Editing Carl Menger

{{short description|Founder of the Austrian School of economics (1840–1921)}}
{{About|the economist|his son, the mathematician|Karl Menger}}
{{expand German|topic=bio|date=October 2018}}
{{Infobox economist
 | school_tradition = [[Austrian school of economics|Austrian school]]
 | image       = Carl Menger Portrait ONB cropped.png
 | caption     = Carl Menger von Wolfensgrün, founder of the Austrian school
 | name             =  Carl Menger von Wolfensgrün
 | birth_date       =  {{Birth date|1840|2|28|df=y}}
 | birth_place      = [[Nowy Sącz|Neu Sandez]], [[Galicia (eastern Europe)|Galicia]], [[Austrian Empire]]<br>(now Nowy Sącz, [[Poland]])
 | death_date       =  {{Death date and age|1921|2|26|1840|2|28|df=y}}
 | death_place      = [[Vienna]], [[Republic of Austria (1919–1934)|Austria]]
 | resting_place    = [[Vienna Central Cemetery]]<ref>[http://www.viennatouristguide.at/Friedhoefe/Zentralfriedhof/Index_00_Thumbs/z_index_00_kl.htm "Ehrengräber Gruppe 0"], viennatouristguide.at</ref>
 | field            = [[Political economy]]
 | alma_mater       = [[Charles University]]<br>[[University of Vienna]]<br>[[Jagiellonian University]]
 | influences       = {{flatlist|
*[[Aristotle]]
*[[Étienne Bonnot de Condillac|Condillac]]
*[[Adam Smith|Smith]]
*[[Immanuel Kant|Kant]]
*[[Franz Brentano|Brentano]]<ref>[[Barry Smith (ontologist)|Barry Smith]], [http://ontology.buffalo.edu/smith/articles/menger.html "Aristotle, Menger, Mises: An Essay in the Metaphysics of Economics"] {{Webarchive|url=https://web.archive.org/web/20201113152639/http://ontology.buffalo.edu/smith/articles/menger.html |date=2020-11-13 }}, ''[[History of Political Economy]]'', Annual Supplement to vol. 22 (1990), 263–288.</ref>
* [[Herbert Spencer|Spencer]]
}}
 | contributions    = [[Marginal utility]], [[subjective theory of value]]
|notable_students=[[Rudolf, Crown Prince of Austria|Prince Rudolf]]}}
{{Austrian School sidebar}}

'''Carl Menger von Wolfensgrün'''<ref name="auto">{{Cite news|url=https://geschichte.univie.ac.at/de/personen/carl-menger-von-wolfensgrun-prof-dr|title=Carl Menger von Wolfensgrün, o. Univ.-Prof. Dr.|newspaper=650 Plus|date=28 June 2014|access-date=November 19, 2021}}</ref> ({{IPAc-en|ˈ|m|ɛ|ŋ|g<!--there is a /g/ in English as opposed to German-->|ər}}; {{IPA|de|ˈmɛŋɐ|lang}}; 28 February 1840<ref>{{cite book|author=Mark Blaug|title=Carl Menger (1840–1921)|url=https://books.google.com/books?id=b0G6AAAAIAAJ|year=1992|publisher=E. Elgar|isbn=978-1-85278-489-8|pages=46, 92}} Note: Some sources say 23 February</ref> – 26 February 1921) was an Austrian economist who contributed to the [[marginalism|marginal theory]] of value.<ref>{{cite web |title=Britannica - Carl Menger |url=https://www.britannica.com/money/Carl-Menger}}</ref> Menger is considered the founder of the [[Austrian school of economics]].<ref>{{Cite web|url=http://www.encyclopedia.com/people/social-sciences-and-law/economics-biographies/carl-menger|title=Carl Menger facts, information, pictures {{!}} Encyclopedia.com articles about Carl Menger|website=www.encyclopedia.com|access-date=June 30, 2017|archive-date=June 6, 2021|archive-url=https://web.archive.org/web/20210606092921/https://www.encyclopedia.com/people/social-sciences-and-law/economics-biographies/carl-menger|url-status=live}}</ref> 

