Contributory Role of Richard Cantillon, A R J Turgot and Jean-Baptiste Say Towards Austrian Economics - Essay Example

? “Contributory Role of Richard Cantillon, A R J Turgot and Jean-Baptiste Say Towards Austrian Economics” Introduction The economics that is studied today has a long history and certainly transforms through a number of phenomenal episodes. One of such inevitable episodes in the history of economics can be illustrated with due reference to the Austrian School. It was in the early fifteenth century when a group of experts and their followers began to emphasize on the process of depicting and quantifying the human actions with the guidance of specific trends. These trends and the explanations of those were further described as theories. Notably, it was in this era that academicians observed human actions to be executed in a law as a reaction towards situational changes. These laws were found to be more apparent amid people when transacting with monetary values (Schulak & Unterkofler, 2011). Notably, the Austrian School can be recognized as one of the foundations of European economic schools of thought. The European schools of thought are often noted to be based on two contradictory dimensions among which one is the Austrian School and the other is the German Historical School (Taylor, 1980). Similar to other stream of theories focusing on the human characteristic and nature, the theoretical emulsion of Austrian School happened through various phases and stages presenting new challenges for the then economists to manipulate into comprehensive, structured and rationale methodologies. Certainly, the then economists were few of the early academicians with insignificant theories to develop relevant methodologies and thus had to depend on their understandings, perceptions and theoretical knowledge. Moreover, the economists during that time period considered the value of theories to be more relevant and beneficial than referring to the historical courses. This led to numerous contradictory view points as concluded by the then economists and thus rendered a mixed and widely diverse explanation of the economic activities. It is in this context that modern economists grew conscious regarding the need of a generally accepted framework to theoretically describe the economic methodologies, lack of which can result to similar contradictions as was noticed in the case of Austrian School. It is quite noteworthy in this context that the challenges faced by Austrian economists during the development phases of Austrian School was far more greater than the challenges faced by contemporary economists with due consideration to the then economic philosophy. Furthermore, it is due to this reason that the contribution of economists in developing the Austrian School was recognized to be inevitable and highly appreciable (Gloria & Palarmo, 1999). However, only a handful of economists consider themselves as a part of Austrian School providing larger focus on the criticism of the methodologies presented by Austrian economists (Holcombe, 1999). The relationship existing between the contemporary economic values and traditional economic values with regards to Austrian School tends to be quite distinct. As was noted by Holcombe (1999), even though the modern economics methodologies tend to criticize the Austrian School from various perspectives considering its applications in the academic as well as in public policy making, the contemporary beliefs and theories are becoming increasingly similar to that of the Austrian School. However, it is certainly neither with due consideration nor as a result of the influence perceived by the Austrian economists. It is also not due to the changes occurred in the Austrian School. From an in-depth point of view, the inclination of modern economics towards Austrian School can be observed as the changes occurring in the contemporary economic methodologies. In other words, the perspective of modern economists are emerging to be more similar to the methodologies presented in the Austrian School but in a complex and furthermore in a practical manner (Holcombe, 1999). Multiple researches can be obtained with references to the study of modern economists over a few past decades which are mostly based on the comparison of Austrian economics and modern economics. It is worth mentioning that these researches mostly concentrated on the shortcomings of the methodologies presented in the Austrian School and paid zero or insignificant emphasis on the virtues that the school had on today’s sophisticated economic theories. This paper is intended to be one of those researches which will emphasize on the contribution of Austrian economics relative to the modern understanding of economic activities executed by human beings. With this concern, the paper will further intend to demonstrate the contributions made by three distinct economists, namely Richard Cantillon, A. R. J. Turgot and Jean-Baptiste Say. Describing the contribution of these phenomenal economists, the study will further aim at assessing the development of Austrian School and its uniqueness with regards to the various influencing factors that influenced the then economic methodologies to a large extent. Overview of the Austrian School Presently, the Austrian School has emerged as a highly