The Austrian School: Its History and Relevance in Modern Economics

As a part of a series exploring the Principles of Economics by Carl Menger, this blog post looks at Menger's solution to the "Diamond-Water Paradox." The paradox illustrated an error in thinking associated with Classical economists. Menger's answer--a key feature of the Austrian school--was the theory of subjective value and marginal utility. Menger said things like land, capital, water, and...

Rockwell's daydream about an unimportant, decentralized, largely symbolic President of the United States offers a stark contrast to the current executive branch, which has a vast amount of public wealth at its disposal.

"It's not just history buffs who now study the 1937-38 recession. The question is: Are we stumbling into a similar downturn?"

Ebeling offers an insightful interview on his own introduction to the Austrian school, the differences between Austrian and Chicago economics, and the outlook for Austrians.

"Despite the many illustrious forerunners in its six-hundred year prehistory, Carl Menger (1840-1921) was the true and sole founder of the Austrian school of economics proper. He merits this title if for no other reason than that he created the system of value and price theory that constitutes the core of Austrian economic theory. But Menger did more than this: he also originated and...

"I do not subscribe to the conventional economics view of how the world works. If there are two theories that animate the Powers That Be when it comes to defining Economics, they are the Output Gap theory of inflation and Keynesianism (the idea that putting cash in consumers’ pockets will generate a huge spending response)."

"The principles for guiding the proper stewardship of economic resources apply equally to the stewardship of natural resources. This section will examine different perspectives for allocating the scarce resources of the earth. It will emphasize an economic perspective that serves both the needs of the human person and maintains the integrity of creation, while...

Rothbard is commonly considered one of the leading Austrian economists of the later 20th century. In this encyclopedia entry, he outlines the essentials of the free market and its facilitation of free and genuine exchange.

"Many observers, including most politicians, have blamed the ongoing financial crisis on the 'free-market greed' supposedly unleashed by the 'reckless deregulation' of the financial system. Such arguments are rhetorically powerful, but they don't stand up to scrutiny.

If they go unchallenged, however, they could hasten a 'solution' that's worse than the problem. That's why it's so...

Obviously economics involves a dependence on numbers, but Austrians are wary of replacing logic with an awe for statistics and formulas.

"One of the most common errors in applied mathematical analysis is to fail to notice when a mathematical argument proves too much. This occurs when the same argument can be deployed more generally than in the particular case being considered, and in...

Inflation is perhaps the most misused term in economics. Steve Horwitz attempts to give a clear definition.

These remarks were written upon the retirement of Israel M. Kirzner, a prominent Austrian economist. Ebeling describes Kirzner's life and his contribution to economics, particularly in the area of entrepreneurship. Ebeling then goes on to elaborate about Kirzner's influence on the study of entrepreneurship, noting that, "In Israel Kirzner’s view, one of the most important reasons for open,...

Proponents of the Austrian school, more so than mainstream economists, are greatly concerned with microeconomics and price theory. As Harberger summarizes,"[u]ntil the so-called Keynesian revolution of the late 1930s and 1940s, the two main parts of economic theory were typically labeled 'monetary theory' and 'price theory.' Today, the corresponding dichotomy is between 'macroeconomics' and '...

"[O]ne of the most damning pieces of evidence against Obamanomics is that the economy is suffering from sub-par growth, something that is particularly damning since normally one expects to see faster-than-average growth following an economic downturn.

In a recent presentation, Robert Lucas of the University of Chicago included a couple of graphs that illustrate this phenomenon...the...

The Austrian economist H.L. Mencken long urged libertarians against retreating when the State grows large. Instead, he advocated on behalf of engaging the system for improvement and liberty.

Public Choice economics applies economics to political science, attempting to demonstrate that the relationships of individuals and governments fall under certain assumptions of behavior, regardless of the public or private sector. Nobel Laureate James Buchanan's work in public choice is vital to the Austrian school's understanding of economics and natural law.

"Economic growth is an enemy of all central planners for the simple reason that growth jumps the guardrails of The Plan; it changes the aesthetically appealing flat line of the steady state and makes it jagged. Growth creates new products, destroys old ones, and allows people to behave in ways that render PowerPoint projections dismayingly obsolete. Worse, it takes power from the planners."

