Friedrich von Wieser
Encyclopedia
Friedrich Freiherr von Wieser (July 10, 1851–July 22, 1926) was an early member of the Austrian School
of economics. Born in Vienna
, the son of Privy Councillor Leopold von Wieser, a high official in the war ministry he first trained in sociology and law. In 1872, the year he took his degree, he encountered Austrian-school founder Carl Menger
's Grundsätze
and switched his interest to economic theory. Wieser held posts at the universities of Vienna and Prague until succeeding Menger in Vienna in 1903, where, with brother-in-law Eugen von Böhm-Bawerk
, he shaped the next generation of Austrian economists including Ludwig von Mises
, Friedrich Hayek
and Joseph Schumpeter
in the late 1890s and early 1900s. He became Austrian finance minister in 1917.
Wieser is renowned for two main works, Natural Value, which carefully details the alternative-cost
doctrine and the theory of imputation
, and his Social Economics (1914), an ambitious attempt to apply it to the real world. His explanation of marginal utility
theory was decisive, at least terminologically: It was his term "Grenznutzen" that developed into the standard term, "marginal utility," not William Stanley Jevons
's "final degree of utility" or Menger's "value." His use of the modifier "natural" indicates that he regarded value
as a "natural category" that would pertain to any society, no matter what institutions of property had been established.
The economic calculation debate started with his notion of the paramount importance of accurate calculation to economic efficiency. Prices to him represented, above all, information about market conditions, and are thus necessary for any sort of economic activity. A socialist economy, therefore, would require a price system in order to operate.
He also stressed the importance of the entrepreneur
to economic change, which he saw as being brought about by “the heroic intervention of individual men who appear as leaders toward new economic shores.” This idea of leadership was later taken up by Joseph Schumpeter
in his treatment of economic innovation.
Unlike most other Austrian School economists, he rejected classical liberalism
, writing that “freedom has to be superseded by a system of order.” This vision—and his general solution to the role of the individual in history—is best expressed in his final book, The Law of Power, published in his last year of life, a sociological examination of political order.
Schumpeter stressed Wieser's originality: "There is hardly another author who owes as little to other authors as Wieser, fundamentally to none except Menger and to him only a suggestion -- with the result that for a long time many fellow economists did not know what to do with Wieser's work. Of his edifice, everything is his intellectual property, even where what he says has already been said before him."
, history
, and sociology
. He studied law at the University of Vienna
beginning in 1868. His lifelong passion for Political Economics was first ignited when he read Herbert Spencer
's
Einleitung in das Studium der Soziologie (Introduction to the Study of Sociology).
In 1875 Wieser, after ten years of public service as a government employee, was awarded a scholarship to the University of Heidelberg, Germany
, in order to study Political Economics with Eugen von Böhm-Bawerk
, a friend from his youth who later became his brother-in-law. Both men were disciples of Carl Menger
, Wieser's senior by 11 years. Although neither Wieser nor Böhm-Bawerk studied under Menger directly, they were greatly influenced by reading
Menger's Grundsätze der Volkswirtschaftslehre (Principles of Economics
) (1871), which was the work that had initially inspired the two men to study Political Economics. The three are considered the first generation of the Austrian School
of Economics.
After a successful postdoctoral habilitation
in 1884, Über den Ursprung und die Hauptgesetze des wirthschaftlichen Werthes (On the Origin and the Main Laws of the Value of the Factors), a prelude to his value theory, Dr. Wieser was named that same year as an associate professor at Charles University in Prague
, where he stayed until 1903 when he succeeded Carl Menger at the University of Vienna.
In 1889 he was named ordentlicher Professor ("ordinary professor") at the University of Saint Charles. That same year, he also published his Der natürliche Wert (Natural Value), with which he initiated the debate on the value of factors of production
, and from which are derived two of his major contributions: his Value Theory and the related imputation theory.
Motivated by introducing the innovations of the Austrian School, in 1891 he published Die österreichische Schule und die Theorie Wert (The Austrian School and the Theory of value) and in 1892 Die Wert Theorie (The Value Theory). Later, he collaborated in other notable works, such as Die economic Wiederaufnahme Barzahlungen der in Österreich-Ungarn (Resumption of payments species in Austria-Hungary) in 1893 and Die Theorie der städtische Grundrente (Theory of urban land rents) in 1909. He also served as editor for two articles in the Palgrave Dictionary of Economics: "Die österreichische Schule der Wirtschaft" ("The Austrian School of Economics"), and "Böhm-Bawerk", both in 1884.
In 1903, Wieser was awarded a chair at his alma mater
, the University of Vienna, as a full professor, where he taught a new generation of outstanding economists, including Ludwig von Mises
, Joseph Alois Schumpeter, and his most faithful disciple, Friedrich August von Hayek. He developed a monetary theory inspired by the research of Carl Menger, and he applied himself during the following years to the problems of the quantity theory of money. In his last 25 years he dedicated himself to sociology, which he believed must go hand-in-hand with economics for the fullest understanding of human society. By combining these disciplines he was able to forge a new vision of economic policy.
In 1911, he published Das Wesen und der Hauptinhalt der theoretischen Nationalokonomie (The nature and content of theoretical economics major national), which preceded yet another major contribution:
alternative cost (or opportunity cost) theory, which was drawn from his study Theorie der gesellschaftlichen Wirtschaft (Theory of social economy), published in 1914. It was here that he first coined the term opportunity cost
.
Also attributed to him is the creation of the term marginal utility
(Grenznutzen), due largely to the influence of Léon Walras
and Vilfredo Pareto
,
both of the Lausanne School. This has led some scholars to not consider his later works as belonging to the Austrian School. Even Ludwig von Mises, his disciple, said in his autobiography, Memoirs (1978), that Wieser had misunderstood the gist of the subjectivism of the Austrian School and was actually a member of the Lausanne School. But in both he also presents a clear methodological individualism and a rejection of historicism of the German school, so at first blush it is difficult to justify his exclusion from the Austrian School.
In 1914, Eugen von Böhm-Bawerk died, thus marking the end of a life-long friendship and striking a hard blow to Wieser.
In 1917 Wieser was named a member of the Austrian House of Lords and granted the title of Baron
. He was also appointed Minister of Commerce in the Austrian Cabinet, which post he held until the end of the First World War in 1918. However, his activity was hindered by Richard Riedl, Energy Minister and clear proponent of economic interventionism
, leaving only matters of secondary importance to Wieser's jurisdiction
.
His last works were Das geschichtliche Werk der Gewalt (The History of State Power) in 1923 and, in 1926, an impressive sociological study titled Das Gesetz der Macht (The Law of Power).
Friedrich von Wieser died on July 22, 1926 in Salzburg, where he is buried. Two of his hitherto unpublished works were published posthumously: Geld (Money) in 1927, which summarizes his monetary theory,
and Gesammelte Abhandlungen (Collected Papers) in 1929. This latter book included a tribute resulting from the collaboration of renowned economists like Knut Wicksell
, but it was censored during the Second World War.
Imputation Theory
drawn from his 1889 work Der natürliche Wert (Natural Value)
and the
Alternative Cost (or Opportunity Cost) Theory
drawn from his 1914 work Theorie der gesellschaftlichen Wirtschaft
(Social Economics)
in which he coined the term opportunity cost
.
