Friedrich von Wieser, (born July 10, 1851, Vienna, Austria—died July 23, 1926, Sankt Gilgen), economist who was one of the principal members of the Austrian school of economics, along with Carl Menger and Eugen von Böhm-Bawerk. As a non-economist, my comments probably won’t prove useful to specialists, but might serve as a gauge of the general reaction from non-specialists in economists. In short, what economists call a “market” is more like a Sioux ritual of counting coup. http://www.polity.co.uk/book.asp?ref=9780745607450, jake the antisoshul soshulist 05.27.15 at 1:31 pm. Calculate the opportunity cost of crappy health care, I dare you — and make sure you show your work. A. Wieser, F. F. von Austrian economist born July 10, 1851, Vienna, Austria died July 23, 1926, Sankt Gilgen economist who was one of the principal members of the Austrian school of economics, along with Carl Menger (Menger, Carl) and Eugen von Böhm Bawerk.… I fixed the book title on wikipedia (Der natürliche Werth). But all this amounts to saying is that any attempt to develop a general logic of economic behavior will automatically yield a theory of the socialist economy as a byproduct. “Much of the problems that arise from this set-up can be discussed only on a level on which Walras rules supreme. As part of the research for Economics in Two Lessons, I’m looking in to the history of some of the ideas I’m talking about, including Pareto optimality, externalities and of course opportunity cost. It enables us to treat such things as iron or cement or fertilizers–and also all services of natural agents and labor that are not directly consumed–as incomplete consumable goods, and thereby extends the range of the principle of marginal utility over the whole area of production and ‘distribution’. Friedrich von Wieser was an important early member of the Austrian School who introduced the theory of opportunity cost and imputation of non-consumer goods. Opportunity cost is one way to measure the cost of something. I also question the concept’s reliance on what I think JQ has previously described as “methodological individualism” but I don’t know if I am going to get any answers there. @Corey Thanks for this. Opportunity Cost Free Good Example The loss of potential gain from other alternatives when one alternative is chosen. Click on the ∞ symbol next to a name for a list of all of that author's posts. The term “marginal utility”, credited to the Austrian economist Friedrich von Wieser by Alfred Marshall, was a translation of Wieser's term “Grenznutzen” (border-use). Mass prosperity at the time meant electrification and commoditization and railways, mobilizing capital and labour through the state; the binding constraint was organizational capability toward coordination. Thanks for the kind thought. I am a great believer in asking the right question (almost always, the correct question is why, though “what do you mean by that” is also a good question). Wiser than Wieser: Considerations on Genetic Opportunity Costs and Conflicting Value Systems, in Relation to Natural Values "The economic calculation debate started with his (Friedrich 'von' Wieser's) notion of the paramount importance of accurate calculation to economic efficiency. Like his colleague, Böhm-Bawerk, Wieser was permitted to study under the three founders of the German school of historical economics—Karl Knies at Heidelberg, Wilhelm Georg Roscher at Leipzig, and Bruno Hildebrand at Jena. uses italics] and hence their exchange values, from the same marginal utility principle that provides the indices of economic significance and hence explains the exchange values of consumable goods. So when a Bank gets the amount that represents opportunity costs, what is it exactly, that they have done to earn this? A brief passage in Schumpeter’s History of Economic Analysis pp. Regarding your OP. But then, I tend to think of “free markets” as a chimera. was linked to a Viennese group of Fabians, http://socialdemocracy21stcentury.blogspot.com/2013/07/friedrich-von-wieser-on-progressive.html, http://socialdemocracy21stcentury.blogspot.com/2013/11/the-early-austrians-and-walrasianism.html, Felix Gilman / The Half-Made World/The Rise of Ransom City, Jack Knight and James Johnson / The Priority of Democracy, David Graeber / Debt: The First 5,000 Years, Erik Olin Wright / Envisioning Real Utopias. Friedrich von Wieser, 1851-1926. History of Friedrich Von Wieser 2. Certainly, that’s what happened with Austrian business cycle theory. Definitions of Friedrich_von_Wieser, synonyms, antonyms, derivatives of Friedrich_von_Wieser, analogical dictionary of Friedrich_von_Wieser (English) Wicksteed rejected the labor theory of value. It also strikes me that you might be interested in the early history of the Austrian school, since by the 1920s there were 2 wings: a (1) Classical liberal wing and (2) progressive liberal wing: http://socialdemocracy21stcentury.blogspot.com/2013/04/axel-leijonhufvud-interviews-hayek-on.html, http://socialdemocracy21stcentury.blogspot.com/2013/06/vaughn-on-early-history-of-austrian.html, http://socialdemocracy21stcentury.blogspot.com/2012/08/rescuing-menger-from-austrians.html. I, too, am amazed by that statement by von Wieser. That’s a piss-weak argument, since the “jerb creayyyyyy-tors” could retort that tilting income toward the upper 1% will spur investment, which in turn should increase GDP and productivity, a rising tide lifts all boats, yadda-yadda. And objections to methods that were peculiar