In the first essay I discussed the general intellectual framework, the geistesgeschichtliche background of Menger's economic thought—of his economic theory and his methodology—and in the second essay I took a closer look at both the methodology embodied in the Grundsätze and the methodology expounded in his Untersuchungen. As has been repeatedly stated, the purpose of this study is not to arrive at an intellectual biography of Menger but to locate him in the history of ideas in general and in the history of economic thought in particular. In this essay, I turn to an investigation of his economic theory proper and attempt to clarify two questions: Where did Menger stand within the development of economic theory when he published his Grundsätze? and Where do Menger's analytical arguments developed in the Grundsätze stand in relation to modern neo-classical theory? Accordingly, I first take a brief look at the arguments present within value theory which Menger found in German political economy. This is followed by an exposition of Menger's economic theory of the Grundsätze. The essay concludes with a comparison of his analytical arguments with the axiomatic structure of modern neo-classical theory.