The Essential Austrian Economics

by Christopher J. Coyne, Peter J. Boettke

The origin of the Austrian School of economics is the publication of Carl Menger’s Principles of Economics in 1871. Menger, William Stanley Jevons, and Léon Walras are considered the co-founders of the “marginal revolution” in economics, a shift to the marginal utility theory of value from the labour theory of value. The revolutionists argued that value is not based on the amount of labour expended but reflects how useful people perceive the commodity to be in satisfying their ends. This revolution had radical implications for the way economists understood the consumer valuations, and not the amount of effort, is what determines prices. But what determines consumer valuations? This question had long perplexed social scientists. Why do consumers value diamonds, a luxury item, more than water, an essential for life? By introducing the concept of marginal utility, Menger and his co-revolutionaries were able to resolve this paradox. The labour theory of value, however, was not Menger’s only target in his Principles. He was also engaging the German Historical School, which held that economic science is incapable of producing universal principles. In contrast, Menger, using marginal utility analysis as a foundation, argued that universal economic laws do apply across time and geographic space. Those in the German Historical School took issue with the claims by Menger and his colleagues about the possibility of universal theory and labeled them the “Austrian School” because they taught at the University of Vienna. Subsequent generations of scholars have developed the insights of the Austrian School. The purpose of this book is to present an overview of the key tenets of Austrian economics by synthesizing the insights from these thinkers in a set of eight topics that capture the core elements of Austrian economics.

Genres: Economics, History

68 pages, Kindle Edition

Published December 2, 2020

About the author

Christopher J. Coyne is Associate Professor of Economics at George Mason University and Associate Director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center. He is the author of Doing Bad by Doing Good: Why Humanitarian Action Fails (Stanford, 2013) and After War: The Political Economy of Exporting Democracy (Stanford, 2008).

Reviews

[T · Rating 2 out of 5]

"From the perspective of economics as a science, the ethical content of the ends is irellevant as is the personal ethical or political positions of the economic analysis" (9)

Decent summation of Austrian thought, but this short volume lacks a focus on contemporary economics, seldom mentions it's differences with other economic theories (other than the German Historical School), and hasn't a single line which is self critical. However, the further reading guide is useful for delving into Austrian theory, and the main theoretical bullet points of Austrian theory (methodological individualism and focus on subjectivity, influence of Weberian sociology and logic, the importance of heterogenous forms of capital, the Economic Calculation Problem, Marginal Utility, the importance of the entrepreneur etc) are good knowledge top ups or entry level explanations of the key contributions of the Austrians ...

[Pedro Almeida Jorge · Rating 4 out of 5]

A very useful introduction to Austrian Economics. It is very short but still covers a good deal of relevant topics. It is not just for beginners. The writing is fairly erudite and scholarly. Provides good suggestions for further reading at the end, but I suspect many of the books listed are not for the general reader's wallet. The nerd in me had some minor quibbles with some historical details, and I also think that a somewhat more comprehensive explanation of how we proceed from marginal valuations to the prices on the market would have been appropriate - nevertheless, the book thoroughly emphasizes the informative, signalling role of prices, their role as providing the right incentives to consumers and entrepreneurs, their role in possibilitating economic calculation and the solution to the famous "diamond-water" paradox is explained in its historical context.

[Rafael Ramirez · Rating 5 out of 5]

Excelente introducción a la escuela Austriaca de economía. Resumen muy fácil de seguir y de entender sobre las principales contribuciones de esta escuela al desarrollo de la teoría económica. Puede ser también muy útil para cualquiera que quiera entender mejor los fenómenos económicos, aunque no tenga ningún estudio previo sobre el tema.

Entre otras, dos de las principales aportaciones de los economistas austriacos que vale la pena conocer (y que sirven como correctivo a una concepción muy extendida de la ciencia económica como una versión glorificada de la contabilidad) son su enfoque de estudio en la toma de decisiones individuales ("individualismo metodológico"), no en los grandes agregados estadísticos, y su énfasis en tratar de entender las razones o causas de los fenómenos económicos observados a través del uso de la lógica, no solo dedicarse a recitar ríos de cifras y estadísticas que pueden describir a la economía, más no ayudan a entenderla. Como ejemplo, ahora que la inflación vuelve a ser un problema extendido, el enfoque austriaco nos ayuda a entender qué causa la inflación (y por tanto, cómo controlarla) y no solo explicar que la inflación sube "porque" subieron los precios de x, y o z de los componentes del índice (que es lo que hace la mayoría de los analistas), lo que puede ser matemáticamente correcto pero sirve de poco o nada.

