Franz Xaver Weiss, “Menger, Carl”

Franz Xaver Weiss’s biographical encyclopedia entry, originally published in 1933 and republished in the supplied 1937 version, presents Carl Menger as the founder of the Austrian school of economics. Its brief career outline—from Austrian civil service to a Vienna professorship in 1873 and retirement from teaching in 1903—frames an account of his theoretical achievements. Weiss moves from marginal utility and distribution to scientific method, then money and the reception of Menger’s writings. The organizing claim is that Menger’s importance lies in explaining economic phenomena through individual valuations and in clarifying the forms of inquiry appropriate to economic science.

Weiss places Menger alongside Jevons and Walras as independent developers of similar doctrines. The decisive innovation was not simply the recognition that goods are valued for their usefulness. Classical economics had failed to distinguish the utility of an entire quantity of a commodity from that of a particular unit. Marginal utility made this distinction analytically productive. Menger first explained the subjective value of consumers’ goods, which satisfy human purposes directly, and then productive goods, which satisfy needs indirectly. The distinction between goods of the first and higher orders thus supports a connected account of consumption and production, establishing the foundations of a theory of price and distribution subsequently developed by Böhm-Bawerk and Wieser.

The methodological importance of this theory consists primarily in the fact that it endeavors to explain economic phenomena by "understanding" the behavior of the individual: demand and supply do not determine prices immediately but indirectly by determining in the first place subjective value.

This sentence identifies the explanatory mediation central to Weiss’s portrait. Demand and supply are not discarded, but their effects become intelligible through subjective valuation. Understanding individual conduct therefore does substantive theoretical work: it connects economic conditions with the judgments through which prices emerge. Weiss further argues that the analogy between price formation and subjective value permits an initial explanation of distribution across economic systems through the concept of social value, without first invoking price theory. His qualification, “in the first approximation,” matters: the entry presents this as an approach to distribution’s basic features, not a complete explanation of every institutional arrangement.

The methodological controversy with the German historical school broadens this argument. Weiss describes Menger as defending theoretical and historical research as distinct but equally legitimate. Historical inquiry seeks the particular and unique; theoretical inquiry aims at the universal. This distinction, subsequently taken up by Windelband and Rickert, does not make history dispensable. It establishes different explanatory tasks and then differentiates approaches within theory itself.

Within theoretical research itself there are, according to Menger, two approaches: the exact and the empirico-realistic. The latter goes less far in abstraction in that it strives only after empirical, not universally valid laws.

The distinction makes abstraction a matter of methodological purpose. Empirical regularities and universally valid laws belong to different theoretical approaches; neither should be confused with the historical investigation of singular phenomena. Weiss thus presents Menger’s methodological contribution as a classification of legitimate inquiries rather than merely a defense of one school against another.

The final substantive section turns to money, explaining its emergence through exchange rather than beginning with an already established monetary institution.

Money originated in the course of transition from direct to indirect exchange, with the most salable commodity assuming the role of the medium of exchange.

Weiss also credits Menger with distinguishing changes in money’s value generally from changes originating on the monetary side. For money demand, the primary criterion is the aggregate cash balances held by individuals and financial institutions, rather than velocity of circulation. The entry closes by explaining why Menger’s doctrines circulated largely through other authors: his two principal works soon became unavailable, and he arranged no new editions. Lists of important works and secondary studies support further investigation. The resulting portrait links Menger’s foundational status to a specific explanatory program—subjective valuation, differentiated methods of inquiry, and an account of money arising from exchange—while acknowledging the role of successors in developing and transmitting it.