Friedrich Von Wieser - Biography

Biography

Born in Vienna on July 10, 1851, Friedrich von Wieser spent his childhood and adolescence in the same city. He was interested since youth in law, history, and sociology. He studied law at the University of Vienna beginning in 1868. His lifelong passion for Political Economics was first ignited when he read Herbert Spencer's Einleitung in das Studium der Soziologie (Introduction to the Study of Sociology).

In 1875 Wieser, after ten years of public service as a government employee, was awarded a scholarship to the University of Heidelberg, Germany, in order to study Political Economics with Eugen von Böhm-Bawerk, a friend from his youth who later became his brother-in-law. Both men were disciples of Carl Menger, Wieser's senior by 11 years. Although neither Wieser nor Böhm-Bawerk studied under Menger directly, they were greatly influenced by reading Menger's Grundsätze der Volkswirtschaftslehre (Principles of Economics) (1871), which was the work that had initially inspired the two men to study Political Economics. The three are considered the first generation of the Austrian School of Economics.

After a successful postdoctoral habilitation in 1884, Über den Ursprung und die Hauptgesetze des wirthschaftlichen Werthes (On the Origin and the Main Laws of the Value of the Factors), a prelude to his value theory, Dr. Wieser was named that same year as an associate professor at Charles University in Prague, where he stayed until 1903 when he succeeded Carl Menger at the University of Vienna.

In 1889 he was named ordentlicher Professor ("ordinary professor") at the University of Saint Charles. That same year, he also published his Der natürliche Wert (Natural Value), with which he initiated the debate on the value of factors of production, and from which are derived two of his major contributions: his Value Theory and the related imputation theory.

Motivated by introducing the innovations of the Austrian School, in 1891 he published Die österreichische Schule und die Theorie Wert (The Austrian School and the Theory of value) and in 1892 Die Wert Theorie (The Value Theory). Later, he collaborated in other notable works, such as Die economic Wiederaufnahme Barzahlungen der in Österreich-Ungarn (Resumption of payments species in Austria-Hungary) in 1893 and Die Theorie der städtische Grundrente (Theory of urban land rents) in 1909. He also served as editor for two articles in the Palgrave Dictionary of Economics: "Die österreichische Schule der Wirtschaft" ("The Austrian School of Economics"), and "Böhm-Bawerk", both in 1884.

In 1903, Wieser was awarded a chair at his alma mater, the University of Vienna, as a full professor, where he taught a new generation of outstanding economists, including Ludwig von Mises, Joseph Alois Schumpeter, and his most faithful disciple, Friedrich August von Hayek. He developed a monetary theory inspired by the research of Carl Menger, and he applied himself during the following years to the problems of the quantity theory of money. In his last 25 years he dedicated himself to sociology, which he believed must go hand-in-hand with economics for the fullest understanding of human society. By combining these disciplines he was able to forge a new vision of economic policy.

In 1911, he published Das Wesen und der Hauptinhalt der theoretischen Nationalokonomie (The nature and content of theoretical economics major national), which preceded yet another major contribution: alternative cost (or opportunity cost) theory, which was drawn from his study Theorie der gesellschaftlichen Wirtschaft (Theory of social economy), published in 1914. It was here that he first coined the term opportunity cost.

Also attributed to him is the creation of the term marginal utility (Grenznutzen), due largely to the influence of Léon Walras and Vilfredo Pareto, both of the Lausanne School. This has led some scholars to not consider his later works as belonging to the Austrian School. Even Ludwig von Mises, his disciple, said in his autobiography, Memoirs (1978), that Wieser had misunderstood the gist of the subjectivism of the Austrian School and was actually a member of the Lausanne School. But in both he also presents a clear methodological individualism and a rejection of historicism of the German school, so at first blush it is difficult to justify his exclusion from the Austrian School.

In 1914, Eugen von Böhm-Bawerk died, thus marking the end of a lifelong friendship and striking a hard blow to Wieser.

In 1917 Wieser was named a member of the Austrian House of Lords and granted the title of Baron. He was also appointed Minister of Commerce in the Austrian Cabinet, which post he held until the end of the First World War in 1918. However, his activity was hindered by Richard Riedl, Energy Minister and clear proponent of economic interventionism, leaving only matters of secondary importance to Wieser's jurisdiction.

His last works were Das geschichtliche Werk der Gewalt (The History of State Power) in 1923 and, in 1926, an impressive sociological study titled Das Gesetz der Macht (The Law of Power).

Friedrich von Wieser died on July 22, 1926 in Salzburg, where he is buried. Two of his hitherto unpublished works were published posthumously: Geld (Money) in 1927, which summarizes his monetary theory, and Gesammelte Abhandlungen (Collected Papers) in 1929. This latter book included a tribute resulting from the collaboration of renowned economists like Knut Wicksell, but it was censored during the Second World War.