Carl Menger · 1871
Principles of Economics
Translated by James Dingwall & Bert F. Hoselitz · Ludwig von Mises Institute edition
Eight chapters building from the nature of goods to the spontaneous emergence of money. Select a chapter below to begin reading.
The General Theory of the Good
Establishes the concept of goods, their causal connection to human needs, the hierarchy of orders (first-order goods → higher-order goods), and the law of goods-character.
Economy and Economic Goods
Introduces 'economizing' as the process of allocating scarce goods to meet needs. Distinguishes economic from non-economic goods based on scarcity relative to requirements.
The Theory of Value
The core of Menger's contribution: subjective marginal utility. Value is determined by the importance of the least significant need a good satisfies — the "marginal" principle.
The Theory of Exchange
Demonstrates that voluntary exchange occurs only when both parties gain. Establishes the limits of exchange based on subjective valuations and diminishing utility.
The Theory of Price
Derives price formation from the exchange process under isolated exchange, monopoly, and bilateral competition. Prices emerge from individual valuations, not cost of production.
Use Value and Exchange Value
Distinguishes goods valued for direct use (use value) from those valued for what they can obtain in exchange (exchange value), and how these relate within the theory of value.
The Theory of the Commodity
Introduces marketability (Absatzfähigkeit) — how different goods vary in how easily they can be sold. The groundwork for understanding money as the most marketable good.
The Theory of Money
Money emerges spontaneously as the most marketable commodity — no authority needed to create it. The most liquid goods naturally become money through market processes.