debatable topic amid the cotemporary economists all around the world. The methodologies presented in this school are criticized on the basis that the methodologies or explanations suggested by then economists merely provided a brief of the human activities in relation to economic cycle. However, these methodologies were once considered to be of immense value and played a vital role in the development of economic theories. The fact is worth mentioning that even though the Austrian School’s beliefs are criticized in the current century, there are a considerable number of economists who are observed to be compassionate regarding the traditional methodologies presented by the Austrian Economists. It is due to the reason that despite of having numerous shortcomings, the beliefs of Austrian School indicated the need of economics and also presented an overview of the dimensions on which today’s economic thoughts are based on (Holcombe, 1999). The Austrian School thoughts are noted amongst the earliest beliefs of the economics studies and thus possess uniqueness in its methodology. It is in this context that Austrian school of economics is referred to as quite different in terms of beliefs and ideas from the modern school of thoughts in economics. One of the principal reasons for this uniqueness can be regarded as the external influences that have always created a major impact on the beliefs amid the early Austrian economists. For instance, during the early configurations of the Austrian economics, the personal beliefs and knowledge transferred from various parts of the world was observed to have a substantial affect over the judgmental principles of the then Austrian economists. Moreover, the theories and laws explained by every economist during that era differed from each other which presented a complex and perplexed elaboration of economic thoughts (Salerno, 2002). It is due to this reason that the economic thoughts presented in the then era by Austrian economists lacked in many terms. As noted by Salerno (2002: 111), “Since human beings are not disembodied minds...every scientific movement, if it is to flourish and advance, requires an institutional framework”. These kinds of errors are certainly not quite unique and new to the evolution of Austrian School. It is worth mentioning in this context that Austrian School is often related to the micro-economic theories as explored by the early Austrian Economists. The origin of Austrian School can be identified in the early 1870s. Currently, the explanations and laws suggested by the Austrian School are highly debated amid the modern economists, on the basis of the lacuna which are possessed by this school in defining or explaining the current incidents or human actions and monetary flows (Butler, 2010). However, it is of no doubt that the early convention of the Austrian School and economists have rendered a significant and inevitable understanding of the modern economics which in turn has facilitated the accuracy as well as diplomacy of the microeconomic theories. The participation of the then Austrian economists is also noteworthy in respect to the understanding rendered by the Austrian School. Many economists have gradually introduced and declined in the history of Austrian School marking their contribution to the thoughts of this school in understanding the microeconomic functions. For instance, Juan De Mariana, Frederic Bastiat, Henry Hazlitt, and F. A. Hayek among others are a few of the most significant names in the chronological development process of Austrian economics (Holcombe, 1999). These economists had their unique and valued contributions to the history and development of Austrian School. Various theories and explanations to the economic relationships had been introduced in the phase of development relative to Austrian School. For instance, Ludwig von Mises introduced a distinctive methodology to the Austrian School titled as Praxeology. Even though this methodology was considered as quite valuable and one of the base methodologies in the Austrian Economics during the early period, with due course of time modern economists observed this methodology to be irrelevant which thus led to the strong criticism of the Austrian School. To be precise, the Praxeology methodology emphasized that human beings act towards a specific goal. It is in this context that Praxeology methodology intended to neglect other influencing factors which can certainly have a strong impact on the human actions towards the achievement of a determined goal (Rothbard, 1997). There were many other similar methodologies which acted as foundations for the contemporary and complex economics methodologies, even so are highly criticized by the modern economists (Holcombe, 1999). The Contributions of Three Major Economists Richard Cantillon Richard Cantillon is widely considered to be one of the earliest economists of the world and certainly one of the most influential Austrian economists. Richard Cantillon was born on 1697 in Ireland. By profession, he was a banker who had started his career in Paris and later shifted to Holland. In his career he was also observed to actively participate against John Law financial scheme. In his later career, Richard Cantillon wrote his only published book named ‘Essai sur la Nature du Commerce en