Leer este libro me hizo recordar una conversación reciente con un alumno que me decía que había estudiado algo de economía en la universidad pero que no le había servido de nada, fue solo una materia más, árida y abstracta; recientemente había descubierto a los austríacos y muchas de las cosas que observaba en la economía y en su propio negocio comenzaban a tener sentido y se preguntaba porqué nadie le habló en su momento de Mises o Hayek. ¡Ojalá muchos tengan la misma experiencia al leer este libro!

[Ostap · Rating 3 out of 5]

I've found abut the Austrian economics in the beginning of 2007 and since then I've read a lot of articles and several books about its various aspects. But I never read a treatise that gives a comprehensive picture of the Austrian economic as a whole. That's why I decided to read this book in a hope that I would find there something new.
Indeed, I did. Somehow I never heard of the Lachmann's theory of heterogeneous capital. I have to thank this book for informing me of it.
Other than that it wasn't worth it.
I can't understand who this book is for. It's not The Essential Austrian Economics for Dummies - its language it too scholarly to keep novice readers' interest. It's not The Essential Austrian Economics for Economists - it's too basic for that. It's a book for dummies written as if it were a book for economists. Although, even books for economists should be clear and fluid. This one is not.

People who have some knowledge of economic theory should better find another, more comprehensive (and preferably more clearly written) introduction to the Austrian economic theory. That's what I will do.

People who know nothing of economics should better start with The Economic Way of Thinking by Paul Heyne or Economics in One Lesson by Henry Hazzlitt. They deliver the same basic points in much more entertaining and comprehensible way.

[Y · Rating 4 out of 5]

A clear and concise presentation of key themes in Austrian economics with very useful lists of further readings for the beginner, intermediate and advanced student.
Available online for free from Fraser Institute.

[Pedro Angelico · Rating 5 out of 5]

So far, this is the best Essential scholar series book I've read.
Great summary on the foundation of Austrian Economics.

[Dody Eid · Rating 4 out of 5]

A nice summary of Austrian economics. I highly recommend to anyone vaguely interested in economics :)

[Michael Wu · Rating 4 out of 5]

Superb introduction to major themes in Austrian economics (economic calculation, market process, spontaneous order, problems with interventionism etc.). A very easy and short read. Highly recommend. Get it for free here: https://www.essentialscholars.org/aus...

[Yuvi · Rating 5 out of 5]

Fantastic!

[Pete · Rating 4 out of 5]

The Essential Austrian Economics (2020) by Christopher Coyne and Peter Boettke is an impressively short, free priced or low priced guide to Austrian Economics. Coyne and Boettke are both economics professors at George Mason University. At 44 pages the book is very short.

There are chapters on The History of Austrian Economics, Methodological Principles, Economic Calculation, Capital and the Structure of Markets, The Market Process, Spontaneous Order, Interventionism, The Business Cycle, Planning and Austrian Economics yesterday and today.

Despite the shortness of the book it really does go into ideas about Austrian Economics rapidly and well. The importance of the ‘marginal revolution’ determining value rather than value being derived from the inputs or labour required to make something is well expounded.

The way that Austrian economics makes central the idea of limited and often subjective knowledge is really well done over multiple chapters. The importance and qualities of spontaneous order are also done well.

Austrian business cycle theory seems weaker and is harder to understand than previous points. The chapters on Intervention and Planning underline the problems with government regulation in a world where knowledge is highly distributed.

The Essential Austrian Economics is a really good introduction to Austrian Economics. It’s a great start for anyone wanting to learn more about a unique school of economics.

[Barry Linetsky · Rating 5 out of 5]

I thought this was an excellent overview of many of the key distinguishing concepts of the Austrian School. Very clearly written in concise and relatively short subject chapters. You can get through it in a couple of hours, so I suggest the ebook version if you have that option. I read about half of it on the kindle phone app.

[Arthur Bitar · Rating 3 out of 5]

Basiquinho.

[Samuel Melo · Rating 4 out of 5]

Quick reference book

Excellent source material list for beginner, intermediates and advanced readers.

Main topics of the school mentioned and explempified very pedagogically.

[Lucille Nguyen · Rating 3 out of 5]

Quick summary of the broad brushes of modern Austrian Economic thought. Is a bit too light on addressing critics of the school.

[Angelo · Rating 5 out of 5]

A good read.

Well written and a comprehensive overview of Austrian Economics. In some ways it is eye-opening in its application to the state of our present economy

[Snorri Stefánsson · Rating 2 out of 5]

Clear and concise

[Bookworm · Rating 5 out of 5]

This is a very good introduction into Austrian economics, easy to understand even for those who are not economists.

[Drew · Rating 3 out of 5]

A bretty good summary. Never read such a concise and accurate summary of Austrian business cycle theory.

(The text on the back mislabels the men on the front.)

[David Besly · Rating 4 out of 5]

Clear presentation of Austrian Economics

This book provides a clear presentation of the history and principles of Austrian economics for the lay reader. The examples are understandable and work together to show why socialism has never succeeded.