![Sample our Economics, Finance,Business & Industry journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5931/TOC-Subject-Sample-2021-Economics-Finance-Business-Industry.jpg"})
Abstract
The methodology of Carl Menger is often presented as contributing to the birth of neo-classical economics and following British classical liberalism, misrepresenting his original approach. On the contrary, Menger pretended empiricism. His application of subjective evaluation and his theoretical explanation of organic institutions are here seen as embedded in the Continental stream of enlightened liberalism inspired by the Lockean theory of knowledge. This methodological stream that deals with decision-making under uncertainty includes Galiani, Condillac, and Turgot, possibly preceded by Vico.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 The critique concerned the utilitarian conception of (public happiness oriented) public policies of Enlightened liberalism.
2 Peter Boettke (Citation2002, 263) affirms that “it is the epistemic-cognitive turn that the Austrian school took in the wake of the socialist calculation debate that separates the school from other branches of neo-classicism.”
3 Comte is not cited in the Grundsätze. He became influential in the Investigations into the Method of the Social Sciences (1883) and in the study for revision of this work, as noted by Campagnolo (Menger Citation1871/2020).
4 This way of considering economic complexity as a cognitive difficulty is similar to contemporary studies on this subject (Delorme Citation2010). See also Gloria (Citation2021).
5 Milford (Citation2012) defines Menger’s method nominalist. However, this is a misleading synthetic definition.
6 Capograssi called it epistemology of humility, starting from the awareness of imperfect knowledge of both the scientist and man in general (Capograssi Citation1925).
7 The instruments available to scholars changed much in the 150 years dividing the two scholars. Statistics progressed much, but Menger prefers basing his reasoning on historical facts and on every-day evidence on how we behave. Flavia Monceri (Citation2017) argued that principles are seen by Menger as regulative criteria orienting praxis. Menger’s theory is based on necessary knowledge, not on contingent knowledge. According to Menger (Citation1883 [2011]), historical and theoretic knowledge have different ends and methods (Monceri Citation2017, 27).
8 Vico developed his perspective by taking position in two great intellectual quarrels: empiricism against rationalism (particularly Boyle against Hobbes), the Querelle des anciens et des modernes. Concerning the latter, he supported rhetorics against Port Royale and the mathematical view of the world. The title of Vico’s La scienza nuova takes inspiration directly from Galileo Galilei’s (1638) Due Nuove Scienze.
9 Barnow affirms that active experience is “focused and formalised in experiment but has a broader potential range, for it encompasses the various forms of social practice 2017 otherwise governed by tradition and authority” (Barnouw Citation1980, 610). For Bacon and Hobbes the new method was based on a deliberate orientation of thought to operation. However, Hobbes argued that the value of an experiment lies in its possibility of being expressed by mathematics, while Boyle claimed that the value of an experiment lies in peer approbation.
10 Barnouw (Citation1980) argued that “In De nostri temporis studiorum ratione Vico compares the methodological orientations of the classical and the modern intellectual world, explicitly extending and modifying Bacon's survey. He is particularly concerned to see what advantages of the ancients' system of arts and sciences might have been sacrificed in the progress of modern science, and whether these might be recovered or compensated for without detriment to the modern critica” (614).
11 According to Fumaroli (Citation2001, section III.12), Vico argues in favour of the ancients in De nostri temporis (1708) and De Mente Heroica (Vico Citation1732). His point is that even modern science is based on genius as ancient masterpieces. Descartes was considered to be promoting a pedagogical revolution contra nature, reducing our imaginative capabilities.
12 Obviously a common sense of the scientific community. Sapientia is a composite of experience (certo scire), behaving fairly (recte agere), and speaking properly and respectably (digne loqui) (Botturi Citation1996, 112).
13 Fundamentally expressed in the Essay Concerning Human Understanding (Locke Citation1690–1975).
14 On the other hand, Tagliacozzo (Citation1968) sees Genovesi as superficially affected by Vico; he accused Genovesi of having badly digested the work of Galiani (Tagliacozzo Citation1968, 270).
