Menger’s Work in the German Context
Menger’s Work in the German Context
The ancient subjectivist theory of value had survived in fragmentary form in nineteenth-century German economic writings.25 In this context, the young economist from Vienna was seen as a reformer rather than a revolutionary, thus avoiding the fate of Condillac.
Methodenstreit
Methodenstreit
Meanwhile, in the universities of the German Reich, a vigorous movement had emerged that pursued an agenda diametrically opposed to Menger’s view and advocated a radical break with the traditional approach in economic science.30 While Menger sought to turn economic theory into an analytical science, the young radicals in Berlin pursued a complete overthrow of theoretical research, replacing it instead with historical studies.
The Austrian School and the Gossen School
The Austrian School and the Gossen School
With just two books, Menger had put economic and social thought on completely new foundations. Principles pioneered the application of the empirical method in economic theory, and Investigations had justified the method and clarified the relationship between the resulting theory and other social sciences.
The Breakthrough of the Austrian School
The Breakthrough of the Austrian School
At the University of Vienna, Menger faced the determined opposition of Lorenz von Stein, the great champion of French socialism in Germany and Austria.61 Stein rejected Menger’s first petition for the Habilitation degree, accepting his application only after Menger had his Principles printed by the Vienna publisher Wilhelm Braumüller at his own expense and sent a proof of the first two chapters to Stein. Having accepted his application, Stein still failed Menger for the degree.
Eugen von Böhm-Bawerk
Eugen von Böhm-Bawerk
At the time of Menger’s petition for early retirement, Eugen von Böhm-Bawerk was his most prominent disciple, serving a fourth term as the head of the Austrian (k.k.) Ministry of Finance.
Friedrich von Wieser
Friedrich von Wieser
Mises never studied under Wieser, though it is likely that Wieser, having come to occupy Carl Menger’s chair at the University of Vienna in 1903, was one of Mises’s examiners in government science. Wieser was born in 1851 in Vienna, the son of a high civil servant. He was a tall and handsome man, aristocratic in manners, with clear blue eyes and, in later years, with an impressive long beard. His thorough acquaintance with art and literature was legendary, and he was himself an accomplished piano player.
Joseph A. Schumpeter
Joseph A. Schumpeter
With his notable 1902 study on the pre-1848 relationship between Galician lords and peasants, Mises had started off as a star student in the camp of mainstream historicist economics. When he turned to economic theory à la Carl Menger, he lost the support of this very influential network. After the death of Böhm-Bawerk, academia had little use for the Mengerian tradition that Mises maintained and developed. He would remain outside both the waning tradition of historicism and the emerging influence of neoclassical economists.
5. Early Professions
Difficult Start in Professional Life
Difficult Start in Professional Life
This was the traditional choice of the sons of civil-servant families.
The Parallel Life
The Parallel Life
During these years, Mises’s scholarly enterprises compensated for the dismal courtroom routine. The first result of his research on monetary theory and policy was a published paper on the motives underlying Austrian foreign-exchange controls. The article appeared in Böhm-Bawerk’s Zeitschrift für Volkswirtschaft, Socialpolitik und Verwaltung and dealt with the ways in which interest groups promoted price and production controls.15 He followed up in 1908 with a survey of recent literature on money and banking.16
