The business cycle · Course 2 of 15 · Origins and method
Menger and subjective value
The first Austrian book, read properly. Marginal utility, goods arranged in orders, value running backwards from the consumer, and money nobody decided.
Carl Menger published Grundsatze der Volkswirtschaftslehre in 1871. It appeared in English in 1950 as Principles of Economics, translated by Dingwall and Hoselitz, and that is the edition this course reads. It is a short book and an unusually direct one, and almost everything later in this track is already in it in outline.
Seven lessons, following the book's own order. The first two are about value: the question classical economics could not answer, and the answer Menger and two other economists reached independently in the same few years. The next three are the part that matters most for the rest of the track: goods arranged in orders from the loaf back to the field, value running backwards along that chain from the consumer, and the fact that a chain of orders is also a sequence in time.
The last two are about institutions nobody designed. Menger's account of how money emerges from exchange without anyone deciding is the most famous thing in the book, and the lesson that teaches it also states the objection to it.
No arithmetic beyond a short schedule of successive units. Nothing here is a forecast or a view about any security, and ValueScreener gives no advice.
A theory, not a measurement
Menger and subjective value is 7 lessons on where the school came from and what it claims to be doing. It is a method of reasoning about an economy, argued against its rivals. It produces no figure about any company, and a way of thinking accepted is not a holding of yours examined.
Related
- What the Austrian school is places the tradition before you read its first book, and is the course this one follows.
- Capital, time and interest takes the last idea in this course, that higher order means later, and builds a theory of interest on it.
See our methodology for how the product reads a filing and what it refuses to compute.