He is credited with the economic distinction between public good
s and
private good
s
subsequently used by Friedrich August von Hayek and eight of his disciples,
and with developing the concept of marginal utility
(Grenznutzen).
Wieser also stressed the importance of the entrepreneur
to economic change,
which he saw as being caused by "the heroic intervention of individual men who
appear as leaders at new economic frontiers." This idea of management was later expounded upon
by Joseph Alois Schumpeter in his treatment of economic innovation.
Value theory was revolutionary because it opened the debate on the question of economic value,
introducing an objective calculation to a subjective theory. It was one of the first mathematical
solutions to the problem of determining prices for factors of production
.
His imputation theory amended possible
errors in the theory of his teacher,
Carl Menger
, and is still used today in
Microeconomics
in consumer research to calculate
the systematic replacement of factors of production.
Another of Wieser's fundamental contributions to Economics
is the
Alternative Cost Theory
(now called the Opportunity Cost Theory), which had been ignored by Alfred Marshall
and
British economists. Based on the work of Pareto
, Wieser
created the concepts of marginal utility
and opportunity cost
, which
led economists to the study and analysis of scarcity
and the allocation of
scarce resources.
Wieser thus perfected the theory of Carl Menger by introducing a definition of cost,
the opportunity cost, compatible with the theory of marginal utility.
He also used Menger's monetary theory from which he devised
his own monetary theory
presenting a study of possible influences on monetary value
that can change the relationships between natural and monetary economics.
But the most important of his contributions is that, thanks to his familiarity with
Sociology
, he combined the Austrian theory of utility
with an evolutionary theory of institutions offering solutions to the paradox
between private property
and the maximization of utility. Wieser said that
idealized classical and neoclassical models neglect basic concepts such as the
possibility of monopolies
and the existence of
economies of scale
.
Wieser claimed that idealized, refined, and
self-contained models may [not] be useful tools for economic policy, resulting
therefore in a suboptimal solution. Also, he posited the concept of
Social Economy (gesellschaftliche Wirtschaft), which he brilliantly produced in his treatise
Theorie der Wirtschaft gesellschaftliche (Theory of Social Economy),
using the performance
of intervention
in certain cases
as a benchmark to assess policy effectiveness.
published in Vienna
in 1889, are extracted two of Wieser's three relevant theories,
his Value Theory and
the Imputation Theory,
although both had had their geneses in previous studies.
Adding to his contribution was also the theory originally known as
the Alternative Cost Theory
(now called the Opportunity Cost Theory),
which was published in 1914 ingesellschaftliche Theorie der Wirtschaft(Theory of Social Economy).
Finally, also worth mentioning is his monetary theory.
, as opposed to the theory held by his teacher Carl Menger
which states that the value factor is the value of the input when contributed to the final product.
Wieser's Value Theory was presented, along with his Imputation Theory, in
his work Der Wert Natürliche (Natural Value), published in Vienna in 1889, although his examination of the subject begins in his 1884 postdoctoral study Über den Ursprung und die Hauptgesetze wirthschaftlichen des Werther (On the origin and the principal laws of the value of factors).
Wieser asserts that natural value (natürliche Wert) is a neutral phenomenon, independent of the economic system. His idea of natural value tends to highlight how the value of property is continuously dependent on the distribution of income between different social classes, so that in the presence of a situation greatly lacking in equidistribution, goods or services provided with little social utility can be of great value, and vice versa.
The economy
deals with a social process and therefore must be based on a concept of social economics
(gesellschaftliche Wirtschaft), which implies certain institutional actions.
In the first part of his treatise Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economics),
Wieser carefully explains his view of general economic equilibrium.
Aware of the idealized assumptions of this economy,
he seeks to define with pinpoint accuracy the conditions under which resources would be allocated to ensure the highest possible utility
. Social Economics should therefore serve as the benchmark for evaluating the efficacy
of administrative intervention in the market economy.
This assertion is based on the fact that, for Wieser, natural value would exist in a perfect "communist" state, due to the absence of inequalities of wealth and error. In this case, value would result only from the available quantity and from profits. But, he states, in the real world, natural value is only one element in the formation of price
. Other factors that influence prices are the distribution of purchasing power, errors, fraud, and coercion.
His idea of natural value highlights how the economic value of property
changes depending on the distribution of income between different social classes so that, when income distribution is far from equal, goods or services provided with little social utility can be of great value, and vice versa. Therefore, Wieser explicitly states his assumptions, considering the cases in which the exchange value (price) differs from the real value (marginal utility
):
Some economists of the Austrian School
maintained that the value of the factors of production
is not the individual contribution of each factor in the final product, but rather the value of the most valuable use that can be made of the last good (the marginal utility before reaching the Pareto optimal point.) The opposing view held by the Classical School
in Adam Smith
is the labor theory of value
.
Previously, some economists, such as Carl Menger
and others of the Austrian School
, maintained that the value of factors of production is the individual contribution of each in the final product, but its value is the value of the last contributed to the final product (the marginal utility before reaching the point Pareto optimal). Thus, Wieser identified a flaw in the theory of imputation as expounded by his teacher, Carl Menger: overvaluation may occur if one is confronted with economies where profits jump (maximums and minimums in his utility function, where its second derivative equals 0). Wieser thus suggested as an alternative the simultaneous solution of a system of industrial equations.
Given that a factor is used in the production of a range of first-order goods, its value is determined by the good that is worth the least among all the goods in the range. This value is determined at the margin, the marginal utility of the last unit of the least valuable good produced by the factor. In connection with his opportunity cost, the value so derived represents an opportunity cost across all industries, and the values of the factors of production and goods are determined in the whole system. Thus, supply and demand do not develop into the determinants of value; the determinant of value is the marginal utility.
and performed a detailed study of the subject.
Opportunity cost is associated with a famous controversy from the early 20th century, where disciples of English economist
Alfred Marshall
were opposed to the continental economists of the Austrian School
, the head of which was Friedrich von Wieser, with his theory of alternative or opportunity cost. The debate focused on the following points:
The most notable feature of the concept is that opportunity cost would only make sense if the opportunity were fixed or reasonably limited. That is, if there is a conflict in performing multiple investments or actions, simultaneously or consecutively, it would not be feasible to have to choose among all the alternatives.
Thus, if a person has several options, you can calculate the opportunity cost of choosing one. But can we calculate a universal opportunity cost, which would include all the options? The prevailing opinion was that the opportunity cost could not be applied outside of cases of limited resources. This led some economists to limit the object of economics
to "exceptional" resource situations (an idea still present in all economics textbooks). Still unknown are the consequences that might follow from an economic science that has no fixed limits outside of the economic system
, in terms of availability of goods.
, in particular by his study of currency, which discussed both the historical evolution of money and the theory of its value. Wieser used the theory of marginal utility
as a basis for his monetary theory. It was initially rejected; in fact, some authors tried to prove that marginalism
necessarily failed when used as a basis for building such theories. However, his disciple, Ludwig von Mises
, studied Wieser's theory and fleshed it out, creating the complex upon which he built the German concept of Geld (money).
Wieser conducted a further study on the effects of change in a currency's value on the relationship between the natural economy and the monetary economy.
, and this resulted in his 1914 publication, Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economy), from which is derived his theory of alternative cost or opportunity. Das Gesetz der Macht (The Law of Power), published in 1926, was his latest publication, a great sociological study from which we draw the following conclusions.
