Articles of Interest

Friedrich von Wieser and Friedrich A Hayek: The General Equilibrium Tradition in Austrian Economics

Friedrich von Wieser and Friedrich A Hayek: The General Equilibrium Tradition in Austrian Economics

Bruce Caldwell has disputed a number of points in Salerno's earlier account of the development of the Austrian school of economics from Carl Menger to Ludwig von Mises and F.A. Hayek. The issues in contention regard Friedrich von Wieser’'s intellectual affiliation with Hayek and his influence on the formation of Hayek’s economic thought; Wieser’'s status as a general equilibrium theorist; and the reason for Hayek’'s early flirtation with general equilibrium theory.

In this article Salerno argues that Hayek was a self-conscious adherent of the Wieserian tradition and remained so even after he received the Nobel Prize in 1974 and that he distinguished between this tradition and the Böhm-Bawerkian tradition followed by Ludwig von Mises. Salerno also contends that Wieser used the construction of a general equilibrium economy subject to a single will as both a normative benchmark by which to appraise the performance of the real-world market economy and as an analytical tool to explain the formation of market prices.

Finally, Salerno argues that Hayek concerned himself with the problems of the Wieser-type general equilibrium economy beginning with his earliest writings as a professional economist, years before he began to focus on the theoretical problems of money and the business cycle.

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