Carl Menger and His Legacy in Economics.

This book contains an impressive range of high quality studies on the development of the Austrian tradition in economics in general and on Carl Menger's role in particular. The articles are the result of a conference held at Duke, to commemorate the donation of Menger's papers by his granddaughter, Eve Menger. The contributions center around four topics: origins and economic policy, successors, methodology and general themes. Erich Streissler deals with die influence of German economics on the work of Menger and with Menger's vision on economic policy. The cameralist roots of Menger are discussed by Paul Silverman. Israel Kirzner underlines Menger's originality with respect to his perspective on the economic systems as a whole: "the overall vision of the economy as a system driven entirely and independently by the choices and valuations of consumers - with these valuations transmitted "upwards" through the system to "goods of higher order," determining how these scarce higher-order goods are allocated among industries and how they are valued and remunerated as part of a single consumer-driven process - was one which Menger surely (and correctly) sensed as being wholly new."

The second part starts with an essay by Roger Garrison on Austrian capital theory. The reader enjoys a fine discussion of Bohm-Bawerk's analysis against the background of Menger's subjectivism. Denis O'Brien provides us with an interesting discussion of the Austrian connection in Robbins' work. As Mark Blaug puts it in his comment: "Robbins was throughout all the interwar years the greatest and indeed the only Austrian economist outside Austria, having neither trained nor taught in Austria." Jeremy Shearmur would like to see a more powerful theory of welfare in order to do justice to Mises's and Hayek's arguments for markets, but it remains unclear what kind of welfare theory he exactly has in mind. The part on methodology contains articles by Karl Milford, Jack Birner, Barry Smith and Uskali Miki on Menger's methodology. In his introduction the editor refers to substantial debate at the conference on the Popperian, Aristotelian and realist investigations of Menger's methodology and he considers it a tribute to Menger that his work is sufficiently rich to support a diversity of approaches.

Max Alter's contribution on Carl Menger's economics already gives rise to a Menger debate. He points out that without Menger there would have been no Austrian school of economics. In his words: ". . . methodological individualism, subjectivism, unintended consequences of human action uncertainty, ignorance, the quest for information, micro analysis, valuation at the margin, rejection of mathematics, all derive from the Grundsatze of 1871." However, he claims that Menger's methodology is untenable and that his price theory suffers from a transformation problem from value to prices. Both claims are elaborated in more detail in Alter's recent book [1). In the present volume Larry White rebuts Alter's claims point for point. There is a short paper by Don Lavoie, "Understanding Differently: Hermeneutics and the Spontaneous Order of Communicative Processes," and a closing contribution by Karen Vaughn on the Mengerian roots of the Austrian revival. For the younger generation of economists Vaughn's piece is fascinating reading.

I can only but recommend that both students of the history of economic thought and of modern economics to take notice of this important set of essays on one of the founders of present-day economics.

Reference

[1.] Alter, Max. Carl Menger and the Origins of Austrian Economics. Boulder: Westview Press, 1990.