Review of Austrian Economics - The Ludwig von Mises Institute

Austrian Capital and Interest
Theory: Wieser's Contribution
and the Menger Tradition
A. M. Endres*
Doctrinal investigation has now established that fundamental
theoretical points of divergence separated the founder of the
Austrian economics tradition, Carl Menger, and another
leading Austrian economist, Eugen von Bohm-Bawerk. Bohm-
Bawerk's capital and interest theory, in particular, stressed a degree
of classical materiality and adopted a level of aggregation sharply in
conflict with the basis of Menger's contribution (Endres 1987). As
Streissler and Weber (1973, p. 231) speculate: "Bohm-Bawerk's Menger
cannot be the whole Menger." Menger's successor in the chair of
economics in Vienna was Friedrich Wieser. 1 On the occasion of the
centenary of one of Wieser's principal contributions to economic
theory—Natural Value (1889)—the time seems apposite to assess
whether, and to what extent, the economic-theoretic legacy of Carl
Menger endured in Wieser's work. 2 Standard renditions of early
Austrian economics in history of economic thought textbooks usually
suggest that Wieser's work can be placed squarely in the Menger
tradition. 3 Indeed, going from Wieser's (1923) biographical account of
Menger and from Wieser's (1891) survey of Austrian value theory, we
should not be led to suspect otherwise. 4 However, Wieser's place in
furthering the tradition of economic theory begun by Menger is
*A. M. Endres is senior lecturer of economics at the University of Auckland, New
Zealand.
For two recent general appreciations of Wieser and his work see Streissler 1986
and 1987.
2 Wieser 1889 was an elaboration and refinement of Wieser 1884. The latter is
well-known for introducing the equi-marginal principle into the theory of production
and for its subjective cost theory.
3 For example, Hutchison (1953, p. 153) argues that Wieser (1889) bears "strong
family resemblances to Menger's Grundsatze." Rothschild (1973, p. 209) is of the view
that "Wieser built on his [Menger's] foundations."
See also the "Preface" in Wieser (1889, especially pp. xxxiv-xxxv).
The Review of Austrian Economics, Vol. 5, No. 1 (1991): 67-90
ISSN 0889-3047
67