"John Maynard Keynes is back. The British economist has modern intellectual champions in Paul Krugman and Robert Skidelsky. For all today’s talk of austerity, a policy of Keynesian fiscal stimulus was adopted by most governments in the immediate aftermath of the credit crisis.

In contrast policymakers seem to show a lot less interest in the economic ideas of the 'Austrian school' led by...

"International trade presently reflects the consequences of a mass lapse of memory. During the dark days of the Great Depression the world learned the painful lesson that rampant economic nationalism leads to a breakdown in world trade. The 'isolationist economics' of the 1930s did much to prolong and deepen the agony of depression."

In this piece, Russ Roberts calls to remembrance the following Hayek quotation: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." Roberts draws an analogy between this statement and a move by Obama's pay czar.

"A few weeks ago, a journalist devoted a substantial part of a profile of yours truly to my failure to pay due attention to the 'Austrian theory"of the business cycle—a theory that I regard as being about as worthy of serious study as the phlogiston theory of fire. Oh well. But the incident set me thinking—not so much about that particular theory as about the general worldview behind it. Call...

"Throughout much of the 20th century, communist and socialist parties around the world continued to see government dominance of these industries as a key goal. The commanding heights of the economy became crucial battlegrounds in the struggle between advocates of central planning and defenders of market economics.

In America today, few people champion government control of the...

"Markets are often rightly characterized as extraordinary problem solvers. Under the right rules of the game (including private property, free exchange, and the rule of law) people following their own self-interest can coordinate their plans with one another more or less successfully, generating an overall order without being aware, or needing to be aware, of how it all gets done. That’s why...

"Since the start of the financial crisis and recession, there has been a renewed interest in the ideas of Austrian economics by scholars, public intellectuals, and even the media. For the first time in a long time, the analytical framework of Austrian economics is being taken note of, if not taken seriously, by a variety of opinion makers. This is, of course, a good development.

...

"In its day the progressive ideal was a revolutionary and even a noble one. A bureaucratic and professional elite would mediate social conflict between rich and poor, improving the lives of the poor while engineering the best possible administrative solutions to pressing social problems. Keynesian macroeconomic management would ensure lasting prosperity; progressive taxation would spread the...

"Libertarians don’t want the regulations that liberals do and saying that ‘markets’ help the poor doesn’t help us resolve this issue. Fair enough. So why might libertarians, and bleeding heart ones at that, argue that markets should be free of government regulations?

The short answer, which I will assert here and defend below, is that whatever the intent behind government regulation...

"A new poll of 20 countries from around the world finds a striking global consensus that the free market economic system is best, but that governments should also do more to regulate large companies. In all but one country polled, a majority or plurality agreed with the statement that 'the free enterprise system and free market economy is the best system on which to base the future of the...

"While there is consensus in support of the vitality of free markets, there are also somewhat ominous signs of concern that the system may not be working as it should. In nearly every country, large majorities agreed that 'Large companies have too much influence over our national government.'"

"Steven Kull, director of PIPA, comments: 'In one sense we are indeed facing what has been called ‘the end of history,’ in that there is now an extraordinary level of consensus about the best economic system. But this is not the victory of one side of the dialectic. While there is overwhelming support for free markets, there is also near-unanimous rejection of unbridled capitalism, with people...

As the graph demonstrates, the United States' transition away from gold highly correlates with the explosion in U.S. debt.

"Two hundred years ago, economists were stumped by an apparent paradox:

The paradox of value addresses why absolute necessities such as water are valued (priced) so cheaply, while frivolities like diamonds are highly valued and command outrageous prices. Questions about this paradox were used to stump Ph.D. candidates in economics for generations. It arises from difficulties in...

"Faith in the free market is at a low in the world's biggest free-market economy. In 2010, 59% of Americans asked by GlobeScan, a polling firm, agreed 'strongly' or 'somewhat' that the free market was the best system for the world's future. This has fallen sharply from 80% when the question was first asked in 2002. And among poorer Americans under $20,000, faith in capitalism fell from 76% to...

