The End of the 19 th Century as the End of Political Economy and the Birth of Economics Peter Boettke Econ 881/Spring January

Classical Liberal Political Economy: Its Propositions, Method and Character Propositions  Self-regulation of the market economy  Harmony of Interests Method  Deductive Logic  Imaginary Constructions Character  Blend of abstract reasoning with British empiricism

The Heir Apparent to Adam Smith J. B. Say  Supply and demand analysis Thomas Malthus  Move away from value and toward “macroeconomic” perversity David Ricardo  re-examination of Smith with an emphasis on the underlying resource constraint and technological possibilities that determine economic values

Mill and the Embodiment of Classical Economics All the problems of value theory have been completed. JS Mill 1848 Ricardianism as the dominant paradigm The presumption and limits of laissez faire  Doctrine of the harmony of interests reconsidered Class conflict Monopoly power malcoordination

Non-Ricardian Economics English Language  Cattalactic school Continental Economics  Older German Historical School Marginal Revolution  Jevons,Walras, Menger  Wicksell  Wicksteed

The Linguistic Importance of the Shift from Political Economy to Economics The battle over the mantle of science  Science = disciplined study  Science = natural science Model and measurement Means/Ends  Pre-positivistic positive analysis The Choice Between Free Floating Abstractions and Momentary Concretes

The Early Austrian Contribution Menger  Subjective utility and choice on the margin  Price formation and orders of production  Constructed and Spontaneous Institutions Bohm-Bawerk  Critique of Marx on the basis of subjective theory of value  Capital and Interest Economic Thought in Epochs Wieser  Opportunity Cost  Natural Economy

Vienna at the Turn of the Century Clusters and Intellectual Moments  Philosophy and Mathematics Red Vienna,  Ideology Socialism  Philosophy Positivism  Science Unity

Interwar Austrian Economics Menger (1921), Bohm-Bawerk (1914), Wieser (1926) Mises’s Seminar  Bohm-Bawerk’s seminar Mises, Bauer, Neurath  Mises’s students Hayek, Machlup, Morgenstern, Haberler, etc.  Sennholz, Rothbard, Kirzner Mises propositions  Economic Science is a priorism Action axiom  Monetary calculation Private property  Monetary theory of the trade cycle Non-neutrality and intertemporal coordination  Harmony of Interests Ricardo’s law of association