Table of Contents

Handbook on the History of Economic Analysis Volume I

Handbook on the History of Economic Analysis Volume I

Great Economists Since Petty and Boisguilbert

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume I contains original biographical profiles of many of the most important and influential economists from the seventeenth century to the present day. These inform the reader about their lives, works and impact on the further development of the discipline. The emphasis is on their lasting contributions to our understanding of the complex system known as the economy. The entries also shed light on the means and ways in which the functioning of this system can be improved and its dysfunction reduced. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 43: Carl Menger (1840–1921)

Gilles Campagnolo

Subjects: economics and finance, history of economic thought


Vienna, the capital city of Mitteleuropa, was at the turn of the nineteenth to twentieth century the place where modernity broke away from received ways of thinking in the fields of philosophy (Wittgenstein), psychology (Freud), architecture (Loos), painting (Klimt), literature (Musil), music (Schönberg) – and many more. Vienna also hosted the founder of the school later known as the “Austrian school of economic thought”, Carl  Menger. At the same time as Léon Walras and William Stanley Jevons, Menger developed the marginalist method in economics and especially marginal-utility reasoning, and paved the way to the so-called “neo-classical” economics and provided a basis for a renewal of economic liberalism. Johann Heinrich von Thünen and Hermann Heinrich Gossen anticipated part of what the three authors were credited with, but Menger’s views on economic utility set him apart from these lesser-known predecessors as well as from his contemporaries; indeed, his stress on subjectivity and dynamics differentiates him from the other two founding fathers of marginalism. The way Menger incorporated the subjectivity of economic agents into a rigorous methodological individualism – a phrase coined by his disciple Friedrich von Wieser and popularized by Josef Schumpeter – made Menger stand against the German Historical School in the so-called “Methodenstreit” (“dispute over the methods”). The role Menger attributed to ignorance, time, human cognition and the environment set the Austrian mode of reasoning apart from the other strands of marginalism, a fact that has been overlooked for a long time, until “de-homogenization” of these views was undertaken (see...

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