Economics | A non-mathematical school of economic thought founded by Carl Menger, differing from Classical, Historical, Marxian, Institutional, and Mathematical economics. |
📌 Exam Tidbits
- Carl Menger | 1871, 1883 | Founder of the Austrian School; authored Principles of Economics and Problems of Economics and Sociology.
- Bohm-Bawerk & Friedrich Von Wieser | Co-founders and second-generation leaders; alongside Menger, they form the "three pillars" of the school.
- Ludwig Von Mises & Friedrich A. Von Hayek | Later generation Austrians who exerted great influence among economists.
- 1890s vs Later Years — the difference is the 1890s focused on marginalism and utility, while later years shifted emphasis to methodological individualism and subjectivism.
Main Principles of the Austrian School
Most of the members of the Austrian school believed in the…
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