"The basic contention, reduced to its core, is that the evidence is consistent with the view that self-interested political activists -unionists, academics, bureaucrats, politicians, and a minority of big businessmen -played major roles in fostering a major expansion in the labor representation industry, an event essentially in their financial and nonfinancial interests. Some proponents...

This comprehensive, text-book styled work by the director of the Adam Smith Institute offers the important basics of the Austrian school: its unique and subjective outlook on economics, the fallibility of economists, the importance of price value, competition and entrepreneurship, the time component, the business cycle, and the downfall of socialism.

"Carl Menger has the twin distinctions of being the founder of Austrian economics and a cofounder of the marginal utility revolution. Menger worked separately from William Jevons and Leon Walras and reached similar conclusions by a different method. Unlike Jevons, Menger did not believe that goods provide 'utils,' or units of utility. Rather, he wrote, goods are valuable because they serve...

"Eugen von Böhm-Bawerk was one of the leading members of the Austrian school of economics—an approach to economic thought founded by Carl Menger and augmented by Knut Wicksell, Ludwig von Mises, Friedrich A. Hayek, and Sir John Hicks. Böhm-Bawerk’s work became so well known that before World War I, his Marxist contemporaries regarded the Austrians as their typical bourgeois, intellectual...

"If any twentieth-century economist was a Renaissance man, it was Friedrich Hayek. He made fundamental contributions in political theory, psychology, and economics. In a field in which the relevance of ideas often is eclipsed by expansions on an initial theory, many of his contributions are so remarkable that people still read them more than fifty years after they were written. Many graduate...

"At a recent meeting of the Carl Menger Society (a group devoted to the understanding of the ‘Austrian School’ of economics), the words of F.A. Hayek were being discussed. As usual, the Alternative Bookshop had brought along a wide selection of the works of Hayek and other members of the school. But as the many people present who had no background in economics or political science looked over...

Ebeling, president of the Foundation for Economic Education, gives a brief introduction to the fundamental history and beliefs behind Keynesian economics. He then presents Henry Hazlitt's critiques of Keynes' ideas on economics, namely:

1) Keynes refused to recognize that the high unemployment of the 1920s (Great Britain) and the 1930s (United States) was caused by government...

"The British economist John Hicks is known for four contributions. The first is his introduction of the idea of the elasticity of substitution. While the concept is difficult to explain in a few words, Hicks used it to show, contrary to the marxist allegations, that labor-saving technical progress—the kind we generally have—does not necessarily reduce labor’s share of national income."

"Separately but almost simultaneously with William Stanley Jevons and Carl Menger, French economist Leon Walras developed the idea of marginal utility and is thus considered one of the founders of the 'marginal revolution.' But Walras’s biggest contribution was in what is now called general equilibrium theory. Before Walras, economists had made little attempt to show how a whole economy with...

"Ludwig von Mises is well-known for his uncompromising defense of the gold standard during a period when that standard was being denounced by most other prominent economists. Mises’ reasons for preferring gold over a managed fiat money are not so widely under- stood. Some self-styled 'Misesians' defend the gold standard (or an extreme '100 percent' gold standard) on ideological and moral ('...

Famously, Mises attempted to dismantle the "socialist calculation debate" of leading contemporary economists, arguing that socialism could never be successful because it discounts the role of prices as a guiding market force. Machaj's article explains Mises' insight and reiterates that socialism is unworkable because it does away with the basics of property rights.

"Considering the role of money in happiness forces us to confront the nature of happiness itself, a huge subject to which we could hardly do justice in a brief essay. In its essence, however, happiness is a function of success. It results from achieving values. We have seen that money facilitates value-achievement in crucial respects. Making money (in the literal sense of creating wealth) is...

"I shall argue that there are ways of answering these interconnected objections to Misesian praxeology that not only vindicate praxeology—and liberate it from Mises’s sometimes misleading terminology (which I think sometimes misled even Mises himself)—but also show it to be far more congenial to Rand’s philosophy than she suspected."

"In this report, five ex-regulators discuss their experiences and reflect on the successes and failures of the regulatory framework that followed the privatizations of the 1980s and 1990s. Regulation expert Tim Ambler concludes by discussing the future of regulation, and outlining the different paths that may be taken to reform the sector."

