Nationalökonomie (1873)

“Nationalökonomie,” signed M. and attributed to Carl Menger, is a review of Fr. Xav. Neumann’s textbook on economics and its application to military affairs and administration. Its argument distinguishes the book’s educational achievement from its questionable methodological ambitions: a valuable textbook need not derive its authority from analogies between economic processes and natural laws.

The review begins with the completion of Neumann’s work: a practical second part now joins the previously published theoretical portion. Written for military schools, the textbook earns praise for its attention to relations between the economy and the army, its author’s teaching experience, and its unusually clear and elegant exposition. The reviewer accepts practical instruction, rather than theoretical novelty, as a sufficient and important purpose.

The central criticism concerns Neumann’s attempt to treat the economy as part of society’s organic life and apply supposed natural laws of society to it. Before considering their application, the reviewer questions whether such laws are actually known:

Wer kann bei dem gegenwärtigen Stande der Wissenschaft von sich behaupten, daß er die „Naturgesetze“ der Gesellschaft kenne?

English translation: Who, at the present state of science, can assert of himself that he knows the "natural laws" of society?

The objection then becomes methodological. Neumann and predecessors such as Carey and Peshine-Smith transfer findings from natural science into economics by insufficiently examined analogy. The prestige of a physical discovery does not establish the validity of its economic counterpart. Conservation of force supplies the decisive example:

Das nach der Analogie des obigen Satzes construirte „Gesetz von der Erhaltung der Kraft in der Volkswirthschaft“ ist ein Unding und widerspricht aller und jeder Erfahrung.

English translation: The "law of the conservation of force in the national economy," constructed on the analogy of the above proposition, is an absurdity and contradicts each and every experience.

The reviewer’s counterargument separates physical persistence from economic usefulness:

Jede unzweckmäßige, jede zur Befriedigung der Bedürfnisse von Müßiggängern verwandte Kraft geht — nicht in der Natur — aber wirthschaftlich verloren.

English translation: Every force that is applied inexpediently, every force applied to the satisfaction of the wants of idlers, is lost, not in nature, but economically.

Force may remain conserved in nature while being lost economically through its use. This distinction gives the brief review its conceptual significance: economic judgments cannot simply be read off physical laws. The reviewer similarly rejects purported Darwinian explanations of economic processes, finding no scientific advance in analogies whose circulation among Austrian economists, or acknowledgment by prominent German scholars, does not validate them.

The conclusion returns to the textbook’s practical merits. These speculative connections neither dominate the book nor sustain its value. Its achievement lies in providing usable economic instruction for military higher education and fostering economic knowledge among officers. The review thus combines a pointed defense of methodological discrimination with a generous assessment of teaching: Neumann’s exposition and institutional usefulness remain worthy of recognition despite the failure of his natural-scientific analogies.