Here is the book that gave the Austrian School its name.
The famed Methodenstreitof the late 19th century was the battle of method. It pitted the emerging Austrian School against the German Historical School over a critically important question: what is the proper way to do social science? Here Carl Menger, the founder of the School, vindicates the importance of theory, and lays the foundation for later developments by Mises and others. The book was written twelve years after his principles book, and it sought to deal with the hostility with which that book was greeted in the German world. Menger argues that economics can and must be more than an effort at observing, collecting, and assembling data. It can make general observations about the laws of economics that operate independently of time and place.
Joseph Salerno writes: "The Investigationsprecipitated a furor among German economists who heatedly responded with derisive attacks on Menger and the Austrian School. In fact, this latter term was originated and applied by the German Historicists in order to emphasize the isolation of Menger and his followers from the mainstream of German economics."
No Austrian can overlook this very important treatise on method. This edition includes an introduction by Lawrence White that frames up the debate over method in light of modern trends in economic theory.
This book represents the first great intellectual debate of the Austrian School. Menger's offensive against the German Historical School is devastating. However, I do feel sorry that Menger had to waste his time refuting such obviously flawed ideas. He truly does state the obvious, so I'm not sure if the reader will cover any new ground here. Still, this book does lay the foundation for the Austrian School's method. It can also be an interesting read if you remember to put the argument in its historical context.
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