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Eugen Schmalenbach, Austrian economics, and German business economics

Author

Listed:
  • Michael Olbrich

    (Institute of Auditing, Saarland University)

  • David J. Rapp

    (Law, Economics, and Finance Department, Institut Mines-Télécom Business School
    Research Lab LITEM, Université Paris-Saclay, Univ. Evry, IMT-BS)

  • Florian Follert

    (Institute of Auditing, Saarland University)

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 Prussian-German 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.

Suggested Citation

  • Michael Olbrich & David J. Rapp & Florian Follert, 2022. "Eugen Schmalenbach, Austrian economics, and German business economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(2), pages 205-233, June.
    • Handle: RePEc:kap:revaec:v:35:y:2022:i:2:d:10.1007_s11138-020-00520-x
    DOI: 10.1007/s11138-020-00520-x
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    References listed on IDEAS

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    More about this item

    Keywords

    Eugen Schmalenbach; Austrian economics; German business economics; Economic calculation; Capital accounting; Cost accounting;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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