Classics in Austrian Economics, 3 volumes

An Indispensable Collection of Material for Economic Scholars and Students

When Carl Menger published his seminal book on economic theory in 1871 he established a tradition of economic scholarship that is still attempting to come to terms with his revolutionary insights into human action and the exchange process. As Mises reports in Notes and Recollections, it was upon reading Menger’s Principles that he became an economist. From 1871 to the 1930s, this was figuratively true of all those within the Austrian School of Economics, including such well-known economists as Eugen von Bohm-Bawerk, Friedrich von Wieser, Franz Cuhel, Richard von Strigl, Hans Mayer, Paul Rosenstein-Rodan, Gottfried Haberler, Leo Schonfeld, Fritz Machlup, Oskar Morgenstern, and, of course, F. A. Hayek. The 1930s, however, saw the destruction of the intellectual base for the Austrian School of economics, Vienna, as most of the remaining scholars within the tradition fled Austria to escape Hitler. Haberler, Machlup, and Morgenstern launched successful academic careers in the United States at Harvard (Haberler) and Princeton (Machlup and Morgenstern). However, their Austrian roots—while forever present —were not emphasized in their economic scholarship during their professional period in the United States. Mises and Hayek, of course, continued to refine the Austrian tradition with their brilliant work on the trade cycle and on the problems of socialist economic and political organization, as well as their work on the philosophical foundations of economic science. But, by the late 1930s, early 1940s, the Austrian School of Economics was thought to be either fully incorporated into the mainstream or soundly defeated in scholarly debate. This assessment has been subsequently proven wrong on both counts.

One of the difficulties with the Austrian tradition was plainly and simple translation difficulties. For example, Austrian capital theory formed the core of both the trade cycle theory and the critique of socialist calculation, yet economists trained in the English-language tradition did not see the point of the Austrian notion of a time structure of production, and therefore, were not particularly impressed with the Mises-Hayek demonstrations of either the problems with malinvestment caused by monetary manipulation or the inability of socialist planners to rationally calculate the alternative use of scarce capital goods amongst various investment projects. Certainly during the period between 1940 and 1970 there were some prominent theorists who argued against inflationary monetary policy and the advance toward socialism, but they did not base their argument on the reasons associated with Austrian economics.

In the 1970s that was to change. First, in 1974 Hayek won the Nobel Memorial Prize in Economic Science, which brought with it renewed attention to the economic theory, as opposed to political theory, work he had done in the 1930s and 1940s. Second, beginning in 1973, Israel Kirzner had started a resurgence of interest in the Austrian theory of the market process with his seminal Competition and Entrepreneurship. Kirzner also worked to establish an Austrian Economics Program at New York University, which supported both post-doctoral scholarship and student training in the Austrian tradition—the first institutional home for Austrian School scholarship since the 1930s.

Kirzner was a tireless champion for the Austrian cause. Since then he has published four additional works and edited two other collections of articles in the Austrian tradition. Now, he offers us a three-volume “sampling of a tradition”—as the subtitle states. Classics in Austrian Economics includes contributions to economic scholarship made by all the individuals I listed above beginning with Menger. Volume 1 is devoted to the early contributions. Some of the chapters are available in other works, such as Menger’s Principles or Bohm-Bawerk’s Capital and Interest, but many are not. In fact, as is the case with all three volumes there are original translations from the German that were produced for this project.

Volume 2, which covers the interwar years when Austrian economics flourished as a scientific body of thought, includes the an original translation of the classic paper by Hans Mayer on genetic-causal explanation within economic science. In addition, Richard von Strigl’s discussion of the relationship between economic theory and economic policy is translated.

Volume 3 is devoted to the age of Mises and Hayek and contains many of their seminal articles on methodology, money and capital theory, and the nature of the market process (including the critique of socialism). Israel Kirzner must be thanked for bringing together such a fine “sampling” of the Austrian tradition. The price of the volumes (around $300) will preclude individual consumption of these volumes . . . that is too bad, though understandable given the publisher’s purpose in producing this volume, which is to supply the reference market within libraries. But, it would be good if word-of-mouth advertising helped the publisher place these volumes in as many libraries as possible.

Not only did Kirzner organize this project, but he provides substantive introductions to each volume. His introduction to volume 1, for example, is quintessential Kirzner. With careful scholarship, Kirzner demonstrates the unity between Menger’s vision of economic science as emanating out of the human choice problem and Mises’ project in Human Action. Moreover, his history of the rise, fall, and then resurgence of the Austrian School is, I would be tempted to say, worth the price of the book—though given the price of the volumes this market is obviously what we economists refer to as very “thin.” Nevertheless, Classics in Austrian Economics is an indispensable collection of material for scholars and students committed to serious study of the Austrian tradition. Hopefully, these volumes will make their way onto the library shelves at a large number of universities and colleges so that many will have access to their wealth of material.

Dr. Boettke teaches economics at New York University.

Further Reading