Ludwig von Mises: Review of Three Economics Textbooks (1922)

Ludwig von Mises’s 1922 “[Sammelbesprechung zu Theoretische Sozialökonomie; Theoretische Nationalökonomie, Band 1; Grundzüge der Volkswirtschaftslehre]” examines textbooks by Gustav Cassel, Karl Diehl, and W. Gelesnoff. Its opening establishes their shared significance:

Vor uns liegen drei neue Lehrbücher der Nationalökonomie, die besonders Interesse beanspruchen.

English translation: Before us lie three new textbooks of economics which have a particular claim to interest.

Mises’s organizing concern is their resistance to subjective value theory, which he connects to the isolation of German and German-influenced Russian economics from international theoretical developments. His assessments distinguish each author’s contributions while insisting that theoretical progress requires engagement with marginal utility theory.

Diehl receives the most extensive treatment. Mises accepts his diagnosis that German economics has accumulated historical and descriptive material at the expense of theoretical training. Yet Diehl’s account reproduces this imbalance by marginalizing foreign theorists and interpreting Austrian economics primarily through its opposition to historicism. Mises challenges that genealogy:

Es ist schon eine Verkennung der Stellung, die der österreichischen Schule in der Geschichte unserer Wissenschaft zukommt, wenn man sie als „Reaktion“ gegen die historische Schule auffaßt.

English translation: It is already a misapprehension of the position which belongs to the Austrian School in the history of our science when it is conceived as a "reaction" against the historical school.

The objection concerns the continuity of theoretical problems. Subjective value theory develops questions inherited from classical economics; its emergence cannot be explained as a local methodological reaction. Mises states this continuity sharply:

Die Entwicklungslinie von RICARDO und MILL zu den Modernen wird nirgends durch die historisch-ethische Richtung unterbrochen.

English translation: The line of development from RICARDO and MILL to the moderns is nowhere interrupted by the historical-ethical tendency.

The modern advance consists in explaining valuations through concrete satisfactions rather than abstract categories of wants. Independent contributions by Gossen, Menger, Jevons, and Walras belong to an international theoretical development. Diehl’s limited engagement with this literature weakens both his history of economics and his substantive criticism.

Mises specifies the conceptual disagreement through Diehl’s objection to Böhm-Bawerk’s grain-sack example. Diehl treats a preference for keeping parrots over eating meat as inconsistent with rational economic ordering. Mises replies that marginal utility concerns the individual’s ranking of satisfactions, not an observer’s judgment of their objective importance. Explaining choice does not require endorsing the chooser’s priorities. Diehl’s proposed alternative, grounded in the legal norms of particular social organizations, likewise leaves unclear how its search for regularities advances beyond the descriptive historicism he criticizes. Mises reserves judgment on what subsequent volumes might accomplish.

Cassel’s greater familiarity with modern economics does not, in Mises’s assessment, resolve his theoretical difficulties. His scarcity principle inadequately substitutes for what marginal utility theory already explains. Mises also rejects the claim that subjective valuation requires arithmetic measurement of satisfaction: preference between concrete quantities is sufficient. His defense of analytical abstraction follows the same logic. Theory may begin with direct exchange before introducing money and credit without claiming that barter historically preceded monetary exchange. The analytical sequence isolates relationships and then examines their modification. Despite rejecting Cassel’s attempt to dispense with value theory, Mises recognizes his earlier theoretical contributions and welcomes his discussions of socialist pricing and wartime economics.

Gelesnoff appears as an independent-minded Marxist whose eclectic synthesis nevertheless suffers from insufficient knowledge of modern theory. His objection that marginal utility theory assumes fixed stocks overlooks its account of production through subjective valuation. His reconciliation of labor value and utility similarly fails to address the modern treatment of utility and costs, while his monetary analysis neglects relevant Austrian and American work.

Mises nevertheless values Gelesnoff’s accessible exposition and its ability to interest beginners in economic policy. The textbook’s Russian reception also documents the influence of German Marxist and historical-school thought. Its German translation, alongside the absence of translations of major works by Jevons and Clark, exemplifies the selective intellectual exchange Mises criticizes.

The review defends cumulative inquiry rather than the finality of marginal utility theory. Its methodological argument joins subjective preference, analytical abstraction, and international scholarly engagement: later theory may supersede existing achievements, but cannot advance simply by bypassing them. Mises leaves the historical causes of German and Russian resistance unresolved, suggesting that their explanation would also illuminate the reception of Marxism.