The Austrian School of Economics

Why the Austrian School of Economics?

 

Due to its approach, the thinking of the Austrian (or Viennese) School of Economics (“Austrian Economics”) is able to explain economic relations and their social and political implications in an extremely accurate and accessible way. It is not based on a fictitious homo oeconomicus, but on people as they really are and as they behave. It adequately takes into account the economically relevant aspects of the real world and is consistent with the nature and psychology of human action. In this way, it also corresponds to the citizen’s common sense.

The Austrian School of Economics promotes an economic and social thinking that is not trapped in unrealistic, mostly mathematical models. It does not see the economy as an object of state political regulation and central, almost engineering-like control. Rather, its analysis focuses on autonomous entrepreneurial action and the free interaction of individuals in the marketplace, which eludes both the logic of differential equations, and centrally planned political control.

The basic, generally understandable insights of the Austrian School of Economics provide citizens with the necessary knowledge to recognize the political seductions that threaten freedom and prosperity, and motivate them to develop independent entrepreneurial initiative in all areas of society. If citizens lack basic economic literacy, they easily become the playthings of irresponsible politicians, passive recipients of state benefits, and helpless victims of bureaucratic procedures.

 

Main building of the University of Vienna, place of activity of the founders of the Austrian School of Economics

The founders of the Austrian School of Economics were Carl Menger (1840-1921) and his students Eugen von Böhm-Bawerk (1851-1914) and Friedrich von Wieser (1851-1926). In the twentieth century, the Austrian School of Economics was represented primarily by Ludwig von Mises (1881-1973) and Friedrich A. von Hayek (1899-1992, Nobel Prize in Economics 1974), who both emigrated from Vienna to the U.S. and England in the 1930s. Today, the school is especially influential in the English-speaking world (“Austrian Economics”), but is gaining increasing influence in Europe as well.

Memorial plaques of the founders of the Austrian School of Economics at the University of Vienna

Carl Menger
Evgen v. Böhm
Wieser
Ludvig von Mises

Ludwig von Mises

1881-1973

Austro-American economist
Theoretician of classical liberalism

Friedrich A. von Hayek

Friedrich A. von Hayek

1899-1992

Austrian economist
and social philosopher
Nobel Prize for Economics 1974

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