General’. In his short career Richard Cantillon travelled in various places of Europe including Ireland, England, and France. The experience gathered from the travel was then put together by Richard Cantillon in his only published book after almost 20 years of his mysterious death in 1734. The book was a secret until 1755 and soon after it was published, the book caught the attention of the then economists. Notably, the contradictory view points of the then Austrian economists created a substantial impact over the significant of this book when the analysts and critiques began reviewing the article based on their perceived values. However, the book earned its justified recognition on the basis of its contribution towards the early economic methodologies after William Stanley Jevons published a review of the book in the year 1881 referring Richard Cantillon’s work as "The first systematic Treatise on Economics" and also as "the Cradle of Political Economy" (Karstensson, 1996). As was noted by Thornton in Holcombe (1999), the involvement of Richard Cantillon in the John Law financial scheme was one of the most significant virtues that this early economist had attained and reflected in his only published book. The contribution made by Richard Cantillon was also valued by Murray N. Rothbard referring him as “the founding father of modern economics”. However, it is worth mentioning that the work of Richard Cantillon was not only valued but often underestimated and misinterpreted by critiques which in turn diminished the value of his contribution to the Austrian School. Adam Smith was one of such interpreters who intended to render value and worth to the work of Richard Cantillon, but unfortunately misunderstood the writing. Hence, during the classic economics phase, the value of Richard Cantillon’s work was somewhat forgotten or rather overlooked by the analysts and the then rising economists (Holcombe, 1999). Fortunately, with a new perspective and fresh commence the work of Austrian economists was recently taken into consideration where researchers and followers of Austrian School initiated to reconsider the work of these early economists. For instance, Thornton (2006) further stated that Richard Cantillon was amongst the early thinkers who were successful in examining the capitalistic economy and its cyclical nature. The influence of the then environmental structures and fluctuations were also observed to be on immense significance in this context. Notably, Richard Cantillon belonged to a period when the economic institutions developed as fully capitalistic. During this period the industries demonstrated and witnessed a complete business cycle which perhaps, might have created a significant impact over the study of Richard Cantillon influencing him to become one of the earliest economists to identify the cyclical manner of a perfect capitalistic economy. In addition, Thornton (1996) stated that Richard Cantillon were also one of the earliest economists who was able to identify and also define the concept of opportunity cost (Thornton, 2006). Later, in the neo-classical period, Schumpeter (1956: 209) also noted the introduction of opportunity cost by Richard Cantillon as quite significant. This further facilitated the modern economic methodologies in demonstrating a unique but practical definition of human actions when given with choices to attain a particular determined goal. Other than these discoveries the contribution made by Richard also extended to other diverse topics including population, international trade, money, and price-specie-flow mechanism among others (Thornton, 2006). The influence of his surroundings and the then environmental fluctuations were also quite apparent in the study of Richard Cantillon. As stated by Thornton in Holcombe (1999: 15), “The Essai follows a progressive arrangement of ideas appropriate....also shows many links to Cantillon's own life”. This can be apparently witnessed with reference to his book. For instance, in his book while depicting the pre-capitalistic market is demonstrated relating the situations with his family’s heritage and later focusing on the hardships faced by farmers and last but not the least, by the mercantilists (Holcombe, 1999). Hence, it can be apparently observed that even though the contribution by Richard Cantillon is small, it is certainly not inevitable as it depicted the theoretical aspects of microeconomics to be interrelated strongly with the real life scenario. It is worth mentioning in this context that the role played by Richard Cantillon was highly debated amid the economists and thus provided a perplexed description of his contributions as an early economist of Austrian School. For instance, as noted by Thornton (2005), Richard Cantillon was often considered as a Mercantilist in lieu to his inclination towards Mercantile. In his study Richard Cantillon depicted that money, trades and interests rates were in real terms ‘well-controlled’ and stable factors when presented in their natural state or when undisturbed. It was actually the government’s influence and participation in regulating the trade and flow of money by imposing interest rates and other trade regulations, which created a substantial impact over the wealth in a particular region. This view point presented by Thornton (2005) contradicted with the then belief of the government that Mercentilists are the sources of wealth and they should be controlled to extract more wealth for the economy. This was indeed a revolutionary contribution forwarded by Richard Cantillon. In the similar context, it is worth mentioning that a few economists also debated on the consideration whether Richard Cantillon was truly a contributor to Austrian Economics. For instance, Hebert (1985) stated that there is a considerable perplexity in discussing whether Richard Cantillon was compassionately an Austrian Economist owing to the fact that his study was published almost 150 years before the date which is considered to be the beginning year of Austrian School. Although, it was once again introduced in the year 1881 by the emerging economists of the Austrian School, the role played by Richard Cantillon becomes a highly debatable topic relative to this context. On the other hand, Thornton in Holcombe (1999) noted that even though the complete recognition of Austrian economics took place in the 1880s, its origin lay back in the fifteenth century when the study of Richard Cantillon was conducted and published. With due consideration to this fact it can be stated that Richard Cantillon was indeed a noteworthy revolutionary contributor of the Austrian School playing a vital role towards the origin of economic methodologies. A. R. J. Turgot Anne Robert Jacques Turgot’s valuable and deliberate efforts in the study of economics were quite notable. He made a significant effort towards Austrian economics alike other influential Austrian economists. He belonged to a well known Norman family in Paris and was simply dedicated to various working activities. As a student, Turgot possessed a sparkling career and his academic interests were wide ranging. As was stated by himself, he used to utilize most of his free time in reading and writing not only in the field of economics but also in the field of history, literature and the natural sciences (Anne Robert Jacques Turgot, 2011). The paper i.e. “Value and Money” which was published in the year 1769 was one of the important deliberate efforts of Turgot that he made towards Austrian economics. In this connection, Turgot initialized a kind of Austrian-type theory that is based upon Crusoe economics, which initially started from one person to two person exchange and then finally transformed to an absolute market i.e. the participation of the members or the individuals in the market economy gradually increased. Anne Robert Jacques Turgot (2011), in his theory, further stated that the idea regarding the “comparison of value” alters constantly with the requirement of the person and duly concentrating on the ‘law of diminishing utility’ along with possessing a higher expectation regarding the acceptance of the theory as he emphasized mainly upon every individual unit of the particular goods that affected the market economy to a certain extent. Turgot then progressed to a major discussion towards contemporary focus on economics regarding the distribution of insufficient resources in order to attain the satisfaction of the needs perceived by the individuals in a commodity market. This particular theory of Turgot regarding the value, exchange and price eventually led remarkable contribution in Austrian economics (Anne Robert Jacques Turgot, 2011). Rothbard (2006), observed that another major contribution of Turgot towards the economics of Austria was in the fact of his propounded economic theory of ‘capital’, ‘entrepreneurship’, ‘savings’ and ‘interest’ which remarkably boomed in the British classical economy as well as the Austrians. Turgot pointed out that the factor of unconsumed and saved annual produce is the ultimate mean of accruing wealth. At the same time, savings are collected in financial terms and then utilized for making expenditure upon different types of principal goods. It was further noted by Rothbard (2006) that Turgot emphasized in making the analysis towards borrowing and spending of money. According to Turgot’s theory, the money that is borrowed by the customers to use ultimately gets circulated amid the various segments of the market. Similarly, if the money is borrowed by the entrepreneurs, the money would be transferred into advances and investment and thus the money once again gets circulated. The main logic behind this particular theory of Turgot was in the fact that the valuable money which is used or collected is therefore not misplaced but gets circulated. Furthermore, according to Rathford in Holcombe (1999), Turgot also pointed out that if the increased savings withdrew a small amount of money from the circulation for a certain period of time, the expenditure on production will be lowered and the lower price of the produce will be more than the compensation for the entrepreneur by the raised advances. His one of the noteworthy and largely prominent contributions was mentioned in the writings of the book ‘Paper on Lending at Interest’ (1770), in which Turgot enhanced his significant principle of interest. In this book, he deeply emphasized upon the major difficulties regarding the interest factors. In lieu of this, his main attention was to find a logic regarding the borrowers who are ready to pay the interest premium for the use of