The history behind the
The setting of the Pre-Austrian movement during the 15th century St. Thomas Aquinas thought at
In the years of the Marginal Revolution Richard Cantillon, an economist who understood that the market is a process and it is always evolving. Cantillon was an Irish that established himself in
Carl Menger wrote in 1871 a master piece Principles of Economics. Menger is the founding father of the
Menger contributions to economics are numberless and in the world of ideas Menger had a tremendous antagonism from different groups. Menger mentioned that economics was a science of human action based on deductive logic. In the battle of ideas Menger was challenged by the German Historical School. The Historical School saw economics as a dismal science and rejected its theory. Menger rose and prevailed over the criticism and planted and seeded that would become into a mainstream of Austrian Economics.
It was Friederich von Wieser who developed Menger’s point of marginal utility. It was precisely Wieser who invented the term “Grenznutzen” German for border-use or commonly known as marginal utility. Wieser and Eugen von Boehm-Bawerk, both Menger’s students, took Austrian Economics to a different level. Boehm-Bawerk reflected on the fact of time preference and used it to explain economic phenomenon such as; value, price, capital and interest. Boehm-Bawerk put together his ideas and in 1884 wrote his book History and Critique of Interest Theories.
In the early 20th century Ludwig von Mises entered to the picture of Austrian Economics and not only that he entered it but he consolidated it as the school that it is in the present. One of Mises important contributions to the school it is the idea of the Austrian Business Cycle. Unlike other explanations of booms and burst within the economy Mises’ explanation is by far more enriching and more precise. Mises is an individual who can be studied for years and years and there will be more of him to learn and understand.
In 1921 Mises wrote his book Socialism. In this book Mises explains in detail how in socialism there is no private property, with no private property there is no exchange of capital goods. When humans are unable of exchange there is not a proper allocation of resources. To Mises socialism is nothing else than chaos and the end of civilization. Furthermore, Mises prolific master piece came out in 1949. During his exile, due to political persecution by the Fascist Government of Germany, in
A disciple of Mises, Friederich A. Hayek took the teachings of his master (Mises) and brought them to the next level. Hayek wrote extensively on how expansion of credit would create currency crisis. Hayek’s counter part was John Maynard Keynes, British aristocrat who advocated for more government intervention within the market. Hayek and Keynes enjoyed of a battle of ideologies during the second half of the 20th century. In 1974 Hayek received the Nobel Prize in Economics for his contribution on theory of money and economic fluctuations, economics interdependence, social and institutional phenomena.
I hope that you have enjoyed this brief passage on the history of the
Note: This post is based on the article wrote by the Ludwig von Mises Institute.