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Austrian Debates on Utility Measurement from Menger to Hayek

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Hayek: A Collaborative Biography

Part of the book series: Archival Insights into the Evolution of Economics ((AIEE))

Abstract

This chapter examines how some of the main exponents of the Austrian school of economics addressed the issues related to the measurability of utility. The first part of the chapter (Sections 2–9) is devoted to the period between the publication of Carl Menger’s Principles of Economics in 1871 and World War I, and studies the approaches to utility measurement of Carl Menger, Friedrich von Wieser, Eugen von Böhm-Bawerk, František Čuhel, Joseph Schumpeter, and Ludwig von Mises. In the pre-1914 period, two main views on the measurability of utility clashed. According to the first one, defended in particular by Böhm-Bawerk, the utility of goods can be measured and expressed as a multiple of a unit. According to the second view, advocated by Čuhel and Mises, utilities can only be compared and ranked but not measured. I will argue that by World War I the latter view, that is the ordinal understanding of utility, had become the dominant position among Austrian economists.

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  1. Ivan Moscati
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  1. Stanford University, USA

    Robert Leeson (Visiting Professor of Economics) (Visiting Professor of Economics)

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© 2015 Ivan Moscati

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Moscati, I. (2015). Austrian Debates on Utility Measurement from Menger to Hayek. In: Leeson, R. (eds) Hayek: A Collaborative Biography. Archival Insights into the Evolution of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/9781137452603_4

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