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Principles of Economics

  • Principles of Economics by Carl Menger

Tags Austrian Economics OverviewMoney and Banking

07/20/1871Carl Menger

It was this book that kicked-off the Marginalist Revolution, which corrected theoretical errors of the old classical school. These errors concerned value theory, and they had sown enough confusion to make the dangerous ideology of Marxism seem more plausible than it really was.

Menger set out to elucidate the precise nature of economic value, and root economics firmly in the real-world actions of individual human beings.

For this reason, Carl Menger (1840-1921) was the founder of the Austrian School of economics. It is the book that Mises said turned him into a real economist. What's striking is how nearly a century and a half later, the book still retains its incredible power, both in its prose and its relentless logic.

The Mises Institute's new edition features a new foreword by Peter G. Klein, which summarizes Menger's contribution and places him in the history of ideas. He also explains his continued relevance.

Economics students still say that it is the best introduction to economic logic ever written. The book also deserves the status of a seminal contribution to science in general. Truly, no one can claim to be well read in economics without having mastered Menger's argument.

Menger advances his theory that the marginal utility of goods is the source of their value, not the labor inputs that went into making them. The implication is that the individual mind is the source of economic value, a point which started a revolution away from the flawed classical view of economics.

Menger also covers property, price, time, production, and wealth. On money, for example, it was Menger who so beautifully explained how it originates not in social contract or legislation but within the framework of the market economy.

 

Author:

Carl Menger

Carl Menger founded the Austrian School of economics. Menger, along with Jevons and Walras, published a work in 1871 which revolutionized the way economists viewed value and price theory by introducing innovations in the theory of marginal utility. His work was profoundly influential in Europe, where it inspired the work of Ludwig von Mises and Friedrich Hayek. 

References

James Dingwall and Bert F. Hoselitz, trans., New York: The Free Press, 1950. Online edition, The Mises Institute, 2004.

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