Foreword

Yet in certain respects a comparison 'with Mill does less than jus tice to Wieser. Social Economics is the first systematic treatise upon economic theory at large produced by the Austrian School, whereas several attempts to cover the field of classical theory had been made before Mill wrote. Wieser's economie work is also more original than Mill's. His own early writings ranlt: higher among the constructive contributions which he weaves into a balanced exposition than do Mill's Essays upon some Unsettled IQuestions of Political Economy. More than that, in deepening and broadening his earlier discussions, Wieser reveals again the thoroughness, vigor, and originality for which he has always been notable. ]\fiU wrote his Principles at high speed to round out his social philosophy. Even in later editions he did not incorporate all the changes 'which he admitted were desirable in the classical doctrines. Wieser, on the. contrary, brought his full power to bear upon his treatise. It is the fruition ofa lifetime's reflection as well as the crowning achievement of a famous school.

In his Gymnasium days, von Wieser had been fascinated by Homer, Virgil, the Niebelungenlied,. and by history which followed epic tradi tions. He dreamed of becoming an historian. But he came from one of the aristocratic Viennese families whose sons commonly enter the public service, and the path to public service was the law. While fol lowing this path at the University, he chanced upon Herbert Spen cer's early writings on sociology, and was fired with a new ambition. Spencer '8 logic convinced him for the time that the "great-man theory" of history is an illusion; it is the culture of a people which ix SOCIAL ECONOMICS produces the hero. Therefore, to understand history one must un derstand society first. The aspect of social relations most open to un derstanding is the economic aspect. And the central problem of eco nomic life is the problem of value. So the young jurist concentrated upon the economic courses of the law curriculum, and began to ponde!

the problem which he was later to illuminate. Carl Menger had published his Grunds·iitze der V olks'wirtschafts lehre in 1871, and been appointed to a professorship at Vienna . in 1873. .Von Wieser did not attend Menger's lectures, but he found in Menger's book the clues he needed. After taking a law degree in 1875, he and his. friend Eugen von Bohm-Btawerk spent two years at the Universities of Heidelberg, Leipzig and Jena. While at Heidel berg in the spring of 1876, the two Austrians presented reports to KarIKnies'seminar. One report dealt with "The Relation of Cost to Value," the other report with .the theory of··interest. At the next opportunity, Wieser showed his manuscript to Menger, and was en couraged to seek a· university· career. On returning to Vienna from his German studies, the young econo mist received an appointment-in the Tax Administration. .In 1883 he became Privatdozent at the University. Next year he published the book expected from aspirants to an academic chair, Ursprung tt·nd Hauptgesetze deswiJrtsckaftlichenWerthes" and was soon made professor in the German University of· Prague. In this first book, von Wieser analyzed a valuation made apart from others by a single person,. but a person who represents the population of a mod ern nation. In his second book, Der naturlicke Werth, he attempted "to exhaust the entire sphere of the phenomena of value· without any exception. " The analytic power here revealed ranked the writer with Menger and Bohm-Bawerkas one of the three masters of the Austrian school. When Professor William Smart was introducing the Austrian theory to English-speaking economists, he chose Wieser's Natural Value for translation in preference to Menger's Grundsiitze.

So far von Wieser had concentrated his scientific effort· upon one central problem. After the publication of Der naturliche Wertk in 1889, he turned to questions of money, public finance, politics, and sociology. In. 1903 he left his chair inPtague ·to become professor of economics in Vienna. He also served for a while as Minister of Commerce. During the twenty-five years following 1889, his pub lications dealt mainly with detailed problems; but all this time he was quietly. developing and maturing his thoughts upon e'conomic theory at lar.~e, and upon his·still ·earlier .problem of the· relations between society and its leaders. Always critical of his own work, he seldom S OC I ALE. CON 0 M I C S xi offered it to the public except~nderpressure. But what he had al ready accomplished made' it sure that pressure would be applied by those who felt concern"for the development of social science. When the new Grundriss der Sozialokonomik was planned, Max Weber, who had. a leading share in the direction, made it a· condition of his own participation that von Wieser should provide the chief section upon economic theory. Reluctantly Wieser consented. He spent some three years in perfecting further the system. on··which' he had been working so long, and it appeared in 1914 under the title Theorie d,er gesell schaft lichen W irtschaft.

Under ordinary circumstances, the publication of a systematic treatise upon economics by Friedrich 'von. Wieser would have aroused the liveliest interest in all countries where economics is cultivated. But the war years and the early years of peace passed before many economists realized what an important addition had been. made to their science on the eve of the catastrophe which bent men's minds on destruction. When a second...edition of the volume containing Wieser's treatise came out in· 1924, the work was probably new to most of its readers. The present translation into. English is therefore less belated in effect than it .seems in years. The influence upon economic theory exercised by von "Wieser's formulation lies more in the future than in the' past. Among the active agents of this in fluence may be readers who make their first, acquaintance with von Wieser through Dr. Hinrichs.

In the United States, and perhaps in other countries, there seems to be current an impression that the Austrian school of economic theory has done its work-an impression which may arise from the fact that this group of investigators won a recognized place in the history of economic doctrines when Menger was in his prime and when Wieser and B1ohm-Bawerkwere young. Most of the present genera tion of active workers in economics studied the Austrian theory in college, much as they studied classical political economy. But von Wieser does not present his treatise as a completed system. This is a further respect in which the comparison with John Stuart Mill fails. When the second edition was called for, it is true that the author declined to make any changes in his text. He had turned once more to the conflict between his youthful conceptions of epic history and Spencer's argument that heroes are by-products of culture-a prob lem of which his solution appeared last spring in Das Gesetz der Macht. As for his exposition of economic theory, he hoped others would find what is to be added, whait is to be changed.

xii SOC I ALE, C 0 NO M I C S That Social Economics incites its readers to independent thought is, of course, its great merit. A scientific worker owes most to solutions which set new problems. It has been characteristic of von Wieser as a teacher that he has shown students how to work rather than what to believe. .The same trait is characteristic of him as a writer. A number of the ablest of his students have become disciples, and we may expect that they will make vigoronsefforts to carry further the leading principles of the Austrian School. But perhaps his students who have cultivated a different type of theory have profited by Wieser's teaching not less than the men who can be called disciples. The translation of his exposition into English should enlarge both of these interlinked groups-the men .who work upon Austrian lines and the men who :find the Austrian experiments a help toward trying something different. To whichever group a reader inclines he will owe a debt of gratitude to Friedrich von Wieser. Hours devoted to the study of Social Economics are hours of contact with a living force in the world of thought .

• Since the foregoing words were written, von Wieser has died. His heart failed on July 23, 1926, a f()rtnightafter his seventy~:fifth birth day, while he was recuperating' from' pneumonia at his summer home near Salzburg. A pupil and friend, Fr. Friedrich A. von Hayek, has published a sketch of his career in' the J ahrbucker fur Nationalo konomie und Statistik. How widely he' was esteemed will soon be re vealed by two memorial volumes, to which economists of many lands are making contributions. There is no need to alter what I wrote a year ago: though Wieser himself has gone, his work remains "a living force in the world of thought." WESLEY C. MITCHELL. New York City, May 1st, 1927.