Wieser tried to explain the relationships and social forces through the study of history
, and he concluded that economic forces held a prominent role in social evolution. Despite his interest in collective goals, such as economic well-being, Wieser adopted an individual
approach, explicitly rejecting collectivism
, approaching a more liberal
stance, and establishing the essential difference between social economics in general and Socialist Economics
.
Social Economy (in the original German, Gesellschaftliche Wirtschaft) treats humanity as a whole as an ideal economic subject, and contrasts it with nature, so that considerations of conflicting interests or economic justice become as irrelevant as they would to the economy of Robinson Crusoe
".
For Wieser, the individual is the root of all decisions. Decisions are made in the face of certain restrictions. Institutions are what define the restrictions on individual decisions. The reflection of these findings in political economy
is apparent in actions such as:
These conditions, under which resources would be allocated to ensure the greatest value, describe his model of an ideal economy, which he calls social economics in the first part of his treatise entitled Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economics). He made idealized assumptions using his model as the benchmark standard for evaluating the effectiveness
of administritative intervention in the market economy.
Thus Wieser's Social Economics is, in effect, a Communist
economy in which, to achieve greater productivity, scarce resources are assigned by an omnipresent, benevolent planner with direct and accurate insight sufficient to know the intensities of satisfactions and needs experienced by individual members of society, which all have exactly the same tastes and the same scales of utility and receive the same income
s. Moreover, their directions are followed without question by a completely docile workforce.
. The English edition of his 1927 book, Liberalismus, uses the term neoliberalism to translate what Mises called in German neuen Liberalismus (new liberalism). In this book, Mises uses the term to designate socialists posing as liberals (a term he later replaced with pseudoliberals), leaving Wieser, in Mises's view, under this definition for being a Fabian socialist. Also, in his later book, Socialism, he applies the neoliberal label to liberal supporters of the then new subjective theory of value, including Carl Menger
and Wieser.
When Carl Menger, Eugen von Böhm-Bawerk
, and Wieser began their careers in science, they were not focused on economic policy issues, much less in the rejection of intervention
promoted by classical liberalism
. Their common vocation was to develop an economic theory on a firm basis. To do this, following the course initiated by Carl Menger, Wieser, along with his friend and brother-in-law Eugen von Böhm-Bawerk, disapproved of the policies of interventionism that the Austrian government, as all governments of the time, had adopted, arguing that only the free market could allow more efficient
economic and social development.
Wieser believed that he could contribute to a return to liberal policies, both by explaining his economic vision in his books and articles as well as by teaching it in his role as university professor at the University of Prague
and University of Vienna
. In addition, his positions within the Austrian ministries allowed him to adopt more or less liberal economic policies. But it was his liberal vision that separated him from the British economists of his era, discarding classical and neoclassical idealized models that did not contemplate the possibility of monopolies
or the existence of economies of scale
.
Wieser, meanwhile, did not acknowledge essentialism
or any teleological
version of causality. As opposed to the historical method
of the German historicist school,
he developed a logical method
, with both its deductive
slope as well as its inductive
slope (see interpolation
and extrapolation
). Economics
has, like Mathematics
and Logic
, an a priori character rather than the empirical
character of science
.
Thus, empirical phenomena are considered continuously variable, meaning that social developments have no parameters or constants, only variables, which makes it very difficult, if not impossible, to extract historical laws or make predictions. This point is the epicenter of the methodological discussion between the Austrian School
and the German School
.
In what little Wieser wrote about methodology, he stated that economics is a kind of applied psychology
for which the procedure is introspection, claiming similarity between Economics and sociology
in that both attempt to achieve a more successful social reality of man, promoting the idea of utility
that reports on each good and each individual. Aside from abandoning essentialism, both Eugen von Böhm-Bawerk and Wieser advocated objectively considering subjective factors, setting aside ideas that believe in the existence of an objective superhuman (essentialism
) and theories of subjective elements that are incapable of objective measures (teleology
of causality).
These ideas (the rejection of the state intervention
in the economy, essentialism and the teleological view of causality), defended by the Austrian School in general, were never approved by the governors. By contrast, authors such as John Maynard Keynes
, Vladimir I. Lenin, Paul Baran
and Gunnar Myrdal
came to be greatly appreciated by the academy and by centers of power for providing theoretical justification for economic intervention
when searching for measures to prop up plutocratic
regimes.
Throughout the first half of the 20th century, Austrian economists were marginalized and found it difficult to work. Specifically, while Wieser served as trade minister during the World War
, his effectiveness was neutralized by Richard Riedl, minister of energy and a clear proponent of economic interventionism, with only minor matters being left to Wieser's jurisdiction.
In fact, after his death a book was dedicated as a tribute to him, in which prestigious economists collaborated, such as
Knut Wicksell
, who was persecuted and killed during the Nazi Regime
. The work was censored and discredited in countries such as United Kingdom
Only in the late twentieth century, when economic crises resulting from Marxist
and Keynesian economic structures collapsed, have his liberal economic theories
been reconsidered and accepted.
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
of economics. Born in Vienna
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
, the son of Privy Councillor Leopold von Wieser, a high official in the war ministry he first trained in sociology and law. In 1872, the year he took his degree, he encountered Austrian-school founder Carl Menger
Carl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
's Grundsätze
Principles of Economics
Principles of Economics is a book by economist Carl Menger which is credited with the founding of the Austrian School of economics...
and switched his interest to economic theory. Wieser held posts at the universities of Vienna and Prague until succeeding Menger in Vienna in 1903, where, with brother-in-law Eugen von Böhm-Bawerk
Eugen von Böhm-Bawerk
Eugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...
, he shaped the next generation of Austrian economists including Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
, Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...
and Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
in the late 1890s and early 1900s. He became Austrian finance minister in 1917.
Wieser is renowned for two main works, Natural Value, which carefully details the alternative-cost
Opportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
doctrine and the theory of imputation
Imputation (economics)
In economics, the theory of imputation, first expounded by Carl Menger, maintains that factor prices are determined by output prices.This is the opposite of the labor theory of value maintained by classical economists such as Adam Smith and David Ricardo....
, and his Social Economics (1914), an ambitious attempt to apply it to the real world. His explanation of marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
theory was decisive, at least terminologically: It was his term "Grenznutzen" that developed into the standard term, "marginal utility," not William Stanley Jevons
William Stanley Jevons
William Stanley Jevons was a British economist and logician.Irving Fisher described his book The Theory of Political Economy as beginning the mathematical method in economics. It made the case that economics as a science concerned with quantities is necessarily mathematical...
's "final degree of utility" or Menger's "value." His use of the modifier "natural" indicates that he regarded value
Theory of value (economics)
"Theory of value" is a generic term which encompasses all the theories within economics that attempt to explain the exchange value or price of goods and services...
as a "natural category" that would pertain to any society, no matter what institutions of property had been established.
The economic calculation debate started with his notion of the paramount importance of accurate calculation to economic efficiency. Prices to him represented, above all, information about market conditions, and are thus necessary for any sort of economic activity. A socialist economy, therefore, would require a price system in order to operate.
He also stressed the importance of the entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
to economic change, which he saw as being brought about by “the heroic intervention of individual men who appear as leaders toward new economic shores.” This idea of leadership was later taken up by Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
in his treatment of economic innovation.
