Karl Menger, whose biography will be reviewedlater in the article, born in 1840, February 23. He is known as an eminent economist and creator of the Austrian school. During the Third Reich, it was widely believed that all of its representatives, including the founder himself, were Jews.
Born future economist in a small townGalicia. She belonged at that time to the Austrian Empire. Menger's father was a lawyer, and his mother was a merchant daughter from Bohemia. In total, the family had three sons. Max (the elder) became involved in political activities, and Anton went in the footsteps of his father. Karl Menger spent his childhood in western Galicia, in the countryside. At that time feudal relations existed on this territory. At the universities of Vienna and Prague, Menger studied jurisprudence. In 1867, he was fascinated by economics. In Krakow, at Yangellon University, he defended his thesis. In 1871, a book was published, thanks to which Karl Menger became known. The biography of an economist since 1873 is related to teaching. For the next 30 years he was a professor at the University of Vienna. From 1876 to 1878, Karl Menger was a mentor to the heir to the throne of Austria, Crown Prince Rudolph, who later committed suicide. In 1879, he became head of the department of political economy in Vienna. Over the following years, Menger, in addition to his economic research activities, took part in the reforms of the state financial system. After a while he entered the Supreme Chamber in the parliament of the empire. Passing Frederick f. Viser (his student) department, Menger engaged in scientific work. In 1921, he died, without completing the second edition of his book on the foundations of political economy. The manuscripts were published by his son (also Karl). Menger Jr. is known as a mathematician. His name is called the theorem.
The economist rejected the idea of the value of a working resource. Karl Menger briefly expressed his concept as follows:
"Value has a subjective character. It does not exist outside the consciousness of the individual. Labor that is expended in producing good does not act either as a source or as a material of value."
He paid special attention to the Smith paradox.Its essence lies in the question: "Why is the price of diamonds much higher than water, despite the fact that water is more useful than diamonds for humans?" In classical political economy, this contradiction is explained by the fact that the cost of a product, if not identical to the work spent on its production, then depends on it directly. According to Menger, it doesn’t matter whether a diamond was accidentally found or it was mined using labor. Moreover, in practice, no one thinks about the history of the origin of any good. Value depends on the subjective perception of people who value relatively rare services or goods, as Karl Menger thought. The theory of working value, therefore, on the basis of this conclusion was denied by representatives of the Austrian school. However, economists did not take into account an important circumstance. Labor theory considered the conditions of mass production of the product using (or the possibility of using) machines and machines. In this political economy, the pricing of objects of art, antiques, prototypes, or explores indirectly, or does not study at all.
Karl Menger believed that value does not appear asobjective property of things. It reflects a person's judgment about the good. In this regard, the same product may have different values for different individuals. As necessary conditions for obtaining value, he called:
Subjective value is determined by the utility of the last unit of the product.
The study of the ratios established betweenhuman needs and the ability of objects to satisfy them, became the starting point of economic analysis, which was carried out by Karl Menger. The works of the scientist reveal several conditions under which the subject becomes a blessing:
The good, as Karl Menger argued, is that which can satisfy human needs. The three first chapters of his book on the foundations of political economy are devoted to this teaching.
Karl Menger distinguished several types:
Chapter 7 of the work on foundations is devoted to him.political economy. In it, Karl Menger talks about the differences between an economic good and a commodity. In addition, it gives a description of the main characteristics of the product - the limit and degree of its ability to implement, as well as the ability to handle. Under the borders should be understood aggregate consumer demand. The degree of ability to sell is important for products that do not have independent value, but are necessary as elements of other goods. The scientific merit of Menger was the introduction of such concepts as the price of supply and demand.
It is based on the definition of the ability of goodsto implement. Subsequently, this concept was investigated by Mises. The doctrine of money is revealed in the eighth chapter. It has 4 parts. The first describes the essence and origin of the funds. Menger points to emerging problems in the process of exchanging the products of labor within the framework of a primitive society. He says that interest leads to the fact that people give their goods in exchange for others who have greater sales ability, despite the fact that they do not need them as means to meet immediate needs. The following section describes the money used by each people in a particular era. In the early stages of development, cattle acted as them in the Old World. Cultural progress and the formation of cities leads to the fact that the marketing ability of animals decreases in the same proportion in which it increases in useful metals. The first such material was copper. Subsequently, it was replaced by gold and silver.
They are described in the fourth part of the eighth chapter.The usual exchange of products for metal ingots, which have the properties of a product that is easy to market, involves difficulties in determining the sample. As the best guarantee of quality and full weight of the metal began to act coinage. The idea of spontaneous appearance of money had a significant impact on the development of the views of Mises, Hayek and other representatives of the Austrian economic school.
