History of the Austrian School of Economics

A tribute to Ludwig von Mises written by Murray N. Rothbard. This article appeared in the Libertarian Review, April 1978, pp. 37–38.

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Where the classical economists had gone wrong was to speak of goods as if they were abstract classes. The Austrians noted that their value theory did not talk about concrete units and could not explain how individuals valued goods.

There were reasons for the decline of the Austrian School before its revival and rebirth by Mises and Rothbard. There was an Israel Kirzner view in the 1970s that the Keynesian avalanche had buried Austrian economics in 1936. Then there is a big bang theory of its rebirth in 1974 due to the South Royalton meeting and Hayek receiving the Nobel Prize.

What inspires us about the life of Mises, writes Lew Rockwell, is not his victimhood but his triumph over evil.

This year marks the 100th anniversary of Ayn Rand's birth. Her books sold in the millions and were most effective in transforming a generation of readers into ardent anti-communists and strong capitalists.

Biographical remarks about Lachmann (1906-1990). Then, Lachmann describes Austrian economics as being subjectivism (individual human action), a certain attitude to time (the future is unknowable), and a distrust of macroeconomic entities (they exist, but Austrians look at macro as mechanistic).

Was George Stigler sympathetic to the Austrian school? Lachmann doesn’t think so because Stigler was a favorite student of Knight. Austrians should have dealt with Keynes, instead they quarreled with Knight.

What policies do Austrians pursue? Those that favor the market.

Recorded at the Ludwig von Mises Institute, Auburn, Alabama; 5-6 February 1999.

A number of writers have, on occasion, claimed to have perceived a con­tradiction in Mises, writes Israel Kirzner. The tension between science and values can, in fact, be resolved.