In building his marginalist approach, Menger rejected many established views of [[classical economics]]. He directly disputed the view of the "German school" that economic theory could be derived from history. Departing from the [[cost-of-production theory of value]]—the prevailing theory of [[Adam Smith]], [[David Ricardo]], and [[Karl Marx]]—Menger's [[subjective theory of value]] emphasized role of mutual agreement in deriving prices.<ref>{{Cite web|url=https://www.britannica.com/biography/Carl-Menger|title=Carl Menger {{!}} Austrian economist|work=Encyclopædia Britannica|access-date=June 30, 2017|archive-date=September 8, 2017|archive-url=https://web.archive.org/web/20170908160845/https://www.britannica.com/biography/Carl-Menger|url-status=live}}</ref> Although he had few readers outside Vienna until late in his career, disciples including [[Eugen von Böhm-Bawerk]] and [[Friedrich von Wieser]] brought his theories into wider readership. [[Friedrich Hayek]] wrote that the Austrian school's "fundamental ideas belong fully and wholly to Carl Menger."<ref>{{cite book |last=Hayek |first=Friedrich |editor-last=Klein |editor-first=Peter G. |chapter=Carl Menger (1840–1921) |title=The Fortunes of Liberalism: Essays on Austrian Economics and the Ideal of Freedom |year=1992 |orig-date=First published 1934|publisher=Routledge |page=62}}</ref>

Menger began his career as a lawyer and business journalist, during which he saw inconsistencies between existing economic theory and how buyers reasoned. After formal training in economics, he taught at the [[University of Vienna]] from 1872 to 1903. He became a private tutor and confidant to [[Rudolf, Crown Prince of Austria|Rudolf von Habsburg]], the crown prince of Austria. 

==Biography==

=== Family and education ===
Carl Menger von Wolfensgrün<ref name="auto"/> was born in the city of [[Nowy Sącz|Neu-Sandez]] in the [[Kingdom of Galicia and Lodomeria]], [[Austrian Empire]], which is now [[Nowy Sącz]] in Poland.<ref>{{cite web |title=Britannica -Carl Menger |url=https://www.britannica.com/money/Carl-Menger}}</ref> He was the son of a wealthy family of minor nobility; his father, Anton Menger, was a lawyer. His mother, Caroline Gerżabek, was the daughter of a wealthy [[Bohemia]]n merchant. He had two brothers, [[Anton Menger|Anton]] and Max, both prominent as lawyers. His son, [[Karl Menger]], was a mathematician who taught for many years at [[Illinois Institute of Technology]].<ref>{{cite web|title=Remembering Karl Menger|url=http://www.iit.edu/csl/events/archive/remembering_menger.shtml|access-date=March 26, 2009|publisher=[[Illinois Institute of Technology]]|archive-url=https://web.archive.org/web/20090402052624/http://www.iit.edu/csl/events/archive/remembering_menger.shtml|archive-date=April 2, 2009|url-status=dead}}</ref>

After attending [[Gymnasium (school)|Gymnasium]], he studied law at the universities of [[Charles University|Prague]]<ref>{{cite web |title=The daily Economy- Carl Menger |date=5 January 2021 |url=https://thedailyeconomy.org/article/carl-menger-and-the-sesquicentennial-founding-of-the-austrian-school/}}</ref> and [[University of Vienna|Vienna]] and later received a doctorate in jurisprudence from the [[Jagiellonian University]] in Kraków. In the 1860s Menger left school and enjoyed a stint as a journalist reporting and analyzing market news, first at the ''Lemberger Zeitung'' in Lemberg, Austrian Galicia (now [[Lviv]], Ukraine) and later at the {{Lang|de|[[Wiener Zeitung]]}} in Vienna.{{Citation needed|date=July 2024}}

=== Career ===
During the course of his newspaper work, he noticed a discrepancy between what the classical economics he was taught in school said about [[price]] determination and what real world market participants believed. In 1867, Menger began a study of [[political economy]] which culminated in 1871 with the publication of his ''[[Principles of Economics (Menger book)|Principles of Economics]]'' ({{Lang|de|Grundsätze der Volkswirtschaftslehre}}), thus becoming the father of the [[Austrian school of economics]].<ref>{{cite web |title=Mises Institute: Carl Menger: The Founding of the Austrian School |date=8 July 2023 |url=https://mises.org/articles-interest/carl-menger-founding-austrian-school}}</ref><ref>{{cite book |last= Hayek |first= Friedrich |author-link= Friedrich Hayek |chapter= The Place of Menger's Grundsätze in the History of Economic Thought |title= New Studies in Philosophy, Politics, Economics and History of Ideas |place= London and Chicago |publisher= Routledge and University of Chicago Press |year= 1978 |pages= [https://archive.org/details/newstudiesinphil0000haye/page/270/mode/2up?view=theater 270-282] |url=https://archive.org/details/newstudiesinphil0000haye/page/n5/mode/2up?view=theater |url-access= registration |via= [[Internet Archive]]}}</ref> It was in this work that he challenged classical cost-based theories of value with his theory of marginality – that price is determined at the margin.

