Julius Friedrich Gans von Ludassy · 1888
Julius Friedrich Gans von Ludassy’s 1888 review assesses Sax’s reconstruction of economic theory as a foundation for understanding state finance. It combines advocacy for the emerging Austrian school with criticism of Sax’s exposition and methodological consistency. Its governing distinction is between the book’s achievement in clarifying economic concepts and its incomplete realization of a systematic theory of public economy.
The opening places Sax within a polemical history of economics. Against the German historical school’s accumulation of information, Ludassy emphasizes the recovery of explanatory reasoning associated with Menger and Austrian economists:
Hochdeutsche, Oesterreicher sind es, die begonnen haben, diese so wichtige Disciplin zu vertiefen, die bereits zu verflachen drohte.
English translation: It is High Germans, Austrians, who have begun to deepen this so important discipline, which was already threatening to become shallow.
Sax matters here as a participant in the renewal of theory, not simply as a specialist in finance. Ludassy’s praise is emphatic:
Das vor Kurzem erschienene Hauptwerk dieses Autors gehört unstreitig zu den bedeutendsten der Fachliteratur.
English translation: This author's principal work, which appeared a short time ago, belongs indisputably among the most significant in the specialist literature.
Yet scientific importance does not excuse the difficulties imposed on readers. Ludassy criticizes both Sax’s prose and the order in which his concepts appear:
Das Verständniss, insbesondere der ersten vier Abschnitte seines Werkes, ist auch noch dadurch erschwert, dass Sax seinen Stoff nicht methodisch theilt und gliedert, nicht vom Bedingenden zum Bedingten fortschreitet.
English translation: Comprehension, particularly of the first four sections of his work, is further impeded by the fact that Sax does not divide and articulate his material methodically, does not proceed from the conditioning to the conditioned.
The review consequently makes elementary categories explicit before tracing their application to collective activity. Its comparisons with Kant concern intellectual ambition and difficulty, while anticipating the concluding discussion of subjective valuation.
Ludassy first examines the programme of Sax’s earlier methodological work. Economics needs clearer foundations and a distinction between theoretical explanation and practical intervention. Sax’s differentiation of egoism, altruism, and mutualism nevertheless risks importing ethical judgments into causal analysis. Ludassy argues that a theory of valuation need not exhaustively account for the motives underlying economic conduct. He also questions the identification of being and obligation with the general and the particular: the relevant distinction concerns knowledge of conditions and the action inferred from that knowledge. Sax’s later treatment improves matters by presenting individualism and collectivism as organizational forms compatible with different motives.
The central theoretical advance is to explain collective economy through categories also governing individual economy. Collective needs arise from social life, but individuals experience them; the state has no independent faculty of feeling. Individual and collective needs therefore enter the same process of ranking according to intensity. Valuation connects private economic activity with the provision of collective goods.
This approach also reverses accounts that make labour the cause of value. Anticipated value determines whether labour is undertaken, and the value of products governs that of productive inputs. Capital receives its value from prospective goods, with futurity and the labour required for their realization entering the explanation. These principles extend the theory beyond private exchange to public expenditure and procurement.
Ludassy gives particular attention to Sax’s account of collective ends and their financing. State purposes include power and law as well as culture and welfare. Collective activity can restrain harmful conduct, coordinate individual efforts, or secure results that individual action cannot achieve. Although Sax’s classifications initially appear excessively elaborate, Ludassy finds their justification in the distinctions they support among financing arrangements.
Public enterprises receive prices, whereas public institutions combine individual benefits with collectively necessary provision. Fees may therefore coexist with assistance for those unable to pay. Taxes support collective needs whose benefits cannot be separated into individual shares. Contributions presuppose resources beyond physical subsistence and increase progressively, within limits, as resources grow. Differences in needs also matter: equal holdings do not automatically warrant equal contributions.
The review concludes by delimiting Sax’s accomplishment. His strongest contribution is a revision of the basic concepts used in economics and finance, rather than the completed exposition of laws governing the state budget promised by his programme. Ludassy’s characterization of the Austrian school as “critical” gives this judgment broader significance. Recognizing the subjectivity of value judgments furnishes a basis for reconstructing economic explanation; Sax’s achievement lies in extending that reconstruction toward collective needs and public finance.
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