Austrian Economics Center

Quote of the Week | Ludwig von Mises

Quote of the Week | Milton Friedman

Do you agree that inflation acts like a hidden tax?

How do we determine value? 📉

In his classic work ''The Order of Things'', Michel Foucault reveals that our understanding of economics is bound to the hidden structures of history - the episteme.

The Classical Shift: Foucault shows that around 1800, a tectonic shift occurred - economics abandoned static systems of exchange to focus on production and labor time as the source of value.

The Austrian Revolution: but the story didn't end there. In 1871, Carl Menger launched the Austrian School by fundamentally shifting the episteme once again.

The Victory of Subjective Value: Menger’s Marginal Revolution shattered the idea that value is an intrinsic property derived from past labor. Instead, he demonstrated that value is subjective, born entirely from the human mind, individual choice, and the ranking of personal needs.

In a sense, Menger completed the liberation of the economic subject. He proved that economics is not a mechanical study of material production, but a dynamic science of human action.

To understand the market today, we must look at it through the lens Menger gave us: a beautifully complex order driven by human mind and purpose.