On Menger’s “Principles of Economics”

Mises supposedly said that Carl Menger’s Principles was still (at the time) the best introduction to Austrian economics. This is certainly true, but I would go further than that. The Principles is not only an introduction to Austrian economics but a great introduction to sound economic thinking. Whether you agree with “Austrians” or not, and whether you have successfully finished a graduate degree in economics or not, you will still learn a lot about economic reasoning, the logic of social relations, and – especially – the economic way of thinking.

Menger’s treatise is a very easy read, is exclusively written in beautiful prose (no math), and focuses on understanding how the market functions through first understanding how and why individuals choose to act. But it is not simply an overview of concepts; it is a thorough analysis of the bases and starting points for economics as well as the understanding that necessarily follows. Menger provides an impeccable understanding for what is action, why individuals act, how to understand value from the individual actor’s point of view – and how these things beautifully provides a sufficient basis for understanding exchange, market pricing, and money.

Whereas this treatise is wonderful in every possible way, not to speak of the historical value of being one off the three simultaneous findings of the “marginalist revolution,” there is one problem with it: it was supposed to be the first volume in a multiple-volume treatise. But Menger never got to writing the second volume, and because of this the world is clearly at a loss.