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The Austrian school of economics was founded in 1871 with the publication of Carl Menger's Principles of Economics. In his book, Menger argued that economic analysis is universally applicable and that the appropriate unit of analysis is man and his choices. These choices, he wrote, are determined by individual subjective preferences and the margin on which decisions are made. The logic of choice, he believed, is the essential building block to the development of a universally valid economic theory. The home of the field moved first to Britain and then on to the US and at present, a diverse mix

The Austrian school of economics is an unorthodox approach to economics whose adherents have mostly been libertarian in their political outlook. This dissertation explores the connections between Austrian economic theory and libertarian political philosophy, and casts doubt on the claim often propounded that Austrian economics itself naturally leads to libertarianism. Instead it is claimed here that Austrian economics is an open-ended theory that can lead to very different political conclusions, depending on the normative principles with which it is combined. Therefore it is crucial to analyze both the economic theory and the ethics of any political thinker of the Austrian school, and the bulk of the analysis must lean on the latter since the economic theory itself does not lead to the types of libertarianism that is put forward by the most famous economists and philosophers of the Austrian school. The ethical theories of four Austrian school proponents are analyzed in this dissertation: Ludwig von Mises, F. A. Hayek, Murray Rothbard and Hans-Hermann Hoppe. The conclusion is that there are several problems with their theories, although the problems are of different kinds, ranging from metaethics to empirical application and operationalization.

Introduction -- Money -- The functions of money and money creation -- The nature of inflation -- The concept of interest -- The order of money and its consequences -- Blueprints for monetary reform -- Finance -- Debt and ownership -- The building blocks of modern finance -- The failures of modern finance -- How modern finance has contributed to financial crises -- Building blocks of a theory of austrian finance -- From theory to practice- applications of austrian finance -- Epilogue

After the most recent financial crisis it has become clear that there exists a crisis also in economics as a science. The prevailing paradigms have failed to anticipate and to understand the financial crisis. New approaches are therefore needed. Of particular interest should be approaches that combine insights from those parts of economics that are largely neglected by the mainstream. Hendrik Hagedorn presents a model that synthesizes elements of Austrian, post-Keynesian, and evolutionary economics. Thus, an economic paradigm is developed that challenges neoclassical economics as a whole. Hendrik Hagedorn is a physicist and an economist. He works at an institute for applied economic research in Germany.

Henry George has been widely pigeonholed and dismissed as a singletaxer. Actually, he was a profound and original economist. He independently arrived at several of the most characteristic insights of the 'Austrian' School, which is enjoying a revival nowadays. Yet George scorned the Austrians of his time, and their present-day successors show scant appreciation of his work. An apparent lapse in intellectual communication calls for repair.