Austrian School of Economics


The school of economics that describes the true behavior of markets.

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

Henry Hazlitt
Economics in One Lesson

The Austrian School of Economics espouses principles and theories of economics based upon deduction from the nature of human action, especially stressing the subjective nature of value.

The Austrian School of Economics consist of a group of economists who developed the modern subjective theory of value and applied it to the various problems of economics. Its founders and early leaders Carl Menger (1840-1921), Friedrich von Wieser (1851-1926), and Eugen von Böhm-Bawerk (1851-1914), as well as Ludwig von Mises (1881-1973) and Friedrich A. Hayek (1899- )were all Austrian born. American Murray N. Rothbard also contributed to this body of work.

The principles and theories of the Austrian School of Economics, along with its methodology. provide the foundation for the economic assumptions advocated on The Free Market Center.


Austrian Methodology

In addition to clear economic theory, one needs to apply that theory on a consistent basis. For that reason we have adopted the methodology of the Austrian school.

Characteristics of the Austrian School

I will discuss the characteristics of Austrian economics that make it different from other schools of economics. These eight characteristics markedly distinguish the Austrian School from other popular schools.

Praxeology

The word praxeology refers to the systematic study of purposeful human action. Praxeology provided a foundational concept in the theories developed by Ludwig von Mises.

Deductive Reasoning

Deductive reasoning, used in the Austrian Methodology, leads from true principles (or axioms) to true conclusions. (See description in Deductive Logic.)

Subjective Value Theory

… economic value is not an inherent property of a good, but determined by the preferences of those who wish to acquire the good. (See description in Value Theory.)

Carl Menger

Carl Menger -
The Father of The Austrian School of Economics