Unlike most other Austrian School economists, he rejected classical liberalism
Classical liberalism
Classical liberalism is the philosophy committed to the ideal of limited government, constitutionalism, rule of law, due process, and liberty of individuals including freedom of religion, speech, press, assembly, and free markets....
, writing that “freedom has to be superseded by a system of order.” This vision—and his general solution to the role of the individual in history—is best expressed in his final book, The Law of Power, published in his last year of life, a sociological examination of political order.
Schumpeter stressed Wieser's originality: "There is hardly another author who owes as little to other authors as Wieser, fundamentally to none except Menger and to him only a suggestion -- with the result that for a long time many fellow economists did not know what to do with Wieser's work. Of his edifice, everything is his intellectual property, even where what he says has already been said before him."
Biography
Born in Vienna on July 10, 1851, Friedrich von Wieser spent his childhood and adolescence in the same city. He was interested since youth in lawLaw
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, history
History
History is the discovery, collection, organization, and presentation of information about past events. History can also mean the period of time after writing was invented. Scholars who write about history are called historians...
, and sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
. He studied law at the University of Vienna
University of Vienna
The University of Vienna is a public university located in Vienna, Austria. It was founded by Duke Rudolph IV in 1365 and is the oldest university in the German-speaking world...
beginning in 1868. His lifelong passion for Political Economics was first ignited when he read Herbert Spencer
Herbert Spencer
Herbert Spencer was an English philosopher, biologist, sociologist, and prominent classical liberal political theorist of the Victorian era....
's
Einleitung in das Studium der Soziologie (Introduction to the Study of Sociology).
In 1875 Wieser, after ten years of public service as a government employee, was awarded a scholarship to the University of Heidelberg, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, in order to study Political Economics with Eugen von Böhm-Bawerk
Eugen von Böhm-Bawerk
Eugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...
, a friend from his youth who later became his brother-in-law. Both men were disciples of Carl Menger
Carl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
, Wieser's senior by 11 years. Although neither Wieser nor Böhm-Bawerk studied under Menger directly, they were greatly influenced by reading
Menger's Grundsätze der Volkswirtschaftslehre (Principles of Economics
Principles of Economics
Principles of Economics is a book by economist Carl Menger which is credited with the founding of the Austrian School of economics...
) (1871), which was the work that had initially inspired the two men to study Political Economics. The three are considered the first generation of the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
of Economics.
After a successful postdoctoral habilitation
Habilitation
Habilitation is the highest academic qualification a scholar can achieve by his or her own pursuit in several European and Asian countries. Earned after obtaining a research doctorate, such as a PhD, habilitation requires the candidate to write a professorial thesis based on independent...
in 1884, Über den Ursprung und die Hauptgesetze des wirthschaftlichen Werthes (On the Origin and the Main Laws of the Value of the Factors), a prelude to his value theory, Dr. Wieser was named that same year as an associate professor at Charles University in Prague
Charles University in Prague
Charles University in Prague is the oldest and largest university in the Czech Republic. Founded in 1348, it was the first university in Central Europe and is also considered the earliest German university...
, where he stayed until 1903 when he succeeded Carl Menger at the University of Vienna.
In 1889 he was named ordentlicher Professor ("ordinary professor") at the University of Saint Charles. That same year, he also published his Der natürliche Wert (Natural Value), with which he initiated the debate on the value of factors of production
Factors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
, and from which are derived two of his major contributions: his Value Theory and the related imputation theory.
Motivated by introducing the innovations of the Austrian School, in 1891 he published Die österreichische Schule und die Theorie Wert (The Austrian School and the Theory of value) and in 1892 Die Wert Theorie (The Value Theory). Later, he collaborated in other notable works, such as Die economic Wiederaufnahme Barzahlungen der in Österreich-Ungarn (Resumption of payments species in Austria-Hungary) in 1893 and Die Theorie der städtische Grundrente (Theory of urban land rents) in 1909. He also served as editor for two articles in the Palgrave Dictionary of Economics: "Die österreichische Schule der Wirtschaft" ("The Austrian School of Economics"), and "Böhm-Bawerk", both in 1884.
In 1903, Wieser was awarded a chair at his alma mater
Alma mater
Alma mater , pronounced ), was used in ancient Rome as a title for various mother goddesses, especially Ceres or Cybele, and in Christianity for the Virgin Mary.-General term:...
, the University of Vienna, as a full professor, where he taught a new generation of outstanding economists, including Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
, Joseph Alois Schumpeter, and his most faithful disciple, Friedrich August von Hayek. He developed a monetary theory inspired by the research of Carl Menger, and he applied himself during the following years to the problems of the quantity theory of money. In his last 25 years he dedicated himself to sociology, which he believed must go hand-in-hand with economics for the fullest understanding of human society. By combining these disciplines he was able to forge a new vision of economic policy.
In 1911, he published Das Wesen und der Hauptinhalt der theoretischen Nationalokonomie (The nature and content of theoretical economics major national), which preceded yet another major contribution:
alternative cost (or opportunity cost) theory, which was drawn from his study Theorie der gesellschaftlichen Wirtschaft (Theory of social economy), published in 1914. It was here that he first coined the term opportunity cost
Opportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
.
Also attributed to him is the creation of the term marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
(Grenznutzen), due largely to the influence of Léon Walras
Léon Walras
Marie-Esprit-Léon Walras was a French mathematical economist associated with the creation of the general equilibrium theory.-Life and career:...
and Vilfredo Pareto
Vilfredo Pareto
Vilfredo Federico Damaso Pareto , born Wilfried Fritz Pareto, was an Italian engineer, sociologist, economist, political scientist and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices....
,
both of the Lausanne School. This has led some scholars to not consider his later works as belonging to the Austrian School. Even Ludwig von Mises, his disciple, said in his autobiography, Memoirs (1978), that Wieser had misunderstood the gist of the subjectivism of the Austrian School and was actually a member of the Lausanne School. But in both he also presents a clear methodological individualism and a rejection of historicism of the German school, so at first blush it is difficult to justify his exclusion from the Austrian School.
In 1914, Eugen von Böhm-Bawerk died, thus marking the end of a life-long friendship and striking a hard blow to Wieser.
In 1917 Wieser was named a member of the Austrian House of Lords and granted the title of Baron
Baron
Baron is a title of nobility. The word baron comes from Old French baron, itself from Old High German and Latin baro meaning " man, warrior"; it merged with cognate Old English beorn meaning "nobleman"...
. He was also appointed Minister of Commerce in the Austrian Cabinet, which post he held until the end of the First World War in 1918. However, his activity was hindered by Richard Riedl, Energy Minister and clear proponent of economic interventionism
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
, leaving only matters of secondary importance to Wieser's jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
.
His last works were Das geschichtliche Werk der Gewalt (The History of State Power) in 1923 and, in 1926, an impressive sociological study titled Das Gesetz der Macht (The Law of Power).
Friedrich von Wieser died on July 22, 1926 in Salzburg, where he is buried. Two of his hitherto unpublished works were published posthumously: Geld (Money) in 1927, which summarizes his monetary theory,
and Gesammelte Abhandlungen (Collected Papers) in 1929. This latter book included a tribute resulting from the collaboration of renowned economists like Knut Wicksell
Knut Wicksell
Johan Gustaf Knut Wicksell was a leading Swedish economist of the Stockholm school. His economic contributions would influence both the Keynesian and Austrian schools of economic thought....