In 1872 Menger was enrolled into the law faculty at the [[University of Vienna]] and spent the next several years teaching finance and political economy both in seminars and lectures to a growing number of students. In 1873, he received the university's chair of economic theory at the very young age of 33.

In 1876 Menger began tutoring Archduke [[Rudolf, Crown Prince of Austria|Rudolf von Habsburg]], the crown prince of Austria, in political economy and statistics. For two years, Menger accompanied the prince during his travels, first through continental Europe and then later through the British Isles.<ref>The History of Economic Thought: A Reader</ref> He is also thought to have assisted the crown prince in the composition of a pamphlet, published anonymously in 1878, which was highly critical of the higher Austrian aristocracy. His association with the prince would last until [[Mayerling incident|Rudolf's suicide in 1889]].

In 1878 Rudolf's father, Emperor [[Franz Joseph I of Austria|Franz Joseph]], appointed Menger to the chair of political economy at Vienna. The title of ''[[Hofrat]]'' was conferred on him, and he was appointed to the Austrian {{Lang|de|[[Imperial Council (Austria)|Herrenhaus]]}} in 1900.

==== Dispute with the historical school ====
Ensconced in his professorship, he set about refining and defending the positions he took and methods he utilized in ''Principles'', the result of which was the 1883 publication of ''Investigations into the Method of the Social Sciences with Special Reference to Economics'' (''{{Lang|de|Untersuchungen über die Methode der Socialwissenschaften und der politischen Oekonomie insbesondere}}''). The book caused a firestorm of debate, during which members of the [[historical school of economics]] began to derisively call Menger and his students the "Austrian school" to emphasize their departure from mainstream German economic thought – the term was specifically used in an unfavourable review by [[Gustav von Schmoller]].

In 1884 Menger responded with the pamphlet ''The Errors of Historicism in German Economics'' and launched the infamous {{Lang|de|[[Methodenstreit]]}}, or methodological debate, between the historical school and the Austrian school. During this time Menger began to attract like-minded disciples who would go on to make their own mark on the field of economics, most notably [[Eugen von Böhm-Bawerk]], and [[Friedrich von Wieser]].

In the late 1880s, Menger was appointed to head a commission to reform the Austrian monetary system. Over the course of the next decade, he authored a plethora of articles which would revolutionize [[monetary theory]], including "The Theory of Capital" (1888) and "Money" (1892).<ref>"On the Origin of Money" (English translation by Caroline A. Foley), ''Economic Journal'', Volume 2 (1892), pp. 239–55.</ref> Largely due to his pessimism about the state of German scholarship, Menger resigned his professorship in 1903 to concentrate on study.

==Economics==
[[File:Menger - Untersuchungen über das Methode der socialwissenschaften und der politischen Ökonomie insbesondere, 1933 - 5787924.tif|thumb|''{{Lang|de|Untersuchungen über die Methode der Socialwissenschaften, und der Politischen Oekonomie insbesondere}}'', 1933]]
Menger used his [[subjective theory of value]] to arrive at what he considered one of the most powerful insights in economics: "both sides gain from exchange." Unlike [[William Stanley Jevons|William Jevons]], Menger did not believe that goods provide "utils," or units of utility. Rather, he wrote, goods are valuable because they serve various uses whose importance differs. Menger also came up with an explanation of how money develops that is still accepted by some schools of thought today.<ref name="econlib">{{Cite book |chapter=Carl Menger (1840–1921) |chapter-url=http://www.econlib.org/library/Enc/bios/Menger.html |title=[[The Concise Encyclopedia of Economics]] |edition=2nd |series=[[Library of Economics and Liberty]] |publisher=[[Liberty Fund]] |year=2008 |access-date=2005-12-21 |archive-date=2016-09-03 |archive-url=https://web.archive.org/web/20160903101716/http://www.econlib.org/library/Enc/bios/Menger.html |url-status=live }}</ref>

=== Money ===
Menger believed that gold and silver were the precious metals that were adopted as money for their unique attributes like costliness, durability, and easy preservation, making them the "most popular vehicle for hoarding as well as the goods most highly favoured in commerce."<ref>{{Cite journal |last=Menger |first=Karl |date=June 1892 |title=On the Origin of Money |url=http://dx.doi.org/10.2307/2956146 |journal=[[The Economic Journal]] |volume=2 |issue=6 |pages=239–255 |doi=10.2307/2956146 |jstor=2956146 |issn=0013-0133 |access-date=2023-03-10 |archive-date=2021-03-22 |archive-url=https://web.archive.org/web/20210322092455/https://www.jstor.org/stable/2956146?origin=crossref |url-status=live }}</ref> Menger showed that "their special saleableness" tended to make their [[Bid–ask spread|bid-ask spread]] tighter than any other market good, which led to their adoption as a general [[medium of exchange]] and evolution in many societies as [[money]].