money. He added that in a loan transaction, the primary concern would be the promised value compared to the money value that is available now rather than the value of money that is loaned which has to be reimbursed (Rathford, 1999). Thus, the above mentioned discussions of various principles and theories designed by Turgot led him to notably contribute towards Austrian economics. According to Salerno (2010), the other crucial contribution of Turgot laid in its propounded theory of money. In his propounded theory of money, Turgot defines money as a necessary intermediate of exchange and the unit in which relative prices are expressed. He also pointed out that this particular definition of money serves as a universal assessment of all values in which all prices are expressed. Thus, according to his theory, money essentially originates as a useful commodity from within the market economy itself. In this regard, Turgot declared that “it is not at all by virtue of a convention that money is exchanged for all the other values and it is itself an object of commerce along with form of wealth” (Salerno, 2010). In his incomplete article on “Value and Money”, Turgot emphasized his money principle and declared that money is a kind of speech that brings various forms of usual things into a general and ordinary term or standard. He also stated that money are made of the same materials and varies or differs based on the units of the currency (Salerno, 2010).Rothbard in Holcombe (1999) stated that there exist various types of money among which ‘real money’ consisting coins and metal pieces that are indicated by inscriptions and the other which act as an element of account i.e. ‘fictitious money’ are significant among others as the concept provided by Turgot. He also spotted out that the real moneys that are available in the world are not just one metal but it also consists of gold and silver among others. It was firmly believed that the comparative values of gold and silver on the market will differ according to the comparative insufficiency of gold and silver in the various nations. This wide knowledge and conception regarding the theory of money led Turgot to make significant contribution to Austrian economics. It has been recognized by Cannan (1964), that the theory and principle of value exchange and price, capital, entrepreneurship, savings and interest along with the theory of money that are propounded by Turgot, the other major contribution of Turgot towards Austrian economics laid in his theory of ‘production’ and ‘distribution’. Turgot in Holcombe (1999) pointed that his principle of production was based on the feature of ‘physiocrats’ which implies that it will be useful especially for the agricultural purposes. In lieu of this there should prevail a simple and well structured imposition of tax policy on land. In lieu of this, Turgot’s theory of production was quite different from that of ‘physiocracy’. Turgot realized that though his principle of production was based on the fact that it will be useful only for the agricultural purposes, he also readily accepted that the human labor must alter the available resources along with participating in every level of the production method. In contrast with his distribution process, Turgot emphasized and focused upon the ‘laws of diminishing returns’ with utmost importance in order to enhance the marginal productivity. Thus, A. R. J. Turgot’s propounded theory of value and money, production and distribution, capital, entrepreneurship, savings and interest which are discussed above collectively contributed notably towards Austrian economics (Holcombe, 1999). However, in lieu of the immense contributions made by Turgot towards Austrian economics, it was recognized by Rathford in Holcombe (1999) that Bohm-Bawerk who is the originator of Austrian “interest and capital theory” critically showed inequality towards Turgot’s various aspects of economic ideas. Bohm-Bawerk had shown his inequality regarding Turgot’s remarkable analysis of the principle of money and interest. Instead of admitting Turgot for his deliberate efforts towards the Austrian economic theory, Bohm-Bawerk roughly rejected or ignored Turgot and treated as a simple theorist of agricultural productivity. By focusing upon the negligence of Bohm-Bawerk towards Turgot, Schumpeter who is also a renowned economist greatly admired as well as supported the various theories and principles of Turgot that he presented to Austrian economics. It was also noted by Rathford in Holcombe (1999) that Schumpeter declared Turgot’s theory of price formation as almost perfect and also commented that Turgot’s “theory of capital, investment and saving” is the first graceful study of these matters and proved to be a noteworthy contribution to Austrian economics. By duly concerning with all these facts and comments, it can be stated that Anne Robert Jacques Turgot made major contributions to Austrian economics along with performing major role in the world of economics. Jean-Baptiste Say Jean-Baptiste Say was born in a town named Lyons situated in France. He belonged to a mediocre family with his early years in Geneva and London. He began his working life when he was 21 in commenting as well as writing upon political conditions of an economy and gradually became a principal organizer