"The Austrian theory of the business cycle has many critics. Some believe that this part of the Austrian contribution is so misdirected as to constitute an 'embarrassing excrescence' [Yeager, 1986, p. 378]; others simply doubt that there can be a single theory that provides a general account of cyclical activity [Leijonhufvud, 1984 and 1986; see also Sirkin, 1977 and Lachmann, 1978]; and still...

"Peter G. Klein has devoted his entire career to understanding the entrepreneur and the firm, bringing a distinctive Austrian approach to the problem while drawing from what all schools of thought have to contribute. ...

This book contains the fruit of Dr. Klein’s labors. And while the majority of the book was taken from articles appearing in academic journals, this book should not only...

"This book, as its title indicates, presents an overview of basic Austrian theory. Its focus is on the free market or capitalist economy. The seminal works of the Austrian economists surely cannot be neglected for a deeper understanding of the topics herein discussed. These original works must be consulted, especially in order to obtain a thorough appreciation of the serious implications of...

"It is my goal to reconstruct some basic truths regarding the process of economic development and the role played in it by employment, money, and interest. These truths neither originated with the Austrian school of economics nor are an integral part of only this tradition of economic thinking. In fact, most of them were part and parcel of what is now called classical economics, and it was the...

"With Wall Street still reeling from the mortgage meltdown, the Federal Reserve now seemingly committed to rescuing big investment banks 'too complex to fail' and the U.S. Treasury proposing a top-to-bottom reorganization of financial regulation, pieties about the virtues of unfettered markets now seem hollow. Tighter oversight of financial markets reversing a trend that began in the 1970s...

"For many years, I have been critical of the Austrian theory of depressions and this led Walter Block to ask me to put my criticisms in print. Since in oral discussions, I am frequently accused of misrepresenting the theory, I asked him to give me a canonical version and he gave me the Rothbard pamphlet, 'Economic Depressions: Causes and Cures.'

The pamphlet begins by presenting a...

This introductory lecture series was given by Professor Joseph Salerno of Pace University at an Austrian Economic Analysis seminar put on by the Mises Institute.

"Kirzner discusses the differences between Austrian economics and neo-classical economics, his experiences as a student of Ludwig von Mises, and his careeer as a professor of economics at New York University."

"The editors of 'Human Action, The Scholars Edition,' discuss the book of the century. Written during the long, dark night of socialism and central planning, Human Action was a beacon of light pointing the way to a revival of liberty. These eight talks consider Ludwig von Mises' magnum opus, its restoration by the Mises Institute to its magnificent original state, on its fiftieth anniversary,...

"Pete Boettke of George Mason University talks about the role of government and voluntary efforts in relieving suffering during and after a crisis such as Katrina. Drawing on field research he is directing into the aftermath of Hurricane Katrina, Boettke highlights the role of what he calls 'civil society'--the informal, voluntary associations we make as individuals with each other to create...

"Peter Boettke, of George Mason University, talks with EconTalk host Russ Roberts about the Austrian perspective on business cycles, monetary policy and the current state of the economy."

"Bryan Caplan of George Mason University and blogger at EconLog talks to EconTalk host Russ Roberts about two books: Eugene Richter's Pictures of the Socialistic Future and F. A. Hayek's The Road to Serfdom. Both books warn against the dangers of socialism. Pictures of a Socialistic Future, published in 1891 is a dystopian novel imagining what life would be like after a socialist revolution....

"Arnold Kling of EconLog talks with EconTalk host Russ Roberts about a new paradigm for thinking about macroeconomics and the labor market. Kling calls it PSST--patterns of sustainable specialization and trade. Kling rejects the Keynesian approach that emphasizes shortfalls in aggregate demand arguing that the aggregate demand approach masks the underlying complexity of the recalculations that...

"John Papola of Emergent Order talks with EconTalk host Russ Roberts about their collaboration creating rap videos based on the ideas of John Maynard Keynes and F. A. Hayek. Their first was 'Fear the Boom and Bust' which was released January 25, 2010. This past week they released 'Fight of the Century.' The latest video discusses the overarching differences between the philosophies of Keynes...

