Essay Sample on Carl Menger: Economist & Lawyer - 1840-1921

Introduction

Carl Menger was an economist that was born on the 23rd of February in the year 1840 in Poland. His nationality was Austrian. However, he died on the 26th of February in the year 1921. Carl Menger was born with a silver spoon whose father was Anton and the mother, Caroline. The dad's profession was a lawyer, while that of the mother was from a wealthy family. After Carl Menger finished the gymnasium, he later joined Universities of Vienna and Prague, where he undertook the law course (Yeager (1954), p. 237).

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Contribution of Carl Menger to Economics

There are many contributions that Carol Menger brought to the field of economics. The gifts that I am going to discuss in this paper are, first and foremost, he founded the Austrian School of Economics. Secondly, he wrote numerous books, Principles of Economics, Origin of Money, Theory of Value, Carl Menger's Lectures to Crown Prince Rudolf of Austria, Problems of Economics, Investigations into the Method of Social Sciences, with Special Reference to Economics, Foundations of Economic Theory, Der Ubergang Zur Goldwabrung and Die Irrthumer Des Historisms in der doutschen Nationalokonomie. Also, Carl Menger reconstructed the economic theories, that is, the theory of goods, theory of value, and the scope and nature of the economic argument.

Austrian School of Economics

The school was not founded in just a day but went through an evolution in several years. In these years, the wisdom was transferred from one generation to the next. Despite the institution progressing on the knowledge that came from outside origins, the key concepts are still similar. Carl Menger, together with other people, came together to make the Austrian School of Economics. These people are Ludwig Von Mises, Eugen von Bohm-Bawerk, Fredrick Hayek, and these are but a few. In the current times, the Austrian School of Economics is situated across the world and not only in Vienna (Voughn (1998), p. 203).

Over many years the primary concepts of the Austrian institution of economics have produced numerous insights on various economic challenges such as laws of demand and supply, the reason behind inflation, the theory of the creation of money, and the process of the exchange rates. On each of the above challenges, the Austrian School of economics tends to have different views as compared to other economics institutions. In this case, here are some of the differences between the Austrian School of Economics and other institutions.

The first one is thinking about a particular methodology. When it comes to the Austrian School of Economics, they make use of logic, here is where an individual depends on their thinking without referring to the outside sources. Through this, the students can figure out the economic laws of general requests (Shionoya (2000), p. 133). However, it is not the case in other schools such as the neoclassical institution and many others because they use mathematical models and data as evidence of objectivity. The second one is price determination. The Austrian School claims that costs are as a result of subjective factors such as a person's preference whether to purchase an item or not.

On the other hand, the Classical School of Economics claims that the actual costs of production are the factors that influence the price. In contrast, the Neoclassical School price is, as a result, an equilibrium of supply and demand. Thirdly is the capital goods where they claim they are not homogeneous. On the other hand, capital is considered heterogeneous. It further argues that the creation of wrong capital commodities results in severe economic wastes, and due to that, re-adjustments are essential.

The fourth one is interest rates. The Austrian School of economics does not agree with the classical law that claims the interest rates are dependent on the demand and supply of capital but by the personal decisions of people to utilize money in the current moment or the future. In simpler terms, they are a result of the time preference of lenders and borrowers (Menger (1963), p. 33). The fifth one is the effect of inflation. The Austrian School of economics claims that the rise in cash contributes not assisted by a surge in costs, but the prices of the products do not rise simultaneously. The values of certain products may increase at a fast rate than others, which then causes a massive disparity in relative costs of the products.

Putting these aside, the Austrian School of Economics have certain prepositions that they put more concentration. The first one is that only people choose. An individual with plans and purpose is the start of the economic analysis. It is only people who decide and not collective entities (Menger (1990), p. 167). The other use of financial analysis is discovering unintended consequences behind people's choices. The second one is that studying market order entails exchange character and the organizations in which the exchanges happen. Thirdly, the facts concerning social sciences are what individuals think and believe. The other proposition is that prices and utility are subjective. Finally, the cost scheme economizes the data that individuals are supposed to use during decision making.

Books

Principles of Economics

Carl Menger, along with Walras and Jevons, published this book in the year 1871. Their main aim in writing this book being to help and change other economists' ways of viewing price and value theory through the introduction of innovations. As a result of his work on the Principles of Economics, a lot of people from Europe were influenced. Besides, it inspired Friedrich Hayek and Ludwig von Mises's works (Lawson (1996), p. 448). It was this publication that introduced the marginalist insurrection, which rectified conceptual mistakes of the Classical Institution.