of the ‘Laissez-faire’ association. After the publication of Jean-Baptiste Say’s various editions of “Traite d economie Politique” in the year 1803 which consists Say’s organized treatment of tax issues, he eventually earned enormous fame and made a significant effect upon the Austrian economics (Economic Insights, n.d.). It has been identified in Brandly (2007) that the Austrians recognized the valuable contributions of Jean-Baptiste Say towards the field of economics along with his strong association with the Austrian School. Moreover, his great and deliberate efforts particularly in the areas of methodology, entrepreneurship, money, and value theory were also traced by the Austrians. Jean-Baptiste Say was renowned for his “Law of Markets”, in which an argument was discussed relating the conception of wealth which refers that it is a lack of production rather than the concept of “under-consumption” that is commonly termed as deficiency of “aggregate demand” in contemporary macroeconomics. Jean-Baptiste Say demonstrated that the factor of taxation not under-consumption is a crucial factor towards limiting production. However, his exceptional analysis of taxation based on economical structure contributed to Austrian economics (Brandly, 2007). In this connection one of the remarkable and noteworthy contributions of Jean-Baptiste Say towards Austrian economy laid in the introduction of his taxation structure. Brandly (2007), in lieu of Jean-Baptiste Say’s taxation structure, argues that the fundamental class struggles between the taxpayers and tax consumers. According to him, those individuals or person who gets benefited from the tax system ultimately exploited the taxpaying class. With this regards, Say concluded that there lies a probable chance for the different agents to make certain choices regarding exercising some sort of unfair measures in order to generate tax revenue (Brandly, 2007). It was further stated by Brandly (2007) that Jean-Baptiste Say’s ultimate goal for investigating various tax issues was to dismiss certain misleading ideas about the expected benefits of taxing along with government expenditure and to demonstrate that the public budget generally possessed certain negative effects upon the financial market economy. Initially, Jean-Baptiste Say recognized that the tax charges and the tax incomes are not linked to each other which were named as the ‘Laffer Curve’. The concept of “Laffer-Curve” implied that the tax charges and the incomes related to tax are not essentially as well as positively interrelated to each other. In this regard, according to him, the tax rate should be designed in such a sense that the only charges that should be considered should remain in the lower segment of the ‘Laffer Curve’. In some cases, where more than one tax rates will create the desired revenue, the lowest possible tax rates should always be chosen in order to attain a greater level of revenue in the long term. This particular aspect was included as one of the significant principles of taxation after being propounded by Jean-Baptiste Say which appreciably contributed towards Austrian economics (Brandly, 2007). According to Brandly (2007), Say also explained that the factor of taxation necessarily decreases the availability of capital in an economy. Say blamed the factor of taxation for reducing the productive capital, endangering production, decreasing in the wages of the workers and ultimately decreasing the general standard of living. This important point of Say’s explanation enthusiastically affected the Austrians and led Say’s theories of taxation to remarkably contribute towards the Austrian economics. In this regard, Say also added that the taxes not only decrease the prosperity by harming capital formation but also lowers the various adjustments towards changing market conditions (Brandly, 2007). The other major contribution of Jean-Baptiste Say towards Austrian economics laid in his discussion of money and banking. It has been noted in Holsmann (2008) that Say’s discussion of money was mainly based upon standard argument about the wants and necessities of the customers, the problem of the customers and how the problems of the customers can be solved through exchange medium. In this context, Jean-Baptiste Say reviewed that a medium of exchange should possess certain properties such as stability, consistency, superior buying power and divisibility. From this particular fact, Say draws a familiar conclusion that the expensive metals including silver and gold among others are excellent likings and preferences as monetary substances. With regard to banking, it has been observed by Sechrest in Holcombe (1999) that Jean-Baptiste Say differentiated between “deposit banks and circulation banks” and treated both the banks as lawful financial establishments. The functions of the “deposit banks” was acting as a warehouse for money, holding significant percentage of reserves at all times and providing security on behalf of the depositors while moving funds from one customer’s account to another. On the other side, the “circulation banks” acts as true financial intermediaries. In addition, the “banks of circulation” holds the functional reserves, deliver banknotes and creates an interest income by offering reduction in bills of exchange along with