Kiichiro Yagi. Austrian and German Economic Thought. from Subjectivism to Social Evolution

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Kiichiro Yagi. Austrian and German Economic Thought. From Subjectivism to Social Evolution. London: Routledge. 2011. Pp. 158 + bibliography 159-74 + index. ISBN 978-0-415-55404-6. 80.00[pounds sterling].

Austrian economics today generally starts with yon Mises in the 1920s, and really gets going in the 1930s, by which time Mises and Hayek are writing in English. Carl Menger is treated as the founder of this particular approach to economic reasoning but, as with Mises and Hayek, the perspective is firmly tied to translations of Menger into English. We gain a different perspective, however, if we start at the other end with Menger, and examine both what might be of significance in his work and how this was developed by his immediate students, chief among them being Boehm-Bawerk and yon Wieser. One advantage of this approach is that it becomes possible to make sense of the linkage of Max Weber to the work of Menger. Of course, to appreciate this perspective one has to be able to read German, and also to have a properly historical appreciation of why Austrian economics was in the later nineteenth century such an innovative and productive way of conceiving economic analysis. Kiichiro Yagi fulfils these last two conditions, and presents in the essays collected here the results of textual and archival research of a kind that is very rare in this field.

Ten essays are collected in this volume, most of which were originally published in relatively inaccessible places, with the exception of an important essay that has appeared in the journal, History of Political Economy. The first essay deals with Carl Menger and his brothers, Max and Anton, a deft way of sketching the liberal politics of later nineteenth-century Vienna that formed the backdrop to Menger's own work. The second deals with Carl Menger's journalistic activity in the 1860s, since this is how he made his living before he was appointed to the Economics chair in Vienna in 1873. However, in 1871 he began work on the Wiener Zeitung, a government newspaper and so he also became a state employee with a salary in excess of his professorial contemporaries. Then, in 1875, he was invited to become tutor to Crown Prince Rudolph, lecturing him on economics and statistics throughout 1876 and continuing to work with Rudolph until the latter's sensational suicide at Mayerling in 1889.

On the basis of notebooks that Menger kept in the later 1860s, Yagi is able to reconstruct the way in which Menger first began to sketch out the ideas that he eventually published in 1871 as Grundsditze der Volkswirthschafislehre. This process is elaborated in the third essay, originally published in 1993, using both Menger's notebooks and the annotated copy of Rau's economic textbook from which he started. This textbook, dating originally from the 1820s, was by midcentury the standard point of reference for law students attending the mandatory course in economics. Rau's text was eclectic and diffuse, but it did provide Menger with a link back to the emphasis upon 'needs' and their satisfaction that was the hallmark of the new German political economy of the early 1800s. Yagi demonstrates how Menger latched on to this idea and developed it into the core of an original theoretical approach to economics, which would in the 1880s be represented as hostile to German Historical Economics in general. …