New Thinking in Political Economy series
Chapter 5: Ludwig von Mises and the Gold Standard
In the 1930s, Oskar Morgenstern once gently criticized British economist Lionel Robbins for creating a false impression of the Austrian School of Economics to English-speaking readers. Morgenstern argued that, in The Nature and Significance of Economic Science, Robbins had represented ‘the Viennese economists … in certain important points as being much more of a school with uniform views than they really are’.1 What Morgenstern was alluding to was the fact that, while those whom we now classify as the inter-war members of the Austrian School viewed themselves as sharing an intellectual heritage coming from the earlier writings of Carl Menger, Eugen von Böhm-Bawerk and Friedrich von Wieser, there was no unanimity among them concerning either the theoretical or policy implications of that heritage.2 On the one hand, the Austrians stood as a cohesive group in their emphasis on methodological individualism, their focus on the subjectivist nature of the data of economic science and in their defence of a ‘causal-genetic’ or process analysis of economic phenomena in opposition to the ‘functional’ or equilibrium approach of the Lausanne school.3 On the other hand, extensive and often heated debates were carried on within the school; among the questions in dispute were whether economics was an a priori or an empirical science, the role of psychological elements in the theory of value, the laws of imputation of value to factors of production, and the basis for the discounting of future goods against present goods. In matters of policy, unanimity was just as rare. In...
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