"In this lecture Paul Cwik, Associate Professor of Economics at Mount Olive College, discusses the Austrian Business Cycle Theory. Is the boom and bust cycle inherent in capitalism? Austrian economics explains how recessions are a result of government intervention in the economy, not an out-of-control free market."

"Economic Freedom and the Quality of Life is a short, informative video centered on the ideas of economic freedom and the societal benefits it produces. The video helps explain what economic freedom is and why it's key to improving society."

"'Fight of the Century' is the new economics hip-hop music video by John Papola and Russ Roberts at http://EconStories.tv."

"Roger Garrison spoke to students attending Advanced Austrian Economics about macroeconomics and differing approaches of John Maynard Keynes and F.A. Hayek."

"Thomas Jefferson and Andrew Jackson understood 'The Monster'. But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed...

"Lawrence Reed has been the President of the Foundation for Economic Education since 2008. He presided over the Mackinac Center for Public Policy for its first twenty years and spent decades traveling to over 70 countries spreading the message of liberty.

In this episode of Reason.tv he's interviewed about how he first came to his politics in 1968 because of Czechoslovakia's 'Prague...

Listen to this audio version of the famous "Austrian Theory of the Trade Cycle".

In this engaging talk given at the 2010 Mises University, Hülsmann discusses Mises' family background, education, stages of professional live and some of his major works.

"When the IEA first published A Tiger by the Tail in 1972 it made a significant impact. At a time when events were vindicating Hayek's analysis, it reminded economists and policymakers that he had been consistently warning against Keynesianism for more than 40 years. He was awarded the Nobel Prize in Economics just two years later in 1974.

In the context of the present downturn and the...

"This book, as its title indicates, presents an overview of basic Austrian theory. Its focus is on the free market or capitalist economy. The seminal works of the Austrian economists surely cannot be neglected for a deeper understanding of the topics herein discussed. These original works must be consulted, especially in order to obtain a thorough appreciation of the serious implications of...

"Can we control the boom? This is really a complex of many questions. In an attempt to see the implications of our problem more clearly I found it necessary to ask first these three questions:

1. Do we know what a boom is and can we clearly identify a given situation as a boom?

2. If we know what a boom is and if we know how to identify it, do we know how it might be controlled...

"A reprint of Lachmann’s 1956 classic of Austrian capital theory in which he draws upon the work of Carl Menger, Frank Knight and Friedrich Hayek. In this book Lachmann shows how firms invest to position capital goods with one another, thus creating the complex capital structure. He shows how capital formation and adjustment is a continuous transformation which is immensely complex in its...

In this work, "Rothbard has collected Fetter’s journal articles and book reviews from the period 1897 to 1937 which cover the general topics of capital, interest, and rent."

"Joseph Alois Schumpeter (1883 - 1950) was an Austrian-American economist and political scientist. He popularized the term 'creative destruction' in economics. Schumpeter's most popular book in English is probably Capitalism, Socialism and Democracy. This book opens with a treatment of Karl Marx. While he is sympathetic to Marx's theory that capitalism will collapse and will be replaced by...

"There are many socialists who have never come to grips in any way with the problems of economics, and who have made no attempt at all to form for themselves any clear conception of the conditions which determine the character of human society. There are others, who have probed deeply into the economic history of the past and present, and striven, on this basis, to construct a theory of...

"Frédéric Bastiat has said that the Harmonies is a counterpart to Economic Sophisms, and, while the latter pulls down, the Harmonies builds up. Charles Gide and Charles Rist in a standard treatise, A History of Economic Doctrines, have referred to 'the beautiful unity of conception of the Harmonies,' and added, 'we are by no means certain that the...

"A definitive defense of the methodological foundations of Austrian economics. Hoppe sets the praxeological view (economics as a purely deductive science) against positivism, while taking the critics of the Austrian approach head on. Hans-Hermann Hoppe rests his argument on the Kantian idea of the 'synthetic apriori' proposition, thereby expanding an aim of Mises's in the methodology section...