, but it was censored during the Second World War.
Achievements
Friedrich von Wieser's most famous contributions are theImputation Theory
drawn from his 1889 work Der natürliche Wert (Natural Value)
and the
Alternative Cost (or Opportunity Cost) Theory
drawn from his 1914 work Theorie der gesellschaftlichen Wirtschaft
(Social Economics)
in which he coined the term opportunity cost
Opportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
.
He is credited with the economic distinction between public good
Public good
In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...
s and
private good
Private good
A private good is defined in economics as "an item that yields positive benefits to people” that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits; and rivalrous, i.e. consumption by one...
s
subsequently used by Friedrich August von Hayek and eight of his disciples,
and with developing the concept of marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
(Grenznutzen).
Wieser also stressed the importance of the entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
to economic change,
which he saw as being caused by "the heroic intervention of individual men who
appear as leaders at new economic frontiers." This idea of management was later expounded upon
by Joseph Alois Schumpeter in his treatment of economic innovation.
Value theory was revolutionary because it opened the debate on the question of economic value,
introducing an objective calculation to a subjective theory. It was one of the first mathematical
solutions to the problem of determining prices for factors of production
Factors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
.
His imputation theory amended possible
errors in the theory of his teacher,
Carl Menger
Carl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
, and is still used today in
Microeconomics
Microeconomics
Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
in consumer research to calculate
the systematic replacement of factors of production.
Another of Wieser's fundamental contributions to Economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
is the
Alternative Cost Theory
(now called the Opportunity Cost Theory), which had been ignored by Alfred Marshall
Alfred Marshall
Alfred Marshall was an Englishman and one of the most influential economists of his time. His book, Principles of Economics , was the dominant economic textbook in England for many years...
and
British economists. Based on the work of Pareto
Vilfredo Pareto
Vilfredo Federico Damaso Pareto , born Wilfried Fritz Pareto, was an Italian engineer, sociologist, economist, political scientist and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices....
, Wieser
created the concepts of marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
and opportunity cost
Opportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
, which
led economists to the study and analysis of scarcity
Scarcity
Scarcity is the fundamental economic problem of having humans who have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be...
and the allocation of
scarce resources.
Wieser thus perfected the theory of Carl Menger by introducing a definition of cost,
the opportunity cost, compatible with the theory of marginal utility.
He also used Menger's monetary theory from which he devised
his own monetary theory
presenting a study of possible influences on monetary value
that can change the relationships between natural and monetary economics.
But the most important of his contributions is that, thanks to his familiarity with
Sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
, he combined the Austrian theory of utility
Utility
In economics, utility is a measure of customer satisfaction, referring to the total satisfaction received by a consumer from consuming a good or service....
with an evolutionary theory of institutions offering solutions to the paradox
Paradox
Similar to Circular reasoning, A paradox is a seemingly true statement or group of statements that lead to a contradiction or a situation which seems to defy logic or intuition...
between private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
and the maximization of utility. Wieser said that
idealized classical and neoclassical models neglect basic concepts such as the
possibility of monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
and the existence of
economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
.
Wieser claimed that idealized, refined, and
self-contained models may [not] be useful tools for economic policy, resulting
therefore in a suboptimal solution. Also, he posited the concept of
Social Economy (gesellschaftliche Wirtschaft), which he brilliantly produced in his treatise
Theorie der Wirtschaft gesellschaftliche (Theory of Social Economy),
using the performance
Performance
A performance, in performing arts, generally comprises an event in which a performer or group of performers behave in a particular way for another group of people, the audience. Choral music and ballet are examples. Usually the performers participate in rehearsals beforehand. Afterwards audience...
of intervention
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
in certain cases
as a benchmark to assess policy effectiveness.
Economic Theories
From his book Der Wert Natürliche (Natural Value),published in Vienna
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
in 1889, are extracted two of Wieser's three relevant theories,
his Value Theory and
the Imputation Theory,
although both had had their geneses in previous studies.
Adding to his contribution was also the theory originally known as
the Alternative Cost Theory
(now called the Opportunity Cost Theory),
which was published in 1914 ingesellschaftliche Theorie der Wirtschaft(Theory of Social Economy).
Finally, also worth mentioning is his monetary theory.
Value Theory
Wieser's Value Theory attempts to establish a method for calculating economic value and states that the factors of production have a value due to the utility they have conferred on the final product, i.e. marginal utilityMarginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
, as opposed to the theory held by his teacher Carl Menger
Carl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
which states that the value factor is the value of the input when contributed to the final product.
Wieser's Value Theory was presented, along with his Imputation Theory, in
his work Der Wert Natürliche (Natural Value), published in Vienna in 1889, although his examination of the subject begins in his 1884 postdoctoral study Über den Ursprung und die Hauptgesetze wirthschaftlichen des Werther (On the origin and the principal laws of the value of factors).
Wieser asserts that natural value (natürliche Wert) is a neutral phenomenon, independent of the economic system. His idea of natural value tends to highlight how the value of property is continuously dependent on the distribution of income between different social classes, so that in the presence of a situation greatly lacking in equidistribution, goods or services provided with little social utility can be of great value, and vice versa.
The economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
deals with a social process and therefore must be based on a concept of social economics
(gesellschaftliche Wirtschaft), which implies certain institutional actions.
In the first part of his treatise Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economics),
Wieser carefully explains his view of general economic equilibrium.
Aware of the idealized assumptions of this economy,
he seeks to define with pinpoint accuracy the conditions under which resources would be allocated to ensure the highest possible utility
Utility
In economics, utility is a measure of customer satisfaction, referring to the total satisfaction received by a consumer from consuming a good or service....
. Social Economics should therefore serve as the benchmark for evaluating the efficacy
Efficacy
Efficacy is the capacity to produce an effect. It has different specific meanings in different fields. In medicine, it is the ability of an intervention or drug to reproduce a desired effect in expert hands and under ideal circumstances.- Healthcare :...
of administrative intervention in the market economy.
This assertion is based on the fact that, for Wieser, natural value would exist in a perfect "communist" state, due to the absence of inequalities of wealth and error. In this case, value would result only from the available quantity and from profits. But, he states, in the real world, natural value is only one element in the formation of price
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
. Other factors that influence prices are the distribution of purchasing power, errors, fraud, and coercion.
His idea of natural value highlights how the economic value of property
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
changes depending on the distribution of income between different social classes so that, when income distribution is far from equal, goods or services provided with little social utility can be of great value, and vice versa. Therefore, Wieser explicitly states his assumptions, considering the cases in which the exchange value (price) differs from the real value (marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
):
- Antimony of value: if monopoliesMonopolyA monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
arise then the individual entrepreneur will be able to increase his own utility at the expense of social utility, thus creating a state of antimonyAntimonyAntimony is a toxic chemical element with the symbol Sb and an atomic number of 51. A lustrous grey metalloid, it is found in nature mainly as the sulfide mineral stibnite...
. Friedrich argues that competitionCompetitionCompetition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
can correct this because it reduces the entrepreneurs economic power and forces prices to fall. - Disparity in the purchasing power of consumers: Leads to over-produced goods to meet the needs of persons with high ability to pay, and too few goods to meet the needs of poor people.
