The Austrian School of Economics

A History of Its Ideas, Ambassadors, and Institutions

Eugen Maria Schulak

and

Herbert Unterköfler

Translated by Arlene Oost-Zinner

Copyright © 2011 by the Ludwig von Mises Institute

Published under the Creative Commons Attribution License 3.0.

http://creativecommons.org/licenses/by/3.0/

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Translator’s Note

The goal of this translation is accurately to convey the content of its original German counterpart, as well as the breezy style of its unmistakably Austrian authors. Word choice was of prime consideration throughout, followed by clear English syntax and contemporary idiomatic usage. The book contains many citations from German works never before translated. All passages falling into this category have been rendered in English for the first time in this edition.

Preface to the English Edition

When preparations for the 2008 German edition were complete, the prospect of an English translation lay in the far distance. That it would come about so quickly, only shortly after the German edition’s appearance in 2009, is owed to our friend and mentor, Hans-Hermann Hoppe. He not only lent his support and good counsel in the case of the first German edition— now in its second edition—but also brought it to the attention of the Ludwig von Mises Institute, suggesting it publish a translated edition.

Preface

After several years of preparatory work and many interruptions, it seems an odd coincidence that the authors completed their manuscript at the very time a global crisis in the financial sector suddenly became evident to all. Economic developments since that time appear only to confirm many fundamental insights of the Austrian School of economics, especially those in monetary and business cycle theory. Longstanding, low interest rate policies in the U.S.

The Austrian School in Brief

The Austrian School of Economics, also called the Viennese School of economics, was founded by Carl Menger in Vienna during the last third of the nineteenth century. From that time until today, its vibrant teaching tradition has had a significant influence on the formation and further development of the modern social sciences and economics in Europe and the United States.

CHAPTER 1

Vienna in the Mid-Nineteenth Century

Sometime during the late summer months of 1859—we do not know precisely when—a fatherless, nineteen-year-old youth from Biala/Bielitz on the Galician–Silesian border set off for Vienna with a Maturitätszeugnis1 from Krakow Gymnasium2 in his luggage, and perhaps a letter of recommendation or two from a teacher or relative as well. He was one of many from the so-called crown lands pouring into the incessantly growing “Royal-Imperial Capital and Residential City”3 of Vienna.