==Works==
* 1871 – {{cite book |title = Grundsätze der Volkswirthschaftslehre, Erster, Allgemeiner Theil |url= https://archive.org/details/grundstzedervol01menggoog/page/n4/mode/2up|place= Wien |publisher= Wilhelm Braumüller |year= 1871 |via = [[Internet Archive]]}}; Translated as {{cite book |title= Principles of Economics, First, General Part |year= 1950 |translator= Dingwall, James |translator2= Hoselitz, Bert F. |url= https://archive.org/details/principlesofecon0000meng/page/n5/mode/2up?view=theater|url-access= registration |place= Glencoe, Illinois |publisher= The Free Press}}
* 1883 – {{cite book |url= https://archive.org/details/untersuchungenb00menggoog/page/n9/mode/2up?view=theater |title= Untersuchungen über die Methode der Socialwissenschaften und der politischen Oekonomie insbesondere |year= 1883 |place= Leipzig |publisher= Duncker & Humblot |via= [[Internet Archive]]}}; Translated as {{cite book |title= Problems of Economics and Sociology [Investigations into the Method of the Social Sciences with Special Reference to Economics] |editor= Schneider, Louis |translator= Nock, Francis J. |url=https://archive.org/details/problemsofeconom0000meng/page/n5/mode/2up?view=theater |year= 1963 |publisher= University of Illinois Press |place= Urbana |url-access= registration |via= [[Internet Archive]]|ref=none}}
* 1884 – ''The Errors of Historicism in German Economics''
* 1888 – ''The Theory of Capital''
* 1892 – {{cite journal |title= On the Origin of Money |journal=[[The Economic Journal]]|volume= 2 |year= 1892 |issue= 6 |pages= 239–255 |translator= Caroline A. Foley |translator-link = Caroline Rhys Davids|jstor= 2956146 |last= Menger |first= Karl|author-link=0|doi= 10.2307/2956146|ref=none}}

==See also==
* [[History of macroeconomic thought]]
* [[Historical school of economics]]