Some economists of the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
maintained that the value of the factors of production
Factors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
is not the individual contribution of each factor in the final product, but rather the value of the most valuable use that can be made of the last good (the marginal utility before reaching the Pareto optimal point.) The opposing view held by the Classical School
Classical liberalism
Classical liberalism is the philosophy committed to the ideal of limited government, constitutionalism, rule of law, due process, and liberty of individuals including freedom of religion, speech, press, assembly, and free markets....
in Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
is the labor theory of value
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...
.
Practical Application
- Coined the term marginal utilityMarginal utilityIn economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
and gave shape to the concept.
- Was revolutionary because it provided a new insight into the debate on the issue of economic value.
- Established assumptions concerning interventionEconomic interventionismEconomic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
, explicitly considering cases where the exchange value (pricePrice-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
) differs from the actual value (marginal utilityMarginal utilityIn economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
).
- Tried to provide a solution to the paradoxParadoxSimilar to Circular reasoning, A paradox is a seemingly true statement or group of statements that lead to a contradiction or a situation which seems to defy logic or intuition...
of private propertyPrivate propertyPrivate property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
and maximizing utility.
- Still relevant today, especially in the field of study of Consumer MicroeconomicsMicroeconomicsMicroeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
.
Imputation Theory
Wieser based his theory of imputation on the assumption that factors of production are combined in fixed proportions in each industry, but at different rates in different industries. It was one of the first mathematical solutions to the problem of determining the prices of factors of production.Previously, some economists, such as Carl Menger
Carl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
and others of the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
, maintained that the value of factors of production is the individual contribution of each in the final product, but its value is the value of the last contributed to the final product (the marginal utility before reaching the point Pareto optimal). Thus, Wieser identified a flaw in the theory of imputation as expounded by his teacher, Carl Menger: overvaluation may occur if one is confronted with economies where profits jump (maximums and minimums in his utility function, where its second derivative equals 0). Wieser thus suggested as an alternative the simultaneous solution of a system of industrial equations.
- Industry 1: X + Y = 300
- Industry 2: 6X + Z = 900
- Industry 3: 4Y + 3Z = 1700 ⇒ X = 100, Y = 200, Z = 300.
Given that a factor is used in the production of a range of first-order goods, its value is determined by the good that is worth the least among all the goods in the range. This value is determined at the margin, the marginal utility of the last unit of the least valuable good produced by the factor. In connection with his opportunity cost, the value so derived represents an opportunity cost across all industries, and the values of the factors of production and goods are determined in the whole system. Thus, supply and demand do not develop into the determinants of value; the determinant of value is the marginal utility.
Practical Application
The following can be considered applications of Wieser's theory of imputation:- Linear programmingLinear programmingLinear programming is a mathematical method for determining a way to achieve the best outcome in a given mathematical model for some list of requirements represented as linear relationships...
, which deals with the case of discontinuous replacement of the factors. This approach is essentially the application of Wieser's theory of imputation to a single company. The business problem is to maximize total output by a set of linear constraints.
- Albert AftalionAlbert AftalionAlbert Abram Aftalion was a French Jewish economist.He taught at the Paris University . He co-founded the academic journal Revue économique in 1950 and presided over its board of directors....
used the theory as an argument against socialismSocialismSocialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
in his 1923 work Les fondements du Socialisme: Étude critique (The Foundations of Socialism: Critical study). This work states that pricePrice-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
s provide key information on the conditions of the marketMarketA market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
and are necessary for any economic activity. A socialist system that purported to be effective would have to use a price system to operate.
Alternative Cost Theory
The alternative cost theory (or opportunity cost theory) is a theory of enormous importance that comes from his Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economy), published in 1914, although his arguments were foreshadowed in his work Das Wesen und der Hauptinhalt der theoretischen Nationalokonomie (The Nature and Main Content of Theoretical State Economics), published in 1911. Wieser coined the term opportunity costOpportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
and performed a detailed study of the subject.
Opportunity cost is associated with a famous controversy from the early 20th century, where disciples of English economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
Alfred Marshall
Alfred Marshall
Alfred Marshall was an Englishman and one of the most influential economists of his time. His book, Principles of Economics , was the dominant economic textbook in England for many years...
were opposed to the continental economists of the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
, the head of which was Friedrich von Wieser, with his theory of alternative or opportunity cost. The debate focused on the following points:
- For the English, cost was a technical concept, the spending needed to produce something.
- For the Austrians, cost was a result of demandDemand (economics)In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay . The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time....
, as this would determine the level of productionProduction (economics)In economics, production is the act of creating 'use' value or 'utility' that can satisfy a want or need. The act may or may not include factors of production other than labor...
, depending on the willingness of buyers to pay that cost. Since demand is dependent upon the action of buyers, utilityUtilityIn economics, utility is a measure of customer satisfaction, referring to the total satisfaction received by a consumer from consuming a good or service....
would determine a thing's cost rather than technologyTechnologyTechnology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...
. In this context, the Austrian concept of opportunity cost claimed to ruin the British parametric concept of cost. The opportunity cost would be that which the purchaser would willingly forgo in agreeing to pay the cost of the option chosen.
The most notable feature of the concept is that opportunity cost would only make sense if the opportunity were fixed or reasonably limited. That is, if there is a conflict in performing multiple investments or actions, simultaneously or consecutively, it would not be feasible to have to choose among all the alternatives.
Thus, if a person has several options, you can calculate the opportunity cost of choosing one. But can we calculate a universal opportunity cost, which would include all the options? The prevailing opinion was that the opportunity cost could not be applied outside of cases of limited resources. This led some economists to limit the object of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
to "exceptional" resource situations (an idea still present in all economics textbooks). Still unknown are the consequences that might follow from an economic science that has no fixed limits outside of the economic system
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
, in terms of availability of goods.
Practical Application
- coined the term opportunity cost.
- gave shape to the theory that marked the beginning of the distinction between accounting cost ("the cost of production") and economic cost ("the cost of production" + the opportunity cost of not being able to obtain alternative).
Monetary Theory
Wieser also developed a monetary theory. It was inspired by the research of Carl MengerCarl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
, in particular by his study of currency, which discussed both the historical evolution of money and the theory of its value. Wieser used the theory of marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
as a basis for his monetary theory. It was initially rejected; in fact, some authors tried to prove that marginalism
Marginalism
Marginalism refers to the use of marginal concepts in economic theory. Marginalism is associated with arguments concerning changes in the quantity used of a good or service, as opposed to some notion of the over-all significance of that class of good or service, or of some total quantity...
necessarily failed when used as a basis for building such theories. However, his disciple, Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
, studied Wieser's theory and fleshed it out, creating the complex upon which he built the German concept of Geld (money).
Wieser conducted a further study on the effects of change in a currency's value on the relationship between the natural economy and the monetary economy.
Practical Application
- It was later applied to the problem of the Quantity theory of moneyQuantity theory of moneyIn monetary economics, the quantity theory of money is the theory that money supply has a direct, proportional relationship with the price level....
.
- It provided a new monetary theory within the Austrian school, and conducted a useful study on one specific type of possible influence on monetary value.
- Provided a basis for a further and still relevant study of monetary theory by his pupil, Ludwig von Mises.