promissory notes. Furthermore, Sechrest in Holcombe (1999) stated that any nominal supply of money is ‘optimal’ as long as the prices are free to adjust because any increase or decrease in nominal terms will simply change the buying power. Thus, due to the above discussed facts, there will be no variation in money supply. This certain fact noted by Say also had a remarkable impact on Austrian Economics. Another crucial contribution of Jean-Baptiste Say towards the Austrian economics was the introduction of his ‘market law’. The principle of “Say’s Law of Market” which is related with the market theory is one of the key foundation bases of the classical school of economics. It has been recognized that the understanding of Say’s Market Law implies “supply creates its own demand” (Horwitz, n.d.). The main thought of Say’s Law of Market lies in the fact that the combined supply and demand of the products and services will always be equal at full level of employment. Sechrest in Holcombe (1999) traced that Jean-Baptiste Say expressed a clear understanding that his law of market is completely favorable for the society to the incident of generally falling prices which ultimately affects into gaining productivity. Jean-Baptiste Say firmly believed that if the businesses can produce different products then they can also sell those products and can raise the demand for the products (Horwitz, n.d.).Thus, Jean-Baptiste Say’s market law had a noteworthy contribution towards Austrian economics. In addition, Jean-Baptiste Say’s propounded theory of law of markets, tax structure, money and banking collectively contributed appreciably towards Austrian economics. However, according to Economic Insights (n.d.), it was observed that few propositions in the history of economics have been broadly debated Says’ argument regarding the theory of supply and demand that in the long run demand cannot be less than supply because supply is the ultimate result of demand. In response, Keynes who is a renowned economist contested him in one of the writings of his own “General Theory”. Say’s analysis along with most classical school writing was oriented towards the causes of long term financial growth but not towards the short term deviations from full employment. Keynes also stated that the statements relating with the demand and supply that is made by Jean-Baptiste Say was not entirely accurate. However, in this regard, it can be remarkably noted that Say modified his analysis for the fifth edition of his major work, allowing for macroeconomic disequilibrium conditions and reconciled his prior analysis with those of his critics (Economic Insights, n.d.). Hence, with due concern to the above mentioned facts and discussions, it can be stated that Jean-Baptiste Say played a noteworthy role and at the same time contributed notably towards Austrian economics. The Development of Austrian School in Economics It was noted by White (2003) that at the end of nineteenth century, the Economics School of Austria was viewed as one of the extensively discussed topic which is studied exclusively almost by the economic thought historians. These economic thought historians are mainly concerned in the progression as well as in the advancement of the economy along with enhancing various economic principles. The involvement and the enthusiastic participation of the Austrian economists towards various theoretical and applied researches upon broad collection of topics related to economics might be a crucial factor for the development of Austrian School particularly in the field of Economics. The practical and the procedural approach of Austrian School was based on economic phenomenon especially of subjectivism which analyses that every individual prefers and acts deliberately upon his various purposes. This particular conception of subjectivism has been a valuable asset for the Austrian School since from its foundation in the 1870s, though various economists have safeguarded their procedures in different manners upon the topic or issue of subjectivism (White, 2003). According to White (2003), the progression of Austrian School in Economics or the Austrian Economics focused primarily on six authors who have been the most outstanding and remarkable for their execution and safeguarding of the subjectivist approach along with their practical writings relating with the topic of subjectivism. The most outstanding and remarkable authors include ‘Carl Menger’, the creator of the Austrian School, ‘Ludwig von Mises, the major contributor to both economic theory and methodology, ‘Friedrich von Weiser’ and ‘Eugen von Bohm-Bawerk’ as well. In addition, it also included, the developer of Menger’s thoughts, ‘Friedrich A. Hayek, who was rewarded with Nobel Prize in the field of economics due to his well recognized practical studies on economics and ‘Ludwig Lachmann’, the pursuer of the subject matter of subjectivism of that period. According to Thornton (2006), Richard Cantillon’s successful examination towards the cyclist nature of the capitalist economy and broad establishment of the conception of ‘business cycles’ collectively developed Austrian economics to a certain extent. In contrast to other economists, Carl Menger who is the creator of Austrian School also introduced an imaginative, innovative, productive