Important Economists of the Austrian School
Ludwig von Mises
Ludwig von Mises belongs to the third generation of the Austrian School of Economics and he profited greatly from studying under Eugen von Böhm-Bawerk and Carl Menger. His groundbreaking works on monetary economics and credit found recognition in practical affairs early on and prevented inflation in Austria from running out of control in the 1920s as it had in Germany.
He showed that supply and demand determine not only the price of goods and services, but also the price of fiduciary media, i.e. money. In 1927 Mises, together with Hayek, founded the Austrian Institute for Business Cycle Research, whose aim was not only the scientific explanation of fluctuations in economic activity, but also the promotion of entrepreneurship in the young country of Austria.
Other works include a detailed analysis of socialism, whose conclusion held that there can be no rational economic calculation in socialist societies, since without private property rights there is no way of ascertaining prices for the means of production. The breakdown of Soviet-style socialism in 1989 have demonstrated the truth of Mises’ analysis.
During World War 2, Mises fled to the United States of America and saw massive success with the publication of his monumental book “Human Action”, in which he aims to reconstruct the whole existing body of economic theory and reintegrate the concept of individual human action to its corpus.