Achievements
Friedrich von Wieser's most famous contributions are the Imputation Theory drawn from his 1889 work Der natürliche Wert (Natural Value) and the Alternative Cost (or Opportunity Cost) Theory drawn from his 1914 work Theorie der gesellschaftlichen Wirtschaft (Social Economics) in which he coined the term opportunity cost. He is credited with the economic distinction between public goods and private goods subsequently used by Friedrich August von Hayek and eight of his disciples, and with developing the concept of marginal utility (Grenznutzen).
Wieser also stressed the importance of the entrepreneur to economic change, which he saw as being caused by "the heroic intervention of individual men who appear as leaders at new economic frontiers." This idea of management was later expounded upon by Joseph Alois Schumpeter in his treatment of economic innovation. Value theory was revolutionary because it opened the debate on the question of economic value, introducing an objective calculation to a subjective theory. It was one of the first mathematical solutions to the problem of determining prices for factors of production. His imputation theory amended possible errors in the theory of his teacher, Carl Menger, and is still used today in Microeconomics in consumer research to calculate the systematic replacement of factors of production.
Another of Wieser's fundamental contributions to Economics is the Alternative Cost Theory (now called the Opportunity Cost Theory), which had been ignored by Alfred Marshall and British economists. Based on the work of Pareto, Wieser created the concepts of marginal utility and opportunity cost, which led economists to the study and analysis of scarcity and the allocation of scarce resources.
Wieser thus perfected the theory of Carl Menger by introducing a definition of cost, the opportunity cost, compatible with the theory of marginal utility. He also used Menger's monetary theory from which he devised his own monetary theory presenting a study of possible influences on monetary value that can change the relationships between natural and monetary economics.
But the most important of his contributions is that, thanks to his familiarity with Sociology, he combined the Austrian theory of utility with an evolutionary theory of institutions offering solutions to the paradox between private property and the maximization of utility. Wieser said that idealized classical and neoclassical models neglect basic concepts such as the possibility of monopolies and the existence of economies of scale. Wieser claimed that idealized, refined, and self-contained models may be useful tools for economic policy, resulting therefore in a suboptimal solution. Also, he posited the concept of Social Economy (gesellschaftliche Wirtschaft), which he brilliantly produced in his treatise Theorie der Wirtschaft gesellschaftliche (Theory of Social Economy), using the performance of intervention in certain cases as a benchmark to assess policy effectiveness.
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Famous quotes containing the word achievements:
“Freedom of enterprise was from the beginning not altogether a blessing. As the liberty to work or to starve, it spelled toil, insecurity, and fear for the vast majority of the population. If the individual were no longer compelled to prove himself on the market, as a free economic subject, the disappearance of this freedom would be one of the greatest achievements of civilization.”
—Herbert Marcuse (1898–1979)
“When science, art, literature, and philosophy are simply the manifestation of personality, they are on a level where glorious and dazzling achievements are possible, which can make a man’s name live for thousands of years. But above this level, far above, separated by an abyss, is the level where the highest things are achieved. These things are essentially anonymous.”
—Simone Weil (1909–1943)
“Our achievements speak for themselves. What we have to keep track of are our failures, discouragements, and doubts. We tend to forget the past difficulties, the many false starts, and the painful groping. We see our past achievements as the end result of a clean forward thrust, and our present difficulties as signs of decline and decay.”
—Eric Hoffer (1902–1983)