The Austrian School
Relevant as never before
A small group of brilliant thinkers in the 1870s has greatly contributed to our modern understanding of economics. Here you can find a small guideline to the Austrian School of Economics – and with this also to the most important aspects of the history of economic thought in the 20th century.
Vienna at the turn of the century was a fascinating place full of intellectual activity that brought forward a huge number of memorable personalities, whose ideas have shaped our contemporary way of looking at the world.
Around this time, significant progress was made in the fields of psychology (Sigmund Freud), in the arts (Gustav Klimt), in music (Arnold Schoenberg, Gustav Mahler), in medicine (Theodor Billroth), in physics (Ernst Mach) and in philosophy (Ludwig Wittenstein). But did you know that Vienna was also the birthplace of our modern understanding of economics?
While Freud revolutionised psychology, a group of leading economists, lead by Carl Menger, Eugen von Böhm-Bawerk and Friedrich von Wieser, used similar principles to reinvent economic science. These men rejected the mechanistic and deterministic approach of their colleagues in mainstream economics and instead proposed some form of “pure” economics, which allowed for the consideration of the importance of human action and individual preferences. Because of the large differences to the mainstream of economic science, this approach quickly got labeled as the “Austrian” School of Economics.
It is quite noticeable that this approach recognised the special importance of risk and uncertainly in economic life and started to incorporate these concepts into its theorising.
Furthermore, it can certainly be argued that the Austrian School of Economics has contributed to the creation of wealth on a global level like no other school of thought.
Austrian Economics today
Nowadays, the tradition of the Austrian School of Economics is perhaps even more vivid and lively than it has ever been since its founding. In the 1970’s – parallel to the oil-crisis and the failure of the Keynesian paradigm – a renaissance of this strand of economic research slowly took shape. By now there are thousands of proponents and and supporters of the Austrian approach and interested students can even obtain degrees in Austrian Economics.
Among today’s most pronounced academics sympathetic to the Austrian tradition are Peter Boettke, Jörg Guido Hülsmann, Jesus Huerta de Soto, Philipp Bagus, Steven Horwitz, Mario Rizzo and Peter T. Leeson.