The Social Theories of Classical Political Economy and Modern Economic Policy
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This is the first-ever English translation of an 1891 essay by Carl Menger published in the most important newspaper of the Habsburg Empire, the Neue Freie Presse. Menger writes the piece as a defense of classical political economy in general and of Adam Smith in particular, focusing on misinterpretations of Smith’s work by the Younger Historical School in Germany. The essay reveals that Menger saw himself as working in a liberal tradition going back to Smith and classical political economy, rather than as a marginalist revolutionary who broke with classical political economy. It is a rare instance where Menger, holding the chair of economic theory at the University of Vienna, publicly expresses recommendations on economic policy. The essay represents Smith and the other classical political economists as socially motivated scholars concerned with just reforms to benefit ordinary people. Menger argues that the classical political economists were inclined toward liberal reforms but were by no means rigid exponents of laissez-faire. The essay is preceded here by an introduction authored by the translators Erwin Dekker and Stefan Kolev.
Podcast related to this article: Erwin Dekker on Carl Menger on Adam Smith (EJW Audio, September 2016).