idea along with distinctive vision of economics that led towards the progression of Austrian School in economics. Cantillon was a brilliant observer who developed a comprehensible economic idea of money, banking, international trade and stock markets. He also discovered that the markets were regulated by the movement of price which is fundamentally based on demand and supply recognizing its balance tendencies along with market exchange. Thornton (2006) also stated that his theory of ‘business cycle’ is mainly caused by the government manipulation of money and banking. On the other hand, Menger’s book had little impact as well as observed as unenthusiastic particularly in Germany. The Germans got discouraged and ultimately rejected not only his own theory but all theoretical studies of economics that was mentioned in his book of “Principle of Economics”. In response, Menger took this severe issue as a major challenge and continued to conduct further researches. In the year 1883, he introduced another book which is named “Problems of Economics and Sociology” which made a remarkable and a positive impact upon the Germans. According to White (2003), Menger’s idea of economic principles was based on ‘essentialist’. The subjectivist theory and principle of Menger remained was mainly concerned emphasizing upon the fact that the satisfying requirements of an individual are indirectly determined by them. The individuals must perform on the basis of their preferences that are executed without complete and precise idea of their requirements. This particular concept of Menger’s theory that was based on subjectivism eventually supported to Menger’s value theory and was broadly granted without any problem to the Austrians. Furthermore, Cantillon predicted that the key features of this particular Austrian theory and his analysis upon was based on impartiality towards proper money utilization, artificial alterations to relative prices and the resulting modifications particularly in the results of the consumption, production and investment features that are ultimately revealed to be risky for the economy. However, In addition, another significant proposal of Menger’s deliberate approach towards the field of economics was in the ‘essentialist’ theory which ultimately results his refusal of various numerous processes and the common determination of financial variables. In lieu of this, Richard Cantillon’s realistic approach of ‘business cycle’ principle include a communal preference or a kind of “Neo-Austrian” vision, which states that the control of the government over the monetary transactions that eventually advanced and progressed the market economy to a certain extent. Thus, it can be stated that Richard Cantillon’s conception of business cycle principle along with his theory of impartiality of the proper utilization of money ultimately developed Austrian School particularly in the field study of economics. It has been observed by Andrieu (2010) that the development of Austrian School particularly in economics was also due to immense contribution made by Anne Robert Jacques Turgot. Turgot developed ‘the theory of Quesnay’ which implies that the land is only the basis of wealth and the society is segregated into three major parts i.e. the ‘land-owning class’, the ‘productive or agricultural’, the ‘salaried or artisan class’. In contrast with other economists, Friedrich A. Hayek, who is one of the associate of the School of Austria developed an idea or concept of “scientism” which implied that the social changes should adopt the procedures of the physical sciences. In this context, Turgot also made deliberate efforts and made crucial assumptions regarding the Austrian theory of capital and interest along with supporting the various principles of trade and commerce (Andrieu, 2010). On the other hand, Hayek’s principle of economical market was fundamentally based upon information-gathering procedure and this particular conception of Hayek evolved directly from his subjectivist outlook. Hayek in Holcombe (1999) stated that, neither the factor of the resources that are available nor the factor of the requirements that exists can be utilized in the task of executing available resources in order to satisfy existing needs. The resources as well as the needs exist for practical purposes only if somebody is well familiar about them. According to Andrieu (2010), it was recognized that Turgot considered entrepreneurs as someone who used his own capital regarding a view that makes a purposeful sense in world where financial markets were not fully developed. The reason behind the making of a purposeful sense in the world lie in the fact that the entrepreneurs who borrows the money, ultimately makes the money to be circulated which is one of the crucial factor for the development of market economy. Thus, it can be stated that A. R. J. Turgot’s propounded theory of value and money, production and distribution, capital, entrepreneurship, savings and interest collectively progressed and advanced Austrian School in the field study of economics. Apart from these valuable theories, another significant theory of Turgot that developed the Austrian School particularly in economics was in his introductive theory of ‘production and distribution’ that followed the nature of ‘physiocrats (Andