CHAPTER 5 Carl Menger: Founder of the Austrian School

Far removed from the metropolis, Vienna, in the small, nondescript Galician town of Neu Sandez (today Novy Sacz, Poland), Carl Menger was born on Friday, February 28, 1840, the third of ten children.¹ His mother, Karoline, came from a wealthy, merchant family that had purchased the surrounding Maniowy estate. His father, Anton, was the descendant of a family that had once hailed from Bohemia and held the aristocratic title of “Edler von Wolfensgrün” (cf. Boos 1986, pp. 3–4).

Carl was raised in a strict Catholic family (cf. Grünberg 1908/1909, p. 2). This must have been constricting to him and his two brothers, Max (1838–1911) and Anton (1841–1906), who would also gain great prominence as a German-liberal member of Parliament and a socialist university teacher, to the extent that all three of them later distanced themselves from the Church in a drastic way, with Anton even becoming an avowed atheist. There is no proof that the Menger brothers were of Jewish descent, and, in light of the above, it is extremely unlikely (differently Ikeda 1997, pp. 47–54; and Biehl 1980, p. 929).

The scant biographical records passed down indicate a childhood overshadowed by extensive misfortune and suffering. Carl lost four siblings; in 1848 he lost his father as well. Dearth and hardship were the consequences (cf. Kästner 1974, pp. 3–4). The fatherless child grew up partly in Biala, and partly on his grandparents’ remote country estate in the Dunajec river valley, an area flooded today by the Jezioro Czorsztyńskie reservoir. It was there that he acquired his firm knowledge of the Polish language—which he would later need as a journalist in Lemberg (cf. Ikeda 1997, p. 42).

After changing schools several times (cf. UA, Personalblatt Menger), Carl graduated from high school in Krakow and in the fall of 1859 began studying law in Vienna. Often in poor health (Ikeda 1997, pp. 23–24) and in difficult financial circumstances, he completed further studies in the more tranquil Prague (cf. Kästner 1974, p. 6). Traces of his economics teachers during that time, Leopold Hasner von Artha and Peter Mischler (1824–1864), can be found now and again in his first work, the Grundsätze der Volkwirthschaftlehre (1871) (Principles of Economics, 1950/2007). Fundamentally, however, there was a great distance between Menger and Mischler, with his insistent and antiquated piety (cf. Streissler 1997, pp. 66–70).

Even as a student, Carl Menger displayed a trait that would be often evident later on. He had an assertive, sometimes aggressive character and was not readily prepared to back away from authority. Two vehement arguments with professors from his time in Prague are well-known (cf. Ikeda 1997, p. 33); in the course of his Habilitation, he did not shy away from causing a veritable scene when challenging the senior examiner (ibid., p. 162). Later, in his Irrthümer (1884), this characteristic was expressed in a decidedly forceful and uncompromising way. Even though the Methodenstreit put him under obvious physical strain, he nevertheless had no desire to back down.

In 1867, Menger obtained his doctorate of law at the University of Krakow. During the time of his study he earned his living as a journalist in Lemberg, as co-founder of the Wiener Tagblatt, as an editorial journalist of the Wiener Zeitung, and as the author of a serialized novel (ibid., pp. 41–65). After obtaining his doctorate, he worked for a short time in an attorney’s office, and then once again as a freelance journalist for various newspapers in Vienna. In September of 1867 he began the preliminary work on what would later be his Principles (cf. Yagi 1993, p. 700). Until 1875 he was a contributor at the press office of the Ministerratspräsidium (“ministerial council’s chair”).