Social economics
In his later years, Wieser ventured into the study of SociologySociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
, and this resulted in his 1914 publication, Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economy), from which is derived his theory of alternative cost or opportunity. Das Gesetz der Macht (The Law of Power), published in 1926, was his latest publication, a great sociological study from which we draw the following conclusions.
Wieser tried to explain the relationships and social forces through the study of history
History
History is the discovery, collection, organization, and presentation of information about past events. History can also mean the period of time after writing was invented. Scholars who write about history are called historians...
, and he concluded that economic forces held a prominent role in social evolution. Despite his interest in collective goals, such as economic well-being, Wieser adopted an individual
Individual
An individual is a person or any specific object or thing in a collection. Individuality is the state or quality of being an individual; a person separate from other persons and possessing his or her own needs, goals, and desires. Being self expressive...
approach, explicitly rejecting collectivism
Collectivism
Collectivism is any philosophic, political, economic, mystical or social outlook that emphasizes the interdependence of every human in some collective group and the priority of group goals over individual goals. Collectivists usually focus on community, society, or nation...
, approaching a more liberal
Liberalism
Liberalism is the belief in the importance of liberty and equal rights. Liberals espouse a wide array of views depending on their understanding of these principles, but generally, liberals support ideas such as constitutionalism, liberal democracy, free and fair elections, human rights,...
stance, and establishing the essential difference between social economics in general and Socialist Economics
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
.
Social Economy (in the original German, Gesellschaftliche Wirtschaft) treats humanity as a whole as an ideal economic subject, and contrasts it with nature, so that considerations of conflicting interests or economic justice become as irrelevant as they would to the economy of Robinson Crusoe
Robinson Crusoe
Robinson Crusoe is a novel by Daniel Defoe that was first published in 1719. Epistolary, confessional, and didactic in form, the book is a fictional autobiography of the title character—a castaway who spends 28 years on a remote tropical island near Trinidad, encountering cannibals, captives, and...
".
For Wieser, the individual is the root of all decisions. Decisions are made in the face of certain restrictions. Institutions are what define the restrictions on individual decisions. The reflection of these findings in political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
is apparent in actions such as:
- The regulation of imperfectly competitive firms whenever there are benefits of capitalCapital (economics)In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
that are being lost.
- Progressive taxation based on decreasing marginal utilityMarginal utilityIn economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
: The state should not try to offset all the inequalities of incomeIncomeIncome is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
and propertyPropertyProperty is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
by means of progressive taxation, but rather progressive taxation should be developed within the doctrine of diminishing marginal utility, i.e., every new tax adds a certain diminishing amount of utility. Thus, an unconscionable progressive tax , for example on the wealthy, would violate the spirit of privacy of Wieser's Social Economics.
- The duty of the state as producer of public goodPublic goodIn economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...
s: Wieser created the distinction between public goods and private goodPrivate goodA private good is defined in economics as "an item that yields positive benefits to people” that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits; and rivalrous, i.e. consumption by one...
s that in the future would be seized upon by his disciple, Friedrich August von Hayek.
- Intervening in the balance of social power between companies and unions for the benefit of workers, who could otherwise only hope to earn their marginal productivityProductivityProductivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average, expressing the total output divided by the total input...
.
These conditions, under which resources would be allocated to ensure the greatest value, describe his model of an ideal economy, which he calls social economics in the first part of his treatise entitled Theorie der gesellschaftlichen Wirtschaft (Theory of Social Economics). He made idealized assumptions using his model as the benchmark standard for evaluating the effectiveness
Effectiveness
Effectiveness is the capability of producing a desired result. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression.-Etymology:...
of administritative intervention in the market economy.
Thus Wieser's Social Economics is, in effect, a Communist
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
economy in which, to achieve greater productivity, scarce resources are assigned by an omnipresent, benevolent planner with direct and accurate insight sufficient to know the intensities of satisfactions and needs experienced by individual members of society, which all have exactly the same tastes and the same scales of utility and receive the same income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
s. Moreover, their directions are followed without question by a completely docile workforce.
In the spotlight: Wieser and the new liberalism
When labeling Wieser a neoliberal, particular emphasis is placed on the definition of Ludwig von MisesLudwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
. The English edition of his 1927 book, Liberalismus, uses the term neoliberalism to translate what Mises called in German neuen Liberalismus (new liberalism). In this book, Mises uses the term to designate socialists posing as liberals (a term he later replaced with pseudoliberals), leaving Wieser, in Mises's view, under this definition for being a Fabian socialist. Also, in his later book, Socialism, he applies the neoliberal label to liberal supporters of the then new subjective theory of value, including Carl Menger
Carl Menger
Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.- Biography :Menger...
and Wieser.
When Carl Menger, Eugen von Böhm-Bawerk
Eugen von Böhm-Bawerk
Eugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...
, and Wieser began their careers in science, they were not focused on economic policy issues, much less in the rejection of intervention
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
promoted by classical liberalism
Classical liberalism
Classical liberalism is the philosophy committed to the ideal of limited government, constitutionalism, rule of law, due process, and liberty of individuals including freedom of religion, speech, press, assembly, and free markets....
. Their common vocation was to develop an economic theory on a firm basis. To do this, following the course initiated by Carl Menger, Wieser, along with his friend and brother-in-law Eugen von Böhm-Bawerk, disapproved of the policies of interventionism that the Austrian government, as all governments of the time, had adopted, arguing that only the free market could allow more efficient
Efficiency
Efficiency in general describes the extent to which time or effort is well used for the intended task or purpose. It is often used with the specific purpose of relaying the capability of a specific application of effort to produce a specific outcome effectively with a minimum amount or quantity of...
economic and social development.
Wieser believed that he could contribute to a return to liberal policies, both by explaining his economic vision in his books and articles as well as by teaching it in his role as university professor at the University of Prague
University of Economics, Prague
The University of Economics, Prague, is a public university located in Prague, Czech Republic. It is the largest university in the field of economics, business and information technologies in the Czech Republic with almost 20,000 students in its bachelor, masters and doctoral programmes.-Schools...
and University of Vienna
University of Vienna
The University of Vienna is a public university located in Vienna, Austria. It was founded by Duke Rudolph IV in 1365 and is the oldest university in the German-speaking world...
. In addition, his positions within the Austrian ministries allowed him to adopt more or less liberal economic policies. But it was his liberal vision that separated him from the British economists of his era, discarding classical and neoclassical idealized models that did not contemplate the possibility of monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
or the existence of economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
.
Wieser, meanwhile, did not acknowledge essentialism
Essentialism
In philosophy, essentialism is the view that, for any specific kind of entity, there is a set of characteristics or properties all of which any entity of that kind must possess. Therefore all things can be precisely defined or described...
or any teleological
Teleology
A teleology is any philosophical account which holds that final causes exist in nature, meaning that design and purpose analogous to that found in human actions are inherent also in the rest of nature. The word comes from the Greek τέλος, telos; root: τελε-, "end, purpose...
version of causality. As opposed to the historical method
Historical method
Historical method comprises the techniques and guidelines by which historians use primary sources and other evidence to research and then to write histories in the form of accounts of the past. The question of the nature, and even the possibility, of a sound historical method is raised in the...
of the German historicist school,
he developed a logical method
Scientific method
Scientific method refers to a body of techniques for investigating phenomena, acquiring new knowledge, or correcting and integrating previous knowledge. To be termed scientific, a method of inquiry must be based on gathering empirical and measurable evidence subject to specific principles of...
