Auspitz, Rudolf, and Lieben, Richard
Auspitz, Rudolf, and Lieben, Richard
The work of Rudolf Auspitz (1837–1906) and Richard Lieben (1842–1919) constitutes the sole mathematical contribution of the early Austrian school. As a matter of fact, Untersuchungen über die Theorie des Preises (1889) must be considered the most important early mathematical work in economics in German, after the signal contribution of von Thünen.
The authors of this pioneering work were practical men of affairs from the Jewish upper middle class of the Austro-Hungarian Empire (Winter 1927). Auspitz was a sugar magnate and a member of parliament, Lieben the head of a well-known banking house. Their general position in society and their great analytical power in economics suggest a comparison with Ricardo (Hutchison  1962, p. 189).
Auspitz and Lieben’s main contribution to price analysis is in the field of partial equilibrium. (General equilibrium is treated in an appendix.) They utilize total and marginal (but not average) curves, and most of the discussion is in terms of diagrams. They must be considered independent originators of the concept of indifference curves. They also utilize the concept of consumers’ surplus. Like Jevons, they have the idea of disutility of labor.
In their discussion of production they indicate certain dynamic problems connected with the holding of stocks, expectations, and speculation. Their discussion of monopoly and of market situations between free competition and monopoly suggests the theory of Pareto and much later developments in the field of imperfect or monopolistic competition.
Their work was sharply criticized by Menger (1871) and never exercised much influence within the Austrian school proper, which was fiercely antimathematical. But contemporary mathematical economists like Pareto (1892), Edgeworth (1889), and Irving Fisher (1892) were deeply influenced by the work of Auspitz and Lieben. Auspitz and Lieben also had an interesting discussion with Walras about the merits and limitations of partial analysis (Walras 1890; [1874–1877], pp. 483–487 in the 1900 edition). This method is similar to that of Marshall (1879).
One of the greatest later Austrian economists has explicitly recognized their merit (Schumpeter 1954, p. 844). The judgment of a contemporary British historian of economic doctrines is: “…No work of our period, not even Marshall’s or Pareto’s, contains a greater number of precise and original contributions to the pure analysis of the individual consumer and firm, and to the clarification of the main assumptions on which this analysis has since been seen to rest” (Hutchison  1962, p. 189).
[For the historical context of Auspitz and Lieben’s work, see the biographyJevons. For discussion of their ideas, seeEconomic equilibrium; Utility; and the biographiesEdgeworth; Fisher, Irving; Pareto; Walras.]
1889 Untersuchungen über die Theorie des Preises. Leipzig: Duncker & Humblot. By Auspitz and Lieben.
1890 Die klassische Werttheorie und die Theorie vom Grenznutzen. Jahrbücher für Nationalokönomie und Statistik 55:288–293. By Auspitz.
1894 Der letzte Maasstab des Güterwertes und die mathematische Methode. Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung 3:489–511. By Auspitz.
1908 Die mehrfachen Schnittpunkte zwischen der Angebots- und der Nachfragekurve. Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung 17:607–616. By Lieben.
Edgeworth, Francis Y. 1889 On the Application of Mathematics to Political Economy. Journal of the Royal Statistical Society 52:538–576.
Hutchison, Terence W. (1953) 1962 A Review of Economic Doctrines, 1870–1929. Oxford: Clarendon.
Marshall, Alfred (1879) 1930 The Pure Theory of Foreign Trade and The Pure Theory of Domestic Values. Series of Reprints of Scarce Tracts in Economic and Political Science, No. 1. London School of Economics and Political Science.
Menger, Karl (1871) 1950 Principles of Economics. 2d ed. Translated and edited by J. Dingwall and B. F. Hoselitz. Glencoe, III.: Free Press. → First published as Grundsätze der Volkswirtschaftslehre.
Pareto, Vilfredo 1892 La teoria dei prezzi dei signori Auspitz e Lieben e le osservazioni del professore Walras. Giornale degli economisti: Rivista mensile degli interessi italiani 4:201–239.
Schumpeter, Joseph A. 1930 Rudolf Auspitz. Volume 2, page 317 in Encyclopaedia of the Social Sciences. New York: Macmillan.
Schumpeter, Joseph A. (1954) 1960 History of Economic Analysis. Edited by E. B. Schumpeter. New York: Oxford Univ. Press.
Walras, LÉon (1874–1877) 1954 Elements of Pure Economics; or, the Theory of Social Wealth. Translated by William Jaffé. Homewood, III.: Irwin; London: Allen & Unwin. → First published in French as Élements d’économic politique pure.
Walras, LÉon 1890 Observations sur le principe de la théorie du prix de MM. Auspitz et Lieben. Revue d’économic politique 4:320–323.
Weinberger, Otto 1931 Rudolf Auspitz und Richard Lieben: Ein Beitrag zur Geschichte der mathematischen Methode in der Volkswirtschaftslehre. Zeitschrift für die gesamte Staatswissenschaft 91:457–492.
Weinberger, Otto 1933 Richard Lieben. Volume 9, pages 451–452 in Encyclopaedia of the Social Sciences. New York: Macmillan.
Weinberger, Otto 1935 Rudolf Auspitz. Volume 8, pages 37–44 in Neue österreichische Biographic, 1815–1918. Vienna: Amalthea Verlag.
Winter, Josefine 1927 Fünfzig Jahre eines Wiener Hauses. Vienna: Braumüller.
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