Carl Menger

Carl Menger (February 23, 1840 – February 26, 1921) was an Austrian economist, known as founder of the Austrian School of economics. Menger contributed to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.

Carl Menger.

Quotes

• There is no better means of reducing a fallacious variety of thought to absurdity than to let it live itself out completely.
  • Attributed to Carl Menger in: Ludwig Von Mises, "Comments about the mathematical treatment of economic problems." Journal of Libertarian Studies, Spring 1977, 1(2), p. 100

Principles,

Carl Menger, Principles,

• The time period lying between command of goods of a higher order and possession of the corresponding goods of lower order can never be eliminated.
  • p. 67; cited in: Randall G. Holcombe, Great Austrian Economists, p. 90

• Assuming... that all available goods of higher order are employed in the most economic fashion, the value of a concrete quantity of a good of higher order is equal to the difference in importance between the satisfactions that can be attained when we have command of the given quantity of the good of higher order whose value we wish to determine and the satisfactions that would be attained if we did not have this quantity at our command.
  • p. 164-5; cited in: Randall G. Holcombe, Great Austrian Economists, p. 90

Investigations into the Method of the Social Sciences, 1883

Carl Menger (1883). Investigations into the Methods of the Social Sciences with Special Reference to Economics. New York: New York University Press, 1985; Ludwig von Mises Institute, 1985/1996

• Not only in the realm of the ethical world, and of economy, but also in that of natural phenomena, the realistic orientation of theoretical research can lead only to "real types" and "empirical laws." And in the above point of view, at any rate, no essential difference between the ethical and the natural sciences exists, but at most only one of degree. The realistic orientation of theoretical research excludes in principle, rather, in all realms of the world of phenomena the possibility of arriving at strict (exact) theoretical knowledge.
  • p. 58

• How can it be that institutions which serve the common welfare and are extremely significant for its development come into being without a common will directed toward establishing them?
  • p. 146

• The solution of the most important problems of the theoretical social sciences in general and of theoretical economics in particular is thus, closely connected with the question of theoretically understanding the origin and change of 'organically' created social structures.
  • p. 147

Quotes about Carl Menger

• Almost everything that makes the Austrian school of economics distinctive was found in Menger—marginal utility, subjective value, emphasis on knowledge and foreknowledge, the importance of prices, spontaneous generation of societal institutions, and economic activity as a process occurring over time. From a more practical perspective, during the 1890s and early 1900s, he was the informal leader of a group of civil servants and academics who regularly met for coffee at Vienna’s famous coffeehouses to discuss the issues of the day.
  • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 3. The Austrian School of Economics
• Carl Menger was a civil servant in the prime minister's office at Vienna when at the age of thirty-one he published his first and decisive work, Principles of Economics. It was the first part of an intended treatise, the rest of which never appeared. It dealt with the general conditions that create economic activity, value, exchange, price, and money. What made it so effective was that the explanation of value it offered arose from an analysis of the conditions determining the distribution of scarce goods among competing uses and of the way in which different goods competed or cooperated for the satisfaction of different needs—in short, what has been called above the 'means-ends structure'. It is this analysis that precedes the theory of value proper. Friedrich von Wieser was to develop this systematically into a vorwerttheoretische part of economic theory that made the Austrian form of marginal utility analysis so suitable as a basis of further development. From this analysis springs most of what is known today as the logic of choice, or the 'economic calculus'.
  Menger's exposition is generally characterised more by painstaking detail and relentless pursuit of the important points than by elegance or the use of graphic terms to express his conclusions. Though always clear, it is laboured, and it is doubtful whether his doctrines would ever have had wide appeal in the form in which he stated them. However, he had the good fortune of finding at once avid and gifted readers in two young men who had left the University of Vienna some time before Menger became a professor there. They decided to make the fulfillment of his teaching their lifework. It was mainly through the work of Eugen von Böhm-Bawerk and Friedrich von Wieser, classmates and later brothers-in-law, that Menger's ideas were developed and spread. Gradually during the 1880s, when their most influential works appeared, they were joined by others working in the universities or elsewhere in Austria. Of these, Emil Sax (1845–1927), Robert Zuckerkandl (1856–1926), Johann von Komorzynski (1843–1912), Viktor Mataja (1857–1933), and Robert Meyer (1855–1914) particularly deserve mention. Somewhat later came Hermann von Schullern zu Schrattenhofen (1861–1931) and Richard Schüller (1871–1972).
  The year 1889, in which the greatest number of important publications of the group were concentrated, also saw the appearance of an important theoretical treatise by two Viennese businessmen, Rudolf Auspitz and Richard Lieben, Untersuchungen über die Theorie des Preises. This can, however, only with qualifications be included in the works of the Austrian school. It moved on parallel but wholly independent lines and with its highly mathematical exposition was too difficult for most contemporary economists, so that its importance was recognised only much later.
  Of great importance for spreading the teachings of the school, especially in Germany, was the fact that another Viennese professor, Eugen von Philippovich von Philippsberg (1858–1917), though not himself an active theoretician, incorporated the marginal utility doctrine into a very successful textbook, Grundriß der politischen Okonomie. For some twenty years after publication this remained the most widely used textbook in Germany and almost the only channel through which the marginal utility doctrine became known there. In other foreign countries, especially England, the United States, Italy, the Netherlands, and the Scandinavian countries, the basic economic publications of the Austrians became known sooner, partly in English translations. Probably the most important foreign adherent was an exact contemporary of Böhm-Bawerk and Wieser, the Swede Knut Wicksell. Although he was also greatly indebted to Walras, Wicksell could write in 1921 that "since Ricardo's Principles there has been no other book—not even excepting Jevons's brilliant but somewhat aphoristic and Walras's unfortunately difficult work—which has had such a great influence on the development of economics as Menger's Grundsätze".
  • Friedrich Hayek, "The Austrian School of Economics", published in The Fortunes of Liberalism (1992)

• The development of economics as a science which is always based on human beings, the creative actors and protagonists in all social processes and events (the subjectivist conception), is undoubtedly the most significant and characteristic contribution made by the Austrian School of economics, founded by Carl Menger. In fact Menger felt it vital to abandon the sterile objectivism of the classical (Anglo-Saxon) school whose members were obsessed with the supposed existence of external objective entities (social classes, aggregates, material factors of production, etc.). Menger held that economists should instead always adopt the subjectivist view of human beings who act, and that this perspective should invariably exert a decisive influence on the way all economic theories are formulated, in terms of their scientific content and their practical conclusions and results.
  • Jesús Huerta de Soto (2006/12), Money, Bank Credit, and Economic Cycles, p. 267, Note 3,

External links

• "Carl Menger." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty.