Abstract
Since its founding father Carl Menger published Principle of Economics in 1871, the Austrian school of economics focuses their analysis on areas such as exchange and market process, the structure of production, entrepreneurship, business cycle, monetary theories, economic calculation and central planning 1 The Austrian school of economics does not discuss economics of innovation, though there is a theory of entrepreneurial discovery.
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Notes
- 1.
The Austrian school of economics does not discuss economics of innovation, though there is a theory of entrepreneurial discovery.
- 2.
The term economic development or economic progress is not indexed in Von Mises( Human Action (1949/1963).
- 3.
Menger (1871/1994: 56–67) classifies economic goods into two types, goods of lower order (consumption goods) and goods of higher order (means of production). In production, goods of higher order are to be combined together to produce goods of lower order.
- 4.
In Von Mises’ view (1949/1963), ‘consumer sovereignty’ individuals who purchase goods and services in a free market ‘are at the helm and steer the ship’. ‘Te consumers determine ultimately not only the prices of the consumers’ goods, but no less the prices of all factors of production’. Simply put, the choices of consumers will ultimately determine the choices of producers (Anderson 2001). See also Gunning (2009).
- 5.
Citations from Von Bohm-Bawerk(s works are based on the version posted at ‘Library of Economics and Liberty’ website, http://www.econlib.org/library/BohmBawerk/bbPTC.html.
- 6.
Moss (1976: 56–57) summarizes the debate as follows: ‘There is some disagreement in the literature on the degree to which Von Bohm-Bawerk in fact allowed productivity considerations to enter his theory. The issue goes back at least to Frank A. Fetter(s remark in 1902 that it “has been a surprise to many students of Von Bohm-Bawerk to find that he has presented a theory, the most prominent feature of which is the technical productiveness of roundabout processes. His criticism of the productivity theories of interest has been of such a nature as to lead to the belief that he utterly rejected them … [But] it appears from Bohm-Bawerk(s later statement that he does not object to the productivity theory as a partial, but as an exclusive, explanation of interest”. Much later Schumpeter insisted that productivity plays only a subsidiary role in what is in fact wholly a time-preference theory. It is of some interest to note that when Bohm-Bawerk considered the alternative roles for productivity in a time-conscious theory, he came out squarely for an interpretation that placed productivity and “impatience” on the same level. Bohm-Bawerk made it very clear that he was not willing to identify his position with that of Fetter, who espoused a time-preference theory of interest without any mention of productivity considerations. Bohm-Bawerk remarked that “Fetter himself espouses a [theory which] places him on the outer-most wing of the purely ‘psychological’ interest theorists – ‘psychological’ as opposed to ‘technical’. He moves into a position far more extreme than the one I occupy …’”.
- 7.
In this message, Boettke also refers to F.A. Hayek.
- 8.
Kirzner (1979: 162) refers Menger(s argument that ‘men value goods according to the value of the satisfactions that depends on possession of those goods’ to as Menger(s law.
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Yu, FL.T. (2011). Economic development in Austrian economics. In: New perspectives on economic development. Wageningen Academic Publishers, Wageningen. https://doi.org/10.3920/978-90-8686-716-5_1
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