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The theory of monopoly price was originally formulated by Carl Menger at the inception of the marginalist revolution in 1871 and represented the dominant theoretical approach to monopoly until the 1930s. Despite its impeccable doctrinal pedigree and lengthy dominance, the theory abruptly disappeared from the mainstream neoclassical literature after the Monopolistic Competition Revolution, to be revived and reformulated after World War II by Ludwig von Mises. The present paper describes the theory as it was offered in its most sophisticated pre‐war form by American economist Vernon A. Mund, who published an unjustifiably neglected volume on monopoly theory that appeared in the same year as the classic works by Joan Robinson and Edward Chamberlain. This paper then attempts to draw out the critical implications of Mund’s formulation of the theory for the current neoclassical orthodoxy in monopoly and competition theory, including the elasticity of demand curves facing individual producers under competition, the time perspectives that are most relevant in analyzing the pricing process, the proper role of long‐run equilibrium in this analysis, and the misapplication of the marginal revenue and marginal cost concepts. Finally, the paper suggests a number of reasons why the theory was swept aside in the aftermath of the Chamberlain/Robinson Revolution with almost no resistance from its most prominent exponents.

Friedrich Hayek, Ludwig von Mises, Ludwig Lachmann and George Shackle upheld that investigations of the causes of purposes, preferences, beliefs or behaviors by the social scientist were unwarranted. Shackle proposed that human agency is an “uncaused cause.” Others admitted that human volitions and actions are caused, but ruled out explanations of these causes from social science. By considering Darwinian insights from modern evolutionary psychology, this essay criticizes the view that causal investigations of human volitions and actions are beyond social science. These insights also point to the role of habit and instinct in human behavior.

The aim of this paper is to show that there is need for revitalization of the normative branch of political economy. The first part of this paper will deal with some methodological reservations against a participation of economists in a rational discussion of normative issues. The second and third parts will outline the approaches and problems of two unconventional schools of thought in present‐day economics which make attempts to strive for a reconciliation of positive and normative economics.

This essay offers a review of von Mises’ classic Nation, State and Economy(1919). It focuses specifically on the contexts of liberty, the issue of language and nation.

In this work, I deal – based on my memories and reflections on Lachmann’s teaching and the ideas that I discussed with him as my dissertation supervisor and member of his weekly departmental seminar – with the following two topics: first, what Lachmann understood by his subjectivist approach to economics and some of its consequences, including the use of the concept of equilibrium in economics; and second, my understanding of Lachmann’s intellectual relationship with Schumpeter. The work also raises questions about the absence in Lachmann’s work of an examination of the role of innovation in the economic process that he analyzed.

The papers collected here were written for the second biennial Wirth conference on Austrian Economics. The Wirth Institute for Austrian and Central European Studies sponsored the conference in cooperation with the University of Toronto in Mississauga. The conference was held from 17 to 18 October 2008 in Mississauga. The Wirth Institute has a natural home in Edmonton on the campus of the University of Alberta, which is a leading center for Central European Studies. The fact that the Institute has received support not only from government of Austria, but also from the governments of the Czech Republic, Hungary, Poland, Slovakia, and Slovenia reflects its historically minded recognition of the unique intellectual milieu of the Habsburg Empire. This intellectual milieu lasted beyond the breakup of the empire right through to the Anschluss in 1938. It is this milieu that shaped the Austrian school of economics and helped shape the context for the conference.

Hayek favored both classical hermeneutics and science. His scientific reasoning shows the logical necessity of methodological dualism. Bruce Caldwell and Viktor Vanberg oppose hermeneutics and methodological dualism in favor of science. Their arguments depend on inappropriate interpretations of the doctrine of methodological dualism and an impoverished understanding of hermeneutics that fails to distinguish classical hermeneutics from universal hermeneutics. Hayek showed that “scientific” and “humanistic” approaches to social science can and should be compatible and complementary. Opposing (classical) hermeneutics in favor of science may cause a loss of knowledge by tending to deprive “scientific” social science of insights arising from more “humanistic” traditions.

Menger′s Grundsätze is explored; the Aristotelian background of the discourse is probed, as is the problematic image of Menger sketched in the secondary literature as soon as it is confronted with this Aristotelanism and with the subjective value theory and the motif of time, error and uncertainty. The conflicting elements of this picture are pieced together.

When understood as an inevitable inconsistency of individual plans, disequilibrium is not only a necessary condition for the existence, and hence understanding, of the market process as we know it, it is also the glue connecting three other “Austrian” themes. In equilibrium heterogeneity of resources would have no strategic significance, specific and private knowledge would be much less problematic, and no profits net of contractual rent payments would be earned. In the real world of disequilibrium firm differences are not a mystery, rent is not an indication of inefficiency or monopoly power, and there is room to analyze, admire, reward, and consult about successful business strategy. Rent appropriation comes from ownership of valuable resources. And a successful strategy, one that earns enhanced rents, is one that acquires ownership of valuable and value-creating resources. Such a strategy is dependent for its success on superior vision (or luck), something which cannot exist in equilibrium.