‘The Marginal Revolutionaries’
Janek Wasserman, Yale University Press, 354 pages, $35. Marginal utility is a basic building block of modern economics that assumes all value derives from the wants of consumers. The concept was worked out independently in Austria, England and Switzerland in the early 1870s. For its Austrian progenitor, the journalist-turned-economist Carl Menger, it soon led to a petty but legendary Methodenstreit (battle over methods) with a top German economist. The Germans emphasized history, statistics and the interests of the nation, Janek Wasserman writes in “The Marginal Revolutionaries,” while for Menger and those who followed him in what became known as the Austrian school, individual choice was central. This made Vienna a leading outpost of the market-oriented “neoclassical” economics that also became dominant in Britain and eventually the United States, where wealthy patrons liked their full-throated defense of markets. The Austrian school also had some unique properties. One was a fascination with entrepreneurs. Another was a skepticism of the mathematical tools used by neoclassical economists elsewhere. Most pronounced of all was a disdain for government management of the economy. Wasserman is a history professor at the University of Alabama and he doesn’t really have an ax to grind; his book is a fair-minded, deeply researched account of how a school of thought developed and wielded influence. It is a narrative with many protagonists, and keeping track of all of them can be a bit much, but it’s still quite well done, and full of fascinating stories.
NEW YORK TIMES