"The purpose of this book is to establish the logical legitimacy of the science that has for its object the universally valid laws of human action, i.e., laws that claim validity without respect to the place, time, race, nationality, or class of the actor. The aim of these investigations is not to draw up the program of a new science, but to show what the science with which we are already...

"Faustino Ballvé was a remarkable thinker and economist, educated in Spain and England and teaching and practicing law in Mexico City. He was here when Ludwig von Mises came to speak on a lecture tour. The talks that Ballvé heard sparked a new intellectual energy in him. He carried on a long correspondence with Mises himself, checking his education from graduate school against Mises's views....

"In For a New Liberty: The Libertarian Manifesto, Rothbard proposes a once-and-for-all escape from the two major political parties, the ideologies they embrace, and their central plans for using state power against people. Libertarianism is Rothbard's radical alternative that says state power is unworkable and immoral and ought to be curbed and finally overthrown." - ...

This famous allegory, written by the founder of the Foundation for Economic Education in 1958, has long been regarded as a simple and inspiring illustration on behalf of the free-market. The 50th anniversary edition also includes an introduction by the current FEE president and an afterword by Nobel laureate Milton Friedman.

"Here is the book that gave the Austrian School its name.

The famed Methodenstreit of the late 19th century was the battle of method. It pitted the emerging Austrian School against the German Historical School over a critically important question: what is the proper way to do social science? Here Carl Menger, the founder of the School, vindicates the importance of theory, and lays the...

"The program of liberalism, therefore, if condensed into a single word, would have to read: property, that is, private ownership of the means of production... All the other demands of liberalism result from his fundamental demand."

As Mises outlines in this speech, many reject socialism and capitalism alike, advocating for a third way that avoids the disadvantages of either socialism or capitalism. This is the system of interventionism. The interventionist believes himself to be a mediator between the class of laborers on one side and the class of entrepreneurs on the other. Both parties, as the interventionist sees it,...

"Jevons’s formative 1875 classic work came into print at the height of interest in gold, silver, and international monetary standards. Refreshingly written, widely quoted, and authoritatively researched, the book begins with the origins of money and works its way through to international banking and credit. Of particular interest are the clear discussions of Gresham’s Law (Ch. VIII),...

"That the theory of value needs reforming from the very foundation no one will, I think, deny. The imperfection of the prevailing views is confessed even by their own adherents, But while the great majority of economists are still at a loss where to turn, a new theory has come to the front. At first unnoticed, and then for long but little thought of, worked out by men who, for the most part,...

"Initially sponsored by the University of Chicago Chapter of the Intercollegiate Society of Individualists, the New Individualist Review was more than the usual 'campus magazine.' It declared itself 'founded in a commitment to human liberty.' Between 1961 and 1968, seventeen issues were published which attracted a national audience of readers. Its contributors spanned the libertarian-...

"While it is certainly clear that the stimulus bill failed to create a robust economy, I will not attempt to describe here any empirical simulations of the bill's impact (or lack thereof) on the economy. For better or worse, the ARRA was enacted because President Obama and Democratic majorities in the House and Senate believed that a large fiscal stimulus could...

"These seven works taken together represent the first integration and systematic elaboration of the Austrian theories of money, capital, business cycles, and comparative monetary institutions, which constitute the essential core of Austrian macroeconomics."

"Economic conditions are constantly changing, and each generation looks at its own problems in its own way. In England, as well as on the Continent and in America, Economic studies are being more vigorously pursued now than ever before; but all this activity has only shown the more clearly that Economic science is, and must be, one of slow and continuous growth. Some of the best work of the...

Essay embedded below.

About this volume of Hayek's collected works:

In 1931, when the young F. A. Hayek challenged the economic theories of John Maynard Keynes, sixteen years his senior, and one of the world's leading economists, he sparked a spirited debate that would influence economic policy in democratic countries for decades....

In Social Economics, von Wieser puts the alternative-cost doctrine and the theory of imputation into practical application. The work is considered the first overall treatise of Austrian thought.

Margaret Thatcher, then Prime Minister of Great Britain, delivers an address on a new dawn of free-markets and the failure of socialism.

