Carl Menger’s Free Market Advice to an Austrian Crown Prince

Carl Menger’s Free Market Advice to an Austrian Crown Prince

Imagine that you could be the tutor to a future king. What lessons and advice would you offer for the economic policies he should follow when he assumed the throne? That is what Carl Menger, founder of the Austrian School of Economics, was able to do in a series of private lectures that he delivered to Crown Prince Rudolf, the heir-apparent to the Austrian Hapsburg Empire in 1876.

Five years earlier, in 1871, Menger had published his now famous book, Grundsätze der Volkswirtschaftslehre (Principles of Economics), in which he challenged the labor theory of value of the classical economists, replacing it with the theory of subjective value and marginal utility. Goods do not receive their value from the quantity of labor that goes into their manufacture. Rather, it is because we value having and using some desired good…

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