Approaches of the Austrian
School to the Soziale Frage
before World War I – Wieser and
Austrian Chamber of Labour Economic Research Department, Austria
Purpose – The paper aims to provide an overview of the Austrian School’s approaches to the social
question before World War I.
Design/methodology/approach – The paper takes the form of a comparative study.
Findings – In his contributions Friedrich von Wieser supported co-operative associations as an
organizational form of big enterprise to be used as instruments to ameliorate the social condition of
workers; and who dealt with issues such as private ownership of the means of production and
economic inequality, impact of collective bargaining on wage formation, and public economy, where he
discussed the contribution of public sector production to social value. Further reports on
hm-Bawerk’s essay on disadvantageous consequences of free competition where he came to the
conclusion that free competition in reality does not maximize national economic welfare, without,
however, drawing concrete policy consequences from his ﬁndings. As Austria’s ﬁnance minister he
introduced a modestly progressive income tax early in the twentieth century. Later, in his essay
“Control or economic law” he took a more reserved position with respect to the possibilities of
correcting ore modifying outcomes of the market process.
Practical implications – The paper illustrates that redistribution can enhance economic welfare.
Originality/value – Calls back to memory that opinions of the ﬁrst generation of the Austrian
School (Wieser, Bo
hm-Bawerk) were different from Ludwig Mises’ positions expressed in Die
Gemeinwirtschaft that all measures of social policy are aimed at the destruction of the free market
economy, which later came to be considered as the dominant position of the Austrian School towards
the social question.
Keywords Unemployment, Economic models, Economic theory
Paper type Research paper
After World War I, Ludwig Mises’ view, expressed in Die Gemeinwirtschaft, that all
measures of social policy are aimed at the destruction of the free market economy,
came to be considered as the dominant position of the Austrian School towards the
social question. For the ﬁrst generation of the Austrian School, however, the picture is
different in this respect.
Suspicions that the Austrians had a defensive or at least an indifferent attitude with
respect to social reforms were expressed even in the early years of formation of the
hm-Bawerk quotes at some length Lujo Brentano’s charge that in its mode of
abstract thinking the Austrians content themselves with the refutation of certain
erroneous socialist doctrines, at the same time implying that this proves:
The current issue and full text archive of this journal is available at
Contribution to the 15th Heilbronn Symposium in Economics and the Social Sciences “The Social
Question – Die Soziale Frage”.
Journal of Economic Studies
Vol. 33 No. 3, 2006
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