"The substitution of laissez-faire capitalism for the precapitalistic methods of economic management has multiplied population figures and raised in an unprecedented way the average standard of living. A nation is the more prosperous today the less it has tried to put obstacles in the way of the spirit of free enterprise and private initiative. The people of the United States are more...

Here is a compilation of essays by Austrian school heavyweights Mises, Haberier, Rothbard, and Hayek. This edition offers an introduction and summary by Roger W. Garrison.

"The four essays in this volume, each written by a major figure in the Austrian school of economics, set out and apply a distinctive theory of the business cycle. The span of years (1932-1970) over which they...

"The purpose of this work is to allow the reader who is interested in some difficult economic topics to grasp them and the free-market viewpoint with very little effort. Having experienced the frustration of attempting to counter some of the statist viewpoints common in economic texts, news stories, and other works and in discussions without such a reference guide, I decided to produce just...

"Thinking like an economist has been a point of pride since Adam Smith. What often seems to be an endless muddle of political and social perspectives, pseudo-scientific analysis, journalistic advocacies, and financial matters from daily household concerns to the stock market, is suddenly illuminated once one discovers the economic point of view. Kirzner’s The Economic Point of View is a...

"The function of the entrepreneur cannot be separated from the direction of the employment of factors of production for the accomplishment of definite tasks. The entrepreneur controls the factors of production; it is this control that brings him either entrepreneurial profit or loss."

"Hayek gives the main arguments for the free-market case and presents his manifesto on the 'errors of socialism.' Hayek argues that socialism has, from its origins, been mistaken on factual, and even on logical, grounds and that its repeated failures in the many different practical applications of socialist ideas that this century has witnessed were the direct outcome of these errors. He...

"This is a collection of papers given at a conference on Austrian economics in June 1974. They cover the uniqueness of the Austrian tradition, papers on praxeology and method, the history of Austrian school, capital theory, theory of money, inflation, and the market process. The papers are by Edwin G. Dolan, Murray Rothbard, Israel Kirzner, Ludwig Lachmann, Gerald O’Driscoll, and Sudha Shenoy...

"In one part of the present work we shall take up the theory of Capital as a Tool of Production, and in another the theory of Interest. But we shall first devote a separate book to the attempt to obtain some insight into what Capital itself is, in conception and nature."

"Frank Fetter's 1904 treatise, Principles of Economics, virtually impossible to find prior to this web edition, constructed a general theory of economics in the Austrian tradition that went unsurpassed until Ludwig von Mises's treatise of 1940, Nationaloekonomie. Yet Fetter, an American Austrian long before the interwar migration from Austria, has not received due recognition for his many...

"In The Road to Serfdom F. A. Hayek set out the danger posed to freedom by attempts to apply the principles of wartime economic and social planning to the problems of peacetime. Hayek argued that the rise of Nazism was not due to any character failure on the part of the German people, but was a consequence of the socialist ideas that had gained common currency in Germany in the decades...

"W.H. Hutt’s Theory of Idle Resources was first published in 1939, surely one of the earliest responses to Keynes’s General Theory.

Hutt goes for the heart of Keynes’s prescription for recovery, which was to get idle resources moving, whether that is money, capital, or labor. If something isn’t being employed right now, it is being wasted.

Hutt responded at length that there is...

Jevon's 1871 work is considered the "final" exposition of the marginal theory of value, along with similar discoveries of Karl Menger and Lèon Walras. The "marginal revolution", as the progress was known, opened up a new era in the history of economic thought.

"Written toward the end of Mises’s life, his last monograph, The Ultimate Foundation of Economic Science, returned to economics as a science based on human action. Mises believed that, since the publication of Human Action, economists and scientists alike had misinterpreted the idea of economics as a science by deeming it epistemological positivism—that they believed that the...

"This eleven-volume set of The Works and Correspondence of David Ricardo contains all of Ricardo’s published and unpublished writings, and provides great insight into the early era of political economics by chronicling Ricardo’s significant contributions to modern economics. The edition has been widely acclaimed as the best example, prior to the Glasgow edition of Adam Smith’s...

