Decision Making under uncertainty: a Mengerian analysis





Hayek noted that Menger was the first to base the distinction between free and economic goods on the idea of scarcity. Notwithstanding this, Menger’s contribution concerning the role of uncertainty seems to be mostly ignored in the literature. The paper argues that Menger in fact designated the place of uncertainty as a key condition to shaping human economic activities, alongside scarcity I have also attempted to provide a reconstruction of the role of uncertainty in the Mengerian theoretical system based on the underlying and sometimes embryonic thoughts of Menger. The paper clarifies that Menger broke with earlier economic thinking and did not employ uncertainty to explain and justify profit. Finally, the paper reconstructs Menger’s Janus-faced human actor based on the two different characterizations of human economic action by Menger. The paper argues that the metaphor of “creative destruction” is a misleading one. The Mengerian position is that creativity trumps destruction.


Arnaert, B. (2022) “The Two Ludwigs: Mises, Lachmann, and the ongoing Methodenstreit in the Austrian School of Economics”, Ph.D thesis. Mimeo.Blaug, M. (1962) Economic theory in retrospect. 1985th edn. Cambridge: Cambridge Uniersity Press.Boettke, P.J. and Candela, R.A. (2022) “Monitoring, metering and Menger: A conciliatory basis for a genuine institutional economics”, The Review of Austrian Economics [Preprint]. Available at:, P.J. and Coyne, C.J. (eds) (2015) The Oxford handbook of Austrian economics. Oxford ; New York: Oxford University Press.

Cantillon, R. (1755) An Essay on Economic Theory. 2010th edn. Auburn (Alabama): Ludwig von Mises Institute.Hayek, F. (1934) “Introduction”, in Menger, Carl: Principles of Economics. 2007th edn. Auburn (Alabama): Mises Institute, pp. 11–37.

(1945) “The Use of Knowledge in Society”, American Economic Review, XXXV(4), pp. 519–530.

Huerta de Soto, J. (1998) “The Ongoing Methodenstreit of the Austrian School”, Journal des Economistes et des Etudes Humaines, 8(1 Mars), pp. 75–113.

(2010) Socialism, Economic Calculation and Entrepreneurship. Edward Elgar.

Jaffé, W. (1976) “Menger Jevons and and Walras Dehomogenized”, Economic Iquiry, 14(4), pp. 511–524.Kirzner, I.M. (1978) “The entrepreneurial role in Menger’s system“, Atlantic Economic Journal, 6(3), pp. 31–45. Available at:, F. (1921) Risk, uncertainty, and profit. New York: August M. Kelley. New York: A. M. Kelley.Menger, C. (1871) Principles of economics. 2007th edn. Auburn, Ala.: Ludwig von Mises Institute.Mises, L. (1949) Human Action. A Treatise on Economics, Scholar’s Edition. 1998th edn. Auburn (Alabama): Mises Institute.Minsky, H. (2008) John Maynard Keybes. New York: McGraw Hill.Polanyi, K. (1944) The Great Transformation. 2010th edn. Boston: Beacon Press.Rizzo, M. (1979) Time, Uncertainty, and Disequilibrium. Toronto: Lexington Books.Robbins, L. (1932) An Essay on the Nature and Significance of Economic Science. 1945th edn. London: MacMillan.Rothbard, M. (1995) Classical Economics vol. II. Auburn (Alabama): Ludwig von Mises Institute.Schumpeter, J. (1934) The Theory of Economic Development. 2008th edn. New Brunswick, New Jersey: Transaction Publishers.

(1943) Capitalism, Socialism and Democracy. 1976th edn. London and New York: Routledge.

Schumpeter, J.A. (1954) History of Economic Analysis. 1981st edn. London and New York: Routledge.

Shackle, G. (1972) Epistemics and Economics: A Critique of Economic Doctrines. Transaction Publishers.Smith, A. (1776) An Inquiry into the Nature and Causes of the Wealth of Nations. 1904th edn. London: Meuthen Co./Liberty Found.Stigler, G. (1937) “The Economics of Carl Menger“, Journal of Political Economy, 45, pp. 229–250.Streissler, E. (1969) “Structural Economic Thought On the Significance of the Austrian School Today“, Zeitschrift für Nationalokönomie, 29, pp. 237–266.

(1972) “To What Extent Was the Austrian School Marginalist? “, History of Political Economy, 4(2), pp. 426–441.

Tóth, A. (2021) “Los fundamentos mengerianos de la Escuela Austriaca de Economía y la Teoría Austriaca del Ciclo Económico: vínculos y controversias“, Procesos de Mercado, XVIII(1 Primavera), pp. 123–160.Weber, M. (1922) Economy and Society. 1978th edn. Berkeley: University of California Press.White, L. (1977) The Methodology of the Austrian School Economists. 2003rd edn. Auburn (Alabama): Ludwig von Mises Institute.Wieser, Friedrich (1914) Social Economics. 1927th edn. New York: Adelphi.




How to Cite

TÓTH, A., & B. JUHASZ, J. (2023). Decision Making under uncertainty: a Mengerian analysis. REVISTA PROCESOS DE MERCADO, 20(1), 33.