The Austrian School of Economics 1 By :

This paper presents an overview of the Austrian school of economics. Even though it started with Carl Menger and the intellectual circle in 19 century Vienna, its theoretical and philosophical roots go far back to the Scholastics and even the Greeks starting with Socrates (469-399 B.C.), Plato (427-347 B.C.), Aristotle (384-322 B.C.) and later John Locke (1632-1704), Richard Cantillon (1680-1734), David Hume (1711-1776), Kant (1724-1804), Anna Robert Jacques Turgot (1727-1781), Adam Smith (1732-1790), Franz Brentano (1838-1917), and others. On the other hand, this school faced considerable amount of difficulties as it confronted the German Historical School and the old mercantilists and protectionist doctrines of Europe after Carl Menger (1840-1921). The second generation included such economists as Eugen von Böhm-Bawerk (1851-1914) and Friedrich von Wieser (1851-1926) who defended the school against the German Historical School. Then the third generation of Austrian economists such as Ludwig von Mises and Friedrich von Hayek followed the traditional path of the school even after its migration from Austria to the United States. Others such as Joseph Schumpeter (1883-1950), however, later denied their Austrian roots. Now the fourth generation Austrian economists attempt to theorize Austrian philosophy in a coherent and realistic way into mainstream economic theory.