ABSTRACT

In this chapter, I present my critique of the methodological arguments of Carl Menger, the founder of the Austrian School of Economics, with special attention paid to his subjectivism, the general theme of the entire volume. Menger has been widely viewed as a mentor of the school, and although his subjectivism plays an important role in the arguments of later Austrians, his methodology is not always well founded. My thesis statements are that: (1) Menger failed to apply his own methodology to Grundsätze (1871), one of his main works, which contributed a great deal to the foundation of microeconomics in the broader sense of the term. (2) Menger attempted to provide the foundations of his methodology in his 1883 book, but he was not successful in doing so. He failed to persuade the reader that an economic analysis based on each individual subject and economic behavior is more relevant than other vantages in understanding economic phenomena.