The Birth of the Austrian School

In the opening lecture of Mises University, Joseph Salerno returns to 1871, when Carl Menger’s Principles of Economics launched the Austrian school. Salerno shows how Menger’s law of marginal utility solved the ancient “paradox of value”—why life-giving water is cheap and useless diamonds dear—and, in doing so, moved economics away from the classical focus on the businessman and cost, and toward the acting, wanting human being.

Recorded at the Mises Institute in Auburn, Alabama, on July 20, 2025.

Mises University is the world’s leading instructional program in the Austrian School of economics, and is the essential training ground for economists who are looking beyond the mainstream.