The Review of Austrian Economics, 14:2/3, 145–156, 2001.
2001 Kluwer Academic Publishers. Manufactured in The Netherlands.
By Way of Deduction: Sch¨utz’s Essay on Taxation
CHRISTOPHER PRENDERGAST email@example.com
Department of Sociology and Anthropology, Illinois Wesleyan University, Bloomington, Illinois 61702-2900
Abstract. Alfred Sch¨utz’s 1927 essay on capital income taxation is examined in the contexts of the evolution of
the German progressive income tax, the ﬁscal and monetary crises of the time, and Sch¨utz’s relationship to the
Austrian school of economics.
JEL classiﬁcation: B3.
This special edition of the Review of Austrian Economics commemorates the 100th anniver-
sary of the birth of the Viennese philosopher and social theorist Alfred Sch¨utz (1899–1959).
Seeking to keep alive the questions that Sch¨utz brought to the symposium of 20th century
social thought, the major phenomenological societies in Germany and the United States
gathered together at scholarly conferences to celebrate his centennial and his ideas. Many
ﬁne papers were read on those occasions, but none developed the theme that is central to this
special edition—the profound reciprocity of intellectual inﬂuence between Alfred Sch¨utz
and the Austrian school of economics.
Sch¨utz’s engagement with Austrian economics and methodology was long-lived, pro-
found, and central to his project of developing a “constitutive phenomenology of the natural
standpoint” (Sch¨utz 1967:44). Not only were his adaptations of Weber’s ideal type ﬁtted to
the premises of the school (Prendergast 1986), but such fundamental Sch¨utzian themes as
relevance, typiﬁcation, the social distribution of knowledge, and working (Wirken) as the
paramount reality of everyday life all resonate with elements of the Austrian tradition from
Menger to Hayek. Indeed, since Emil Kauder (1965) ﬁrst brought Sch¨utz’s Austrian debts
to the attention of intellectual historians, a small subspeciality has grown up around these
In this essay I seek to sharpen the question of reciprocal inﬂuence by focusing not on
Sch¨utz’s methodological or substantive writings, but on his writings on economic policy.
As strange as it may seem, to date no one has undertaken to collect, contextualize, and
interpret this body of work. It seems altogether appropriate to commence this undertaking
in this celebratory edition of the Review of Austrian Economics.
During the eight years that he served as executive secretary of the Austrian Banking
Association, Sch¨utz sent an unknown quantity of policy-relevant material to legislative
committees, newspapers, and ﬁnancial magazines. Little of this material has even been
collected, let alone translated into English. In light of the centrality of policy questions for
the Austrian school, I make a synopsis of one these articles here. Writings like this lent