The Austrian school of economics was founded in 1871 with the publication of Carl Menger’s Principles of Economics. menger, along with william stanley jevons and leon walras, developed the marginalist revolution in economic analysis. Menger dedicated Principles of Economics to his German colleague William Roscher, the leading figure in the German historical school, which dominated economic […]| Econlib
Although labor unions have been celebrated in folk songs and stories as fearless champions of the downtrodden working man, this is not how economists see them. Economists who study unions—including some who are avowedly prounion—analyze them as cartels that raise wages above competitive levels by restricting the supply of labor to various firms and industries. […]| Econlib
Ronald Coase received the Nobel Prize in 1991 “for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.” Coase is an unusual economist for the twentieth century, and a highly unusual Nobel Prize winner. First, his writings are sparse. In a […]| Econlib
Many people believe that only government intervention prevents rampant discrimination in the private sector. Economic theory predicts the opposite: market mechanisms impose inescapable penalties on profits whenever for-profit enterprises discriminate against individuals on any basis other than productivity. Though bigoted managers may hold sway for a time, in the long run the profit penalty makes […]| Econlib
One of the most fundamental requirements of a capitalist economic system—and one of the most misunderstood concepts—is a strong system of property rights. For decades social critics in the United States and throughout the Western world have complained that “property” rights too often take precedence over “human” rights, with the result that people are treated […]| Econlib
In a capitalistic society, profits—and losses—hold center stage. Those who own firms (the capitalists) choose managers who organize production efforts so as to maximize their income (profits). Their search for profits is guided by the famous “invisible hand” of capitalism. When profits are above the normal level, they attract additional investment, either by new firms […]| Econlib
Recognized as one of the most influential voices in the areas of market structure, the theory of the firm, law and economics, resource unemployment, and monetary theory and policy, in this 2001 interview, Armen Alchian (1914-2013) outlines the “UCLA tradition” of economics which he founded and explores the many unanticipated consequences of self-seeking individual behavior. […]| Econlib
