On Karl Menger's Eightieth Birthday

The development of the sciences does not proceed in a steady and uninterrupted ascent; periods of great achievement are followed by ones of intellectual exhaustion, the masters are followed by the epigones, until once again men of genius bring about a new flowering. By the middle of the nineteenth century, economics had undoubtedly reached a dead end. The system handed down by classical economics was felt to be unsatisfactory, yet one was unable to advance beyond it. To formulate the problems that had to be solved here even correctly required men who were no less brilliant than Ricardo. Such men were lacking. Even John Stuart Mill, the most original economist of those days, was not the man for it.

The Frenchman Dupuit and the Prussian assessor Gossen had attempted to take the path that had to be taken. Without knowing their writings, which had fallen into oblivion, and independently of one another, around 1871 Karl Menger in Austria, Jevons in England, and Léon Walras in Switzerland came forward almost simultaneously. Their works display a remarkable agreement in all fundamental matters. Most sharply, however, this fundamental idea — the thoroughgoing erection of the theory of value upon the subjective use-value of goods — is worked out in Menger. His Grundsätze der Volkswirtschaftslehre, a slim volume, completely revolutionised the science of economics. Everything that has been achieved since builds upon Menger's works. In Austria the theory of marginal utility found its most significant representatives, alongside Menger, in Wieser and in the far too early departed Böhm-Bawerk; these three are customarily grouped together under the designation “The Austrian School,” and under this name they have won world renown. They were able to find the least recognition in Germany; their success was incomparably greater in England, in Italy, in the Netherlands, and in the Scandinavian countries. Modern American economics rests upon the works of the “Austrian School.”

In 1883 Menger published his Untersuchungen über die Methode der Sozialwissenschaften und der politischen Ökonomie insbesondere. With this book, which was initially conceived as a critique of the relativism and historicism then prevailing in Germany, he pointed out new paths for the logic and epistemology of the human sciences. This book too received little attention at first; more than twenty years passed before its significance was fully recognised. The more recent methodological works stand entirely under the influence of this work.

Menger was no prolific writer; his publications take up little space in terms of volume. He also only rarely took up the pen in order to contribute to the clarification of current economic questions. Of the questions of the day, it was the currency problem that attracted him most. His short treatise on the Austrian currency problem and his remarks at the currency inquiry of 1892 decisively influenced the reform of Austrian monetary affairs. He also treated the theory of money repeatedly in a purely theoretical manner, above all in a classic contribution to the Handwörterbuch der Staatswissenschaften.

Menger's works, as already mentioned, long failed to find appreciation; only later were they fully recognised, and from year to year their reputation grew. Today one may say without exaggeration that the Austrian School of economics occupies an imperishable position in the history of the social sciences. Karl Menger can look back upon his life's work with pride and satisfaction. May it still be granted to him to bring to completion the great works with which he is occupied.