Eugen Schmalenbach, Austrian economics, and German business economics
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Eugen Schmalenbach, Austrian economics, and German business economics Michael Olbrich 1 & David J. Rapp 2,3
& Florian
Follert 1
# Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Eugen Schmalenbach was one of the founding fathers of business economics theory in the German-speaking world in the first half of the twentieth century. While Mises mentions or discusses Schmalenbach’s work several times and Schmalenbach refers to, for example, Menger and Böhm-Bawerk, his opus and its significance for Austrian theorizing is largely ignored by today’s Austrian scientific community. This fact is astonishing given that Schmalenbach’s work smoothly integrates with and, even more importantly, enhances the reach of Austrian theory into the field of business economics, particularly with regard to the vast field of economic calculation. Based on Austrian insights, Schmalenbach published extensive approaches to both retrospective and anticipatory monetary calculation that serve the entrepreneur in making decisions on the use of scarce resources and in assessing the success of such decisions ex post. Hence, he operationalized Austrian economic calculation to enable the individual entrepreneur to concretely exercise it in his routine course of business. The conceptual ideas of Schmalenbach are cornerstones of PrussianGerman business economics (Betriebswirtschaftslehre) which has been taught in universities and business schools in German-speaking countries for more than a century now. This paper, therefore, aims to introduce the Austrian community to Schmalenbach’s work, to emphasize its significance for the advancement of Austrian theorizing, and to illustrate the close relations between Austrian economics and German business economics. Keywords Eugen Schmalenbach . Austrian economics . German business economics .
Economic calculation . Capital accounting . Cost accounting JEL classification B25 . M21 . M41
* David J. Rapp david.rapp@imt–bs.eu Extended author information available on the last page of the article
M. Olbrich et al.
1 German business economics and the Austrian school At the end of the nineteenth century, the scientific community of economists in the German-speaking world witnessed a clash between the Prussian-German Historical school and the Austrian school that lasted for more than two decades. Their Methodenstreit, from which the Austrian side emerged the distinct winner, is well known in the literature both on the origins of Austrian economics and on the history of economic thought in general (Schumpeter 1966: 814–815, Taylor 1970: 10–11, Bostaph 1994, Herbener et al. 1998: vii, Yagi 2011: 48–58, Boettke et al. 2016: 201, 206). However, Austrians today are largely unaware that another Prussian-German Economic school is closely associated with the Austrian school, namely the school of business economics (Betriebswirtschaftslehre). Unlike the Historical school, its representatives did not reject the Austrian approach but adopted it fully, realizing how apposite it was for their own s
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