Menger succeeded in obtaining his Habilitierung for Political Economy at the University of Vienna in June of 1872—after his Principles were published. Just a year later he received a non-tenured professorship; he declined subsequent offers from Karlsruhe, Basel, and Zürich (cf. Hayek 1968, p. xix). In 1876 he was appointed teacher of Crown Prince Rudolf (1858–1889) and accompanied him in 1877 and 1878 on his travels across Europe. Menger imparted the crown prince, who was as highly gifted as he was erratic, with a liberal appreciation of economics and a great sensitivity for social problems (cf. Streissler and Streissler 1994). In 1878 he assisted Rudolf in writing an anonymous publication wherein the Austrian aristocracy was reprehended for being passive politically and inept economically (cf. Hamann 2006, pp. 101–105). Menger eventually gave up his own aristocratic title, which he had used in 1867 for book signing (cf. Menger 1963, p. i). The reason for this was possibly not only “civic pride” (cf. Hamann 2006, p. 81), but because of the impossibility of proving the origin of the title unequivocally, as is often the case with Galician aristocratic titles (cf. Dörfering 1989, p. 629).

After attaining his full professorship in 1879, Menger began training young academics, thereby creating personnel resources for the future Austrian School. He assisted with a total of thirteen Habilitationen, and was involved in five further Habilitationen in related subject areas (cf. Ikeda 1997, pp. 1–2). Menger was considered an “excellent, conscientious and stimulating teacher” (Zuckerkandl 1910, p. 252), who possessed the didactic talent to combine simplicity and clarity with philosophical depth (cf. Seager 1892–1893, p. 255). He sought to emphasize the practical relevancy of his lectures with the help of the latest numerical data. If students showed interest, he readily made his private library available to them, debated with them patiently, every so often invited them to Sunday outings, and made efforts to introduce younger students to former members of his seminar (cf. Grätz 1921). He maintained lifelong friendships with many of them, to which the almost complete collection of their books and special editions in his library testifies.

On committees Menger was “neither a leader nor a follower” (cf. Zuckerkandl 1910, p. 253). It seems he was able to make an impression with his generally complex and analytically astute contributions, but was by no means always able to persuade. He remained just as much in the minority with his suggestions regarding university reform (cf. Gutachten 1887, pp. 55–57) as he did on the “inquiry commission on currency” for the preparation of a currency reform, in which he, as one of thirty-seven experts, delivered a well-heeded statement (cf. Stenographische Protokolle 1892). In 1903 he found himself in a minority position again when he, as a member of the inquiry commission on housing tax, voiced his skepticism about the state and criticized social affairs (cf. Stenographisches Protokolle 1904/2000, pp. 268–273). Perhaps this was one of the reasons why Menger, who from 1900 on was a member of the Herrenhaus,² did not take part in the debates there.

In the 1890s, after the republication of his Principles had been postponed yet again, Menger began once more to pursue extensive studies in adjacent subject areas (cf. Menger 1871/1923, pp. vii–viii). He devoted himself to biology, physiology, mathematics, and ethnology, which resulted in his adding about 1,100 books on ethnology, anthropology, and various research expeditions to his library (cf. Katalog 1926–1955/1969, vol. I, pp. 849–948). As he unexpectedly took an early retirement, the aim of these endeavors—his plan to publish a work on sociology—was never achieved (cf. Somary 1959, p. 31).

A fateful turn had led to a considerable change in Menger’s life. His affair with the Galician-born feature writer, Hermine Andermann (1869–1924), twenty-nine years his junior, had produced an illegitimate son—the future mathematician, Karl Menger (1902–1985) (cf. Kosel 1902, vol. 1, p. 224). Social conventions forced him to go into early retirement in 1903, and subsequently to withdraw to a great extent from public life. Menger, now well advanced in years, remained committed to his marriage. He lived with his family at Fuchsthalergasse 12 in the 9th municipal district of Vienna until his death on February 26, 1921. He was surrounded by his books, which in the end constituted a library of 25,000 volumes. His own publications were now only sporadic. He kept in frequent touch with his students well into old age. As if they wished to demonstrate the esprit de corps of the School with this “true Viennese secret”—which everyone in Vienna knew but did not talk about in public—his students adhered adamantly to the version of his taking voluntary retirement for the sake of further studies.

¹On the biography of Carl Menger cf. Wieser 1923; Hayek 1968 (Introduction); Streissler 1989; Alter 1990; Streissler 1993; Salerno 1999a; Hülsmann 2007a, esp. pp. 101–140.

²Ed.: The House of Lords of the Austrian Parliament.