Review of Austrian Economics - The Ludwig von Mises Institute

68 The Review of Austrian Economics, Vol. 5, No. 1
impugned in Streissler's revealing analysis of Menger's contribution.
Streissler (1972, pp. 429, 430) suggests that Menger's followers in the
Austrian tradition, including Wieser, progressively "escaped" their
master over time and "assimilated other traditions" with the consequence
that "much of what was genuinely Menger's tradition got
lost." 5
It has been said of Wieser that he "occupies a position of indisputable
importance in the history of economics" and that he "presented
one of the best theories of capital which had emerged" in his time
(Stigler 1941, pp. 158, 177). 6 Yet Wieser's (1889) theory of capital and
interest which is later enunciated and extended in Wieser (1891 and
1914) is mostly still unappreciated in the literature. 7 Instead, there
has been extensive analysis of the putative apotheosis of "Austrian"
capital and interest theory provided originally by Bohm-Bawerk in
1888 and as later refined by Wicksell (e.g., Kregel, 1976, pp. 28-33;
Blaug 1978, pp. 498-569; Brems 1988). As well, Streissler (1972, pp.
434-36) concentrates exclusively on those elements in Bohm-
Bawerk's capital and interest theory which possibly displeased Menger.
To anticipate one of our conclusions, Streissler leaves out of
account Menger's probable sympathy for Wieser's formulations of the
capital and interest problem. 8
Accordingly, in this article we give special consideration to
Wieser's much-neglected capital and interest theory in order to assess
its origins and composition, and ultimately to estimate the extent of
Wieser's departure from the Menger tradition. We compare, as and
where the detail of our exposition demands, Wieser's theory of capital
and interest with other contemporary Austrian and non-Austrian
treatments of that subject. Our attention will also be focused on the
relations between Wieser's theory and the broad directions given by
Menger for the construction of an adequate theory of capital and
interest—a theory which, regrettably, Menger (1888 and 1950) left
very much inchoate.
5 An example, as Streissler and Weber (1973, p. 227 4n) explain, is Menger's
monetary theory for which Wieser, when rewriting Menger's article on "Money" for the
Handworterbuch der Staatswissenschaften substituted an entirely different version.
6 Cf. Knight (1950, p. 31), who praises Wieser's capital theory, regarding it as
"sounder" than both Menger's and Bohm-Bawerk's views on the subject. Knight (1935,
p. 158) also pays tribute to Wieser's theory of interest.
7 Two exceptions in recent literature are Rothschild (1973) and Streissler (1987)
which touch tangentially on matters of concern in this article.
8 To be sure, Streissler and Weber (1973, p. 229) allude, all too briefly, to one crucial
theoretical point of separation between Menger and Wieser: Menger's 'Vision of production
was a time consuming multi-stage process—an approach that did not appeal
to Wieser."