15 Neapolitan Enlightenment had a relevant impact on the shape of Italian political economy. The ideas of Vico and Doria represented the most important input for Galiani and Filangeri and, in part, for Genovesi. From Naples, these ideas migrated North to Beccaria and Verri in the eighteenth century and to Romagnosi, Ferrari, Rosmini, and Cattaneo in the nineteenth century. Vico was translated in French in 1827 by Jules Michelet (late to affect economists) and had some success owing to the studies of Pierre-Simon Ballanche. In Germany, his work was seen as highly compatible with idealism, particularly concerning the philosophy of history.
16 Böhm-Bawerk argued that Methodenstreit generated some misunderstanding and that “from this fact the so-called empirical method suffered greatly six years” (Citation1890, 247).
17 See Kolev (Citation2019) for a discussion on the use of types on the Austrian school. What Menger calls exact types in economics can be interpreted as complex universals in the immanent realist sense, and what he calls exact laws are relations between these universals (Mäki Citation1997, 477).
18 This topic was analysed also in relation to the notion of wealth in notes 14 and 18.
19 Therefore, Menger included personal relationships as firms, clientship, monopoly, and patents but also family relationships, friendship, love, religious, and scientific communities. Whatever can be important for the individual can be an economic good. In particular, it includes relational goods typical of the civil economy (Magliulo Citation2009).
20 Max Alter (Citation1982, 153) argued that in Mengers view, values constitute the essence underlying economic activity, while prices are only accidental phenomena, appearances on the surface.
21 Monceri has pointed out some nihilist element in Menger: the impossibility to overcome the boundaries assigned to human thought within history and the absence of an objective hierarchy of values. That means that there is a plurality of values, but we cannot prove their validity by our fallible human reasoning. Therefore, only human individual choice reveals a value to some good (Monceri Citation2017, 47). However, that does not mean that the individual described by Menger has no values.
22 Menger’s (Citation1883 [2011], book 1, chapter 7) conception of personal interest is not affected by constraints or errors. Menger also considers some separate action motives: common sense, altruism, costumes, the sense of law, and so on.
23 The value of things (as in general I condsider all of them) is defined by many as men’s estimation of it.
24 The estimation, that is, the value, is an idea of proportion between the possession of a thing and that of another in the concept of a man.
25 Equality between having a thing or the other because in equality, there is no loss and deception.
26 2014 Edizioni di Storia e Letteratura, Rome, with an introduction by Alessandro Roncaglia.
27 Giorgio Tagliacozzo (Citation1968) argued that the elements of Vico’s philosophy have been important in the economic theory of Ferdinando Galiani (Citation1751–1780) (Tagliacozzo Citation1968, 96).
28 According to Tagliacozzo, Condillac restated Galiani's formulation of subjective value. Then, Turgot and Say in France (Beccaria and Verri in Milan) developed the same argument. Tagliacozzo (Citation1968) also argued that Schumpeter underestimated the impact of Vico on Galliani because he considered that value theory came directly from Scholastics (evaluation ab indigentia). On the contrary, Böhm-Bawerk acknowledges the role of Galiani to be even greater than that of Turgot for his theory of interest.
29 Canard’s Principes d’économie Politiques (Paris 1801) was translated into German in Vienna in 1814 (Streissler Citation2001, 318).
30 In this volume, he claimed that human economy can be studied from different perspectives: subjective (based on individual behavior) and collective (based on social group behavior) (Becchio Citation2010, 10). Even the theory of goods undergoes a certain change, as according to Menger, there are three kinds of social goods: “common goods,” “collective goods,” and “goods of associations” (Becchio Citation2014).
31 Gilles Campagnolo pointed out that “the idea of Aristotle’s that Menger likes to quote then is not only that ‘man [that is, a human being, ἄνθρωπος]’ is a ‘political animal [ζωόν πολιτῖκόν]’ but that he can only be so after a stage preliminary to civilization” (Campagnolo Citation2010, 243).