to him crowded upon his readers–and especially Wicksell–as to impair the effect of what was really a great performance. You’d need a differential equation or set of linked differential equations with greek letters standing for “suffering” and “robbery” and “corruption” and I guaran-fuckin’-tee it would be highly nonlinear. Rev. Darwin is in the nuances. Therefore, it was particularly easy for them to realize that there was nothing specifically capitalist about their basic concept of value and its derivates such as cost and imputed returns: these concepts are really elements of a completely general economic logic, of a theory of economic behavior that may be made to stand out more clearly in a model of a centrally directed socialist economy than it can in the capitalist garb in which it presents itself to the observer whose historical or contemporaneous experience is with a capitalist world. (History of Economic Analysis, p. 917 footnote). But my main point was to question what constitutes “socialist” intentions, rather than outcomes. Expanding a bit more so as not to be just negative, when I returned to the study of history in the 1980s, and we were looking at some economic history type questions, one of the questions we were asked as a starting point in one essay was “what is work?” [with further questions about work and reward following the white invasion of Australia]. I used “scare quotes”. Suggestions on this point are welcome. I don’t think his views were entirely consistent. – but he can’t really be blamed here because a clear general vs partial equilibrium distinction hadn’t emerged in the literary form (would wait until Lionel Robbins, 1930s) or an axiomatic form (Arrow, … Friedrich Freiherr von Wieser (July 10, 1851 - July 22, 1926) was an early member of the Austrian School of economics.. Born in Vienna the son of a high official in the War Ministry, he first trained in sociology and law. As a general theory and as an explanation of the fundamental social meaning of cost–both in capitalist and in socialist society–it was NEW. My research on the intellectual history of opportunity cost has so far gone no further than Wikipedia, which attributes the term to Friedrich von Wieser, an Austrian economist in both the national (he was Minister for Finance there in 1917) and theoretical senses. Wieser's scientific contributions, epitomized in his Natural I really like the idea of having “skip over” sections that, hopefully, few will skip over. (3) the early Hayek (but *not* the Hayek of the later 1920s and after), and von Wieser is at this point (1910s) still playing fast and loose between opportunity costs for an individual objective function, and opportunity costs for a social planner – whose alternative costs? Today, prices are distorted by the injection of finance carrying opportunity “costs”. Amazon.ae: Natural Value: Wiesner, Friedrich Von, Wieser, Friedrich: Rarebooksclub.com If we consider a socialist economy, it is still more obvious that, for instance, maximization of satisfaction requires that the ratio of marginal utilities for each pair of consumers’ goods must be identical for all comrades; that in every line, production must be so organized as to make the technologically optimum use of all means of production, and that the marginal value productivity of all scarce means must be the same in all their uses or, at all events, must in every case be at least as great as it would be in any other. At present people on his home blog seem to be switching back and forth between the ‘common-sense’ concept of opportunity costs, as you describe, and an a somewhat obscure and counter-intuitive academic definition provided in a confusing (and possibly confused) academic paper someone linked to. It’s spot on, and I just wouldn’t have thought the Austrians capable of that. They then deduct this from any accounting profits and declare they are making zero “economic” profits. http://johnquiggin.com/2009/05/03/austrian-business-cycle-theory/. Opportunity costs seem to have created a bit of kerfuffle on Quiggin’s home blog. Menger’s work exercised a profound influence upon Wieser. Please take a moment to review my edit . (2) Friedrich von Wieser; Despite not describing them as “opportunity costs” per se, Frederic Bastiat was the first classical economist to describe the notion in his 1848 essay containing the “Parable of the Broken Window”. But the second problem with trying to use opportunity cost is that real opportunity cost, like Kolmogorov Complexity, is inherently impossible to calculate. I do suspect the problem isn’t just me :). in Daniel Rodgers’ Age of Fracture (though US-centric) to be very instructive and wonder whether John Q’s book might have some point of contact for readers of Rodgers’ and similar books. https://www.britannica.com/biography/Friedrich-von-Wieser, Austrian Economics Center - Rehabilitating Friedrich Von Weiser as an Austrian Economist, The Famous People - Biography of Friedrich Von Hayek. If you have any questions, or need the bot to ignore the links, or the page altogether, please visit this simple FaQ for additional information. The term was coined in 1914 by Austrian economist Friedrich von Wieser in his book Theorie der gesellschaftlichen Wirtschaft. He subsequently occupied official positions and served as minister of commerce in the last government of the Austro-Hungarian Empire. Then one ranks goods based on which goals they contribute to. 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