==References==
{{Reflist}}

==Further reading==
{{div col|colwidth=45em}}
* {{cite book |editor= Caldwell, Bruce |editor-link= Bruce Caldwell (economist)|title= Carl Menger and his legacy in economics |place= Durham and London |year= 1990 |publisher= Duke University Press |isbn= 978-0-8223-1087-7|url= https://archive.org/details/carlmengerhisleg0000unse/page/n5/mode/2up |url-access= registration |via=[[Internet Archive]]|ref=none}}
* [[Richard Ebeling|Ebeling, Richard M.]], [https://www.aier.org/article/carl-menger-and-the-sesquicentennial-founding-of-the-austrian-school/ "Carl Menger and the Sesquicentennial Founding of the Austrian School,"] [[American Institute for Economic Research]], January 5, 2021
* Ebeling, Richard M., [https://www.aier.org/article/carl-mengers-theory-of-institutions-and-market-processes/ "Carl Menger's Theory of Institutions and Market Processes,"] American Institute for Economic Research, April 13, 2021
* {{cite journal |author= Hayek, Friedrich A. |author-link=Friedrich Hayek|title= Carl Menger |journal=[[Economica]]|volume= 1 |issue= 4 |pages= 393–420 |jstor=2549123 |doi= 10.2307/2549123 |date= November 1934|ref=none}}
*{{cite book |author= Hayek, Friedrich A.|editor= Spiegel, Henry William |chapter= Hayek on Menger |title= The Development of Economic Thought: Great Economists in Perspective
|pages= [https://archive.org/details/developmentofeco0000unse_m4i5/page/526/mode/2up?view=theater 526]–533 |url=https://archive.org/details/developmentofeco0000spie/page/n5/mode/2up?view=theater |place=New York and London |publisher= John Wiley & Sons, Inc.; Chapman & Hall, Limited |year= 1952 |via= [[Internet Archive]]|ref=none}}
* {{cite book |author= Hayek, Friedrich A. von|editor= Sills, David L. |chapter= Menger, Carl |title= International Encyclopedia of the Social Sciences |place= |publisher= The Macmillan Company & The Free Press |volume = 10 |year= 1968 |url= https://archive.org/details/internationalenc0010davi/page/n5/mode/2up?view=theater |pages= [https://archive.org/details/internationalenc0010davi/page/124/mode/2up?view=theater 124]–127 |via= [[Internet Archive]]|ref=none}}
* {{cite book |author= Knight, Frank |author-link= Frank Knight |chapter= Introduction |pages= [https://archive.org/details/principlesofecon0000meng/page/8/mode/2up?view=theater 9]–35|title= Principles of Economics, First, General Part |year= 1950 |translator= Dingwall, James |translator2= Hoselitz, Bert F. |url= https://archive.org/details/principlesofecon0000meng/page/n5/mode/2up?view=theater|url-access= registration |place= Glencoe, Illinois |publisher= The Free Press |via= [[Internet Archive]]|ref=none}}
* {{cite book |author= Schumpeter, Joseph Alois |author-link= Joseph Schumpeter |chapter= Carl Menger (1840–1921) |translator = Hans W. Singer |title= Ten Great Economists: From Marx to Keynes |place= New York |publisher= Oxford University Press |pages= [https://archive.org/details/tengreateconomis0000schu_v5w3/page/80/mode/2up?view=theater 80]–90 |url= https://archive.org/details/tengreateconomis0000schu_v5w3/page/n5/mode/2up?view=theater |year= 1951 |isbn= 978-0-19-500719-0 |via= [[Internet Archive]]|ref=none}}
* {{cite journal|doi=10.1007/BF03024445|title=Exact thought in a demented time: Karl Menger and his Viennese mathematical colloquium|journal=[[The Mathematical Intelligencer]]|volume=22|pages=34–45|year=2000|last1=Senechal|first1=Marjorie|last2=Golland|first2=Louise|last3=Sigmund|first3=Karl|s2cid=120063990|ref=none}}
* {{cite journal |author=Stigler, George |author-link= George Stigler |title= The Economics of Carl Menger |journal= Journal of Political Economy |volume= 45 |issue= 2 |pages= 229–250 |year= 1937 |doi=10.1086/255042|s2cid= 154936520|ref=none}}
*{{cite web |author= Streissler, Erich W. |url= https://www.deutsche-biographie.de/sfz61666.html#ndbcontent |title= Menger, Carl, Nationalökonom, * 23.2.1840 Neu-Sandez (Galizien), † 26.2.1921 Wien. (katholisch) |publisher= Deutsche Biographie|language = de |access-date= 29 November 2023|ref=none}}
* {{cite encyclopedia |last=White |first=Lawrence H. |author-link= Lawrence H. White|editor-first=Ronald |editor-last=Hamowy |editor-link=Ronald Hamowy |encyclopedia=The Encyclopedia of Libertarianism |title= Menger, Carl (1840–1921) |url= https://books.google.com/books?id=yxNgXs3TkJYC |year=2008 |publisher= [[SAGE Publishing|Sage]]; [[Cato Institute]] |location= Thousand Oaks, California|doi= 10.4135/9781412965811.n130|isbn= 978-1412965804 |oclc=750831024| lccn = 2008009151 |pages=325–326|ref=none}}
* von Wieser, Friedrich, [https://www.aier.org/article/carl-menger-a-biographical-appreciation-by-friedrich-von-wieser/ "Carl Menger: A Biographical Appreciation"] [1923], American Institute for Economic Research, February 25, 2019
{{div col end}}

==External links==
{{Library resources box|by=yes|onlinebooks=yes|about=yes}}
* {{commons category-inline}}
* {{Wikiquote-inline}}
* {{Internet Archive author |sname= Carl Menger}}
* {{ÖBL2|Karl|Menger|1840|1921|title=Menger (von Wolfensgrün), Karl (1840–1921), Nationalökonom|author=H. Abele|author-link=:de:Hanns Abele|volume=6|pages=221–222|ref=none}}
* [https://web.archive.org/web/20051220040945/http://cepa.newschool.edu/het/profiles/menger.htm Profile on Carl Menger] at the History of Economic Thought Website
* [https://web.archive.org/web/20120630172959/http://library.duke.edu/rubenstein/findingaids/menger/ Carl Menger Papers, 1857–1985], Rubenstein Library, Duke University

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{{DEFAULTSORT:Menger, Carl}}
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