Introduction

The Austrian School of economics arose in opposition to the German Historical School; and Carl Menger developed his methodological views in combat with the rival group. I thus wish first to discuss the philosophical doctrines of the Historical School, since this will deepen our comprehension of the contrasting Austrian position.

Next, I shall examine some of the philosophical influences on the founders of the Austrian School, in particular Franz Brentano and his followers. Brentano was the leading Austrian philosopher of the late nineteenth century. He favored a return to Aristotle, and I shall be stressing the Aristotelian roots of the Austrian School.

Eugen Böhm-Bawerk, the second great figure of the Austrian School after Menger, was influenced by a quite different school of philosophy, the nominalists. I shall briefly examine his emphasis on conceptual clarity.

Ludwig von Mises, the greatest twentieth-century Austrian economist, found himself the target of philosophical attack. The logical positivist movement subjected his deductive or praxeological approach to severe scrutiny. The philosophers of the Vienna Circle argued that science was empirical. Deduction cannot give us new knowledge about the world, without the use of non-deductive premises. We shall examine the force of the positivist criticism.

Before beginning the discussion of the Austrians, I think it essential to note that in intellectual history it is normally quite difficult to establish who influenced a particular author. One can very often show parallels between doctrines, but except for special cases, one can usually attain no more than a suggestive hypothesis. If an author states directly that he has been influenced by someone, one of course can go beyond guesswork; but, unfortunately, the thinkers we have here to consider were rarely explicit about their intellectual sources. The account presented below aspires at most to plausibility. No historical interpretation is apodictically true.