"[A] collection of essays by leading classical liberals and supporters of the free market from around the world who joined together to celebrate Mises’ accomplishments on behalf of liberty." Volume 2 is available here.

This is the most recent translation of Böhm-Bawerk's 1892 essay on why it is cost, not labor, that determines value.

"This collection of essays from one of the major Austrian economists working in the world today brings together in one place some of his key writings on a variety of economic issues."

"The core of this book is a systematic treatment of the historic transformation of the West from monarchy to democracy. Revisionist in nature, it reaches the conclusion that monarchy is a lesser evil than democracy, but outlines deficiencies in both. Its methodology is axiomatic-deductive, allowing the writer to derive economic and sociological theorems, and then...

Sowell deconstructs a number of common economic fallacies in regards to housing, race, and income. His approach is simple, and he encourages readers to scrutinize economic choices with an eye on long-term effects rather than short-term talking points.

Callahan outlines the thinking of the Austrian School in easy terms and interesting prose. The beginning economic student will appreciate Callahan's insights, particularly his discussion of what praxeological economics means to the Austrians.

"In this collection of writings, Nobel laureate Friedrich A. Hayek discusses topics from moral philosophy and the methods of the social sciences to economic theory as different aspects of the same central issue: free markets versus socialist planned economies. First published in the 1930s and 40s, these essays continue to illuminate the problems faced by developing...

"Mad about Trade is the much-needed antidote to a rising tide of protectionist sentiment in the United States. The book explains the benefits of free trade and globalization for middle-class, Main Street Americans exposed to a barrage of negative claims from politicians and commentators such as Lou Dobbs. It offers a spirited defense of free trade and globalization that engages the populists...

"Though Austrian economics has focused almost exclusively on microeconomic concerns such as price coordination and entrepreneurship, Horwitz looks at three distinct macroeconomic issues that have been pursued by Austrian economists in the post-revival years. They are the extensions of the Mises-Hayek theory of the trade cycle, the idea of free banking or a completely market-driven monetary...

"The principal findings of experimental economics are that impersonal exchange in markets converges in repeated interaction to the equilibrium states implied by economic theory, under information conditions far weaker than specified in the theory. In personal, social, and economic exchange, as studied in two-person games, cooperation exceeds the prediction of traditional game theory. This book...

"The major social problems of the United States—deteriorating education, lawlessness and crime, homelessness, the collapse of family values, the crisis in medical care—have been produced by well-intended actions of government. That is easy to document. The difficult task is understanding why government is the problem. The power of special interests arising from the concentrated benefits of...

"Bleeding Heart Libertarians is a blog about free markets and social justice. All of us who blog at this site are, broadly speaking, libertarians. In particular, we are libertarians who believe that addressing the needs of the economically vulnerable by remedying injustice, engaging in benevolence, fostering mutual aid, and encouraging the flourishing of free markets is both practically and...

Many of the guest faculty at Foundation for Economic Education seminars post on this blog, such as Peter Boettke, Steven Horwitz, and Peter Leeson. Their objective is to relieve confusions regarding Austrian economic thought that can arise in economic discourse. They "demonstrate the continuing relevance of this tradition of economics and political economy for academic and public policy...

"The Foundation for Economic Education (FEE), one of the oldest free-market organizations in the United States, was founded in 1946 by Leonard E. Read to study and advance the freedom philosophy. FEE’s mission is to offer the most consistent case for the “first principles” of freedom: the sanctity of private property, individual liberty, the rule of law, the free market, and the moral...

This blog features Michael Giberson, a researcher at the Center for Energy Commerce, and Lynne Kiesling, a Distinguished Lecturer in the Department of Economics at Northwestern University. They offer "Commentary on Economics, Information and Human Action."

"Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals. The Foundation develops, supervises, and finances its own educational activities to foster thought and encourage discourse on enduring issues pertaining to liberty."

"The Margaret Thatcher Foundation was formed in 1991 to advance the cause of political and economic freedom. The Foundation has five broad goals: 1) To promote the widest possible acceptance of democracy, market principles, the rule of law, and strong defence 2) To encourage strong transatlantic links between Britain, Europe, and North America 3) To assist and encourage the peoples of the...