These mistakes bothered value speculation, and they had accepted sufficient confusion to form the threatening principles of Marxism look more credible than it was. Menger stepped in to eliminate the fundamental nature of the economic cost and provide a foundation of economics based on the real-life actions of people. According to Mises, it is through this book that he transformed into a real economist.

The most exciting fact is that even after a century, Carl Menger's book has maintained its power when it comes to the relentless logic and its prose. According to students, they claim that it is the best book for an introduction to economics due to its philosophy (Campagnolo (2012), p. 268). Also, the book has contributed to general science; hence it deserves the status of seminal contribution.

Not even a single economist can claim to know about economics if at all he or she has not mastered the argument Menger brings in this book. In the book, Carl Menger expands on his theory by claiming that the marginal usage of commodities is the primary source of their cost and not the input of the labor during their production. It implies that a person's mind is the primary source of economic value. It is from this point that revolution began away from the flawed classical view of economics. Carl Menger, in this book, also covers production, price, wealth, property, and time.

Origin of Money

Due to a different view of people when it comes to cash and its origin, is what influenced Carl Menger to write the book on the source of money. There has always been a phenomenon that started in the old days that took the attention of practical economists and social philosophers. It is undeniable that ordinary intelligence is where the sound is started up by the possessor to exchange for another commodity (Boettke & Lesson (2003), p. 23).

Through Mender's book, he created a foundation for the Austrian School of economics in the world as well as the bedrock for financial conjecture hence laying the ground for people like Hayek, Mises, and Roth bard. It is evident in the first essays that talk about reflective contemplation of a standard exception into our schedules, an interspersed series of dissertations upon the essence and particular qualities of cash in its connection to all that entails traffic.

It is not only the economists that have dealt with the challenge at hand but also the philosophers, historians, and jurists, and the civilized individuals have not equipped its ration to the numerous literature theorem. Also, Carl Menger recognizes the importation of his theory does the elucidation of basic concepts of praxeology and its research methods. Specific authors attempted to elaborate on the origin of money by covenant (Bloch (1940), p. 430).

Through the praxeological method function, according to Carl's book, that it keeps track of all the traces phenomena and consider them to the individual's actions. The historical information on the origin of money is not related to praxeology. The only important thing is that cash and indirect exchange are still in existence because the existing conditions are still present. Asa a result of this, praxeology should not, in any case, result in the hypothesis that the decree of authoritarian caused the exchanging modes.

Problems of Economics and Sociology

The book is in four sections, that is, economics as a theoretical field and its relationship to the Historical and Practical Economic Sciences. The second part is The Historical Point of View in Economic Research. The third section, which mainly talks about sociology, is The Organic Understanding of Social Phenomena and finally The Development of The Idea of a historical Treatment of Political Economy (Alter (1982), p. 150). In this book, Carl Menger is more sensible of the organic analogy that is always abused and used among a "series of structures of social life" and the natural living organisms. Also, he puts into consideration a valuable analogy "for particular purposes of presentation," however, not as a research method.

The most crucial point in this particular book is Carl's explaining the most troubling challenge when it comes to the social sciences. It was a big step for Carl Menger because most sociologists do not put it into consideration, which makes it difficult for them to eradicate the defects in the institutions. It is important because a problem can only be solved when people know where it arose. Also, Menger tends to attack the Baconian empirical induction. His alternative is to ensure that the most comfortable compounds of anything real.

Menger's View of the German Historical School

Carl Menger's methodological views on economics were different from that of the German Historical School. It is because the German historicists focused on the production of accurate investigations of the economic and social conditions. On the other hand, Carl took the case of conventional theoretical economics. Menger was not against their fact of possessing a different historical setup and that such differences were considered. However, he claimed that there was more than one way to understand the financial reality and to create an economic theory (Yeager (1954), p. 235).

Conclusion

Finally, Carl Menger was later awarded a doctorate in the course of jurisprudence from Krakow in the Jagiellonian University. In the year 1860, Carl Menger left school and decided to enjoy a stint as a journalist where he analyzed and reported market news. He performed his journalism in Lemberger Zeitung and later at the Wiener Zeitung in the city of Vienna. In the period that Carl Menger was undertaking a course in the newspaper, he took note of a disparity between his knowledge on the determination of price and the information that the globe believed, especially the market participants. It is at this moment that Carl Menger decided that he is going to bring change in the field of economics.