, with both its deductive
Deductive reasoning
Deductive reasoning, also called deductive logic, is reasoning which constructs or evaluates deductive arguments. Deductive arguments are attempts to show that a conclusion necessarily follows from a set of premises or hypothesis...
slope as well as its inductive
Inductive reasoning
Inductive reasoning, also known as induction or inductive logic, is a kind of reasoning that constructs or evaluates propositions that are abstractions of observations. It is commonly construed as a form of reasoning that makes generalizations based on individual instances...
slope (see interpolation
Interpolation
In the mathematical field of numerical analysis, interpolation is a method of constructing new data points within the range of a discrete set of known data points....
and extrapolation
Extrapolation
In mathematics, extrapolation is the process of constructing new data points. It is similar to the process of interpolation, which constructs new points between known points, but the results of extrapolations are often less meaningful, and are subject to greater uncertainty. It may also mean...
). Economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
has, like Mathematics
Mathematics
Mathematics is the study of quantity, space, structure, and change. Mathematicians seek out patterns and formulate new conjectures. Mathematicians resolve the truth or falsity of conjectures by mathematical proofs, which are arguments sufficient to convince other mathematicians of their validity...
and Logic
Logic
In philosophy, Logic is the formal systematic study of the principles of valid inference and correct reasoning. Logic is used in most intellectual activities, but is studied primarily in the disciplines of philosophy, mathematics, semantics, and computer science...
, an a priori character rather than the empirical
Empirical method
The empirical method is generally taken to mean the approach of using a collection of data to base a theory or derive a conclusion in science...
character of science
Science
Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe...
.
Thus, empirical phenomena are considered continuously variable, meaning that social developments have no parameters or constants, only variables, which makes it very difficult, if not impossible, to extract historical laws or make predictions. This point is the epicenter of the methodological discussion between the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
and the German School
German School
*German School of Athens*German School of Guayaquil*German School of Lisbon*German School of Manila*German School of Milan*German School New York*German School of San Salvador*German School Seoul International*German School Washington, D.C....
.
In what little Wieser wrote about methodology, he stated that economics is a kind of applied psychology
Psychology
Psychology is the study of the mind and behavior. Its immediate goal is to understand individuals and groups by both establishing general principles and researching specific cases. For many, the ultimate goal of psychology is to benefit society...
for which the procedure is introspection, claiming similarity between Economics and sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
in that both attempt to achieve a more successful social reality of man, promoting the idea of utility
Utility
In economics, utility is a measure of customer satisfaction, referring to the total satisfaction received by a consumer from consuming a good or service....
that reports on each good and each individual. Aside from abandoning essentialism, both Eugen von Böhm-Bawerk and Wieser advocated objectively considering subjective factors, setting aside ideas that believe in the existence of an objective superhuman (essentialism
Essentialism
In philosophy, essentialism is the view that, for any specific kind of entity, there is a set of characteristics or properties all of which any entity of that kind must possess. Therefore all things can be precisely defined or described...
) and theories of subjective elements that are incapable of objective measures (teleology
Teleology
A teleology is any philosophical account which holds that final causes exist in nature, meaning that design and purpose analogous to that found in human actions are inherent also in the rest of nature. The word comes from the Greek τέλος, telos; root: τελε-, "end, purpose...
of causality).
These ideas (the rejection of the state intervention
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
in the economy, essentialism and the teleological view of causality), defended by the Austrian School in general, were never approved by the governors. By contrast, authors such as John Maynard Keynes
John Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...
, Vladimir I. Lenin, Paul Baran
Paul Baran
Paul Baran was a Polish American engineer who was a pioneer in the development of computer networks.He invented packet switching techniques, and went on to start several companies and develop other technologies that are an essential part of the Internet and other modern digital...
and Gunnar Myrdal
Gunnar Myrdal
Karl Gunnar Myrdal was a Swedish Nobel Laureate economist, sociologist, and politician. In 1974, he received the Nobel Memorial Prize in Economic Sciences with Friedrich Hayek for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the...
came to be greatly appreciated by the academy and by centers of power for providing theoretical justification for economic intervention
Economic interventionism
Economic interventionism is an action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulation of fraud and enforcement of contracts, in an effort to affect its own economy...
when searching for measures to prop up plutocratic
Plutocracy
Plutocracy is rule by the wealthy, or power provided by wealth. The combination of both plutocracy and oligarchy is called plutarchy. The word plutocracy is derived from the Ancient Greek root ploutos, meaning wealth and kratos, meaning to rule or to govern.-Usage:The term plutocracy is generally...
regimes.
Throughout the first half of the 20th century, Austrian economists were marginalized and found it difficult to work. Specifically, while Wieser served as trade minister during the World War
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, his effectiveness was neutralized by Richard Riedl, minister of energy and a clear proponent of economic interventionism, with only minor matters being left to Wieser's jurisdiction.
In fact, after his death a book was dedicated as a tribute to him, in which prestigious economists collaborated, such as
Knut Wicksell
Knut Wicksell
Johan Gustaf Knut Wicksell was a leading Swedish economist of the Stockholm school. His economic contributions would influence both the Keynesian and Austrian schools of economic thought....
, who was persecuted and killed during the Nazi Regime
Nazism
Nazism, the common short form name of National Socialism was the ideology and practice of the Nazi Party and of Nazi Germany...
. The work was censored and discredited in countries such as United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
Only in the late twentieth century, when economic crises resulting from Marxist
Marxism
Marxism is an economic and sociopolitical worldview and method of socioeconomic inquiry that centers upon a materialist interpretation of history, a dialectical view of social change, and an analysis and critique of the development of capitalism. Marxism was pioneered in the early to mid 19th...
and Keynesian economic structures collapsed, have his liberal economic theories
Liberalism
Liberalism is the belief in the importance of liberty and equal rights. Liberals espouse a wide array of views depending on their understanding of these principles, but generally, liberals support ideas such as constitutionalism, liberal democracy, free and fair elections, human rights,...
been reconsidered and accepted.
Works
- Ursprung und Hauptgesetze des wirthschaftlichen Werthes, 1884.
- Der natürliche Werth, 1889; Natural Value, 1893, translated into English by Christian A. Malloch, edited with an introduction by William Smart.
- Theorie der gesellschaftlichen Wirtschaft, 1914; Social Economics, 1927, translated into English by A. Ford Hinrichs, with a preface by Wesley Clair Mitchell.
- Das Gesetz der Macht, 1926; The Law of Power, 1983, translated into English by W.E. Kuhn, edited with an introduction by Warren J. Samuels.
- Die österreichische Schule und die Werth Theorie (The Austrian School and the Value Theory), 1891.
- Die Wert Theorie (The Value Theory), 1892.
- Die Theorie der städtischen Grundrente (The Theory of Urban Ground Rent), 1909.
- Das wesen und der Hauptinhalt der theoretischen Nationalökonomie (The essence and the main content of theoretical economics), 1911.
- Das geschichtliche Werk der Gewalt (The History of State Power), 1923.
- Die Nationale Steuerleistung Und Der Landeshaushalt Im Königreiche Böhmen: Antwort Auf Die Erwägungen (The National tax services and the state budget in the kingdom of Bohemia: Response to the considerations), 1923.