Family and education Carl Menger von Wolfensgrün He was the son of a wealthy family of minor nobility; his father, Anton Menger, was a lawyer. His mother, Caroline Gerżabek, was the daughter of a wealthy
Bohemian merchant. He had two brothers,
Anton and Max, both prominent as lawyers. His son,
Karl Menger, was a mathematician who taught for many years at
Illinois Institute of Technology. After attending
Gymnasium, he studied law at the universities of
Prague and
Vienna and later received a doctorate in jurisprudence from the
Jagiellonian University in Kraków. In the 1860s Menger left school and enjoyed a stint as a journalist reporting and analyzing market news, first at the
Lemberger Zeitung in Lemberg, Austrian Galicia (now
Lviv, Ukraine) and later at the in Vienna.
Career During the course of his newspaper work, he noticed a discrepancy between what the classical economics he was taught in school said about
price determination and what real world market participants believed. In 1867, Menger began a study of
political economy which culminated in 1871 with the publication of his
Principles of Economics (), thus becoming the father of the
Austrian school of economics. It was in this work that he challenged classical cost-based theories of value with his theory of marginality – that price is determined at the margin. In 1872 Menger was enrolled into the law faculty at the
University of Vienna and spent the next several years teaching finance and political economy both in seminars and lectures to a growing number of students. In 1873, he received the university's chair of economic theory at the very young age of 33. In 1876 Menger began tutoring Archduke
Rudolf von Habsburg, the crown prince of Austria, in political economy and statistics. For two years, Menger accompanied the prince during his travels, first through continental Europe and then later through the British Isles. He is also thought to have assisted the crown prince in the composition of a pamphlet, published anonymously in 1878, which was highly critical of the higher Austrian aristocracy. His association with the prince would last until
Rudolf's suicide in 1889. In 1878 Rudolf's father, Emperor
Franz Joseph I, appointed Menger to the chair of political economy at Vienna. The title of
Hofrat was conferred on him, and he was appointed to the Austrian in 1900.
Dispute with the historical school Ensconced in his professorship, he set about refining and defending the positions he took and methods he utilized in
Principles, the result of which was the 1883 publication of
Investigations into the Method of the Social Sciences with Special Reference to Economics (''''). The book caused a firestorm of debate, during which members of the
historical school of economics began to derisively call Menger and his students the "Austrian school" to emphasize their departure from mainstream German economic thought – the term was specifically used in an unfavourable review by
Gustav von Schmoller. In 1884 Menger responded with the pamphlet
The Errors of Historicism in German Economics and launched the infamous , or methodological debate, between the historical school and the Austrian school. During this time Menger began to attract like-minded disciples who would go on to make their own mark on the field of economics, most notably
Eugen von Böhm-Bawerk, and
Friedrich von Wieser. In the late 1880s, Menger was appointed to head a commission to reform the Austrian monetary system. Over the course of the next decade, he authored a plethora of articles which would revolutionize
monetary theory, including "The Theory of Capital" (1888) and "Money" (1892). Largely due to his pessimism about the state of German scholarship, Menger resigned his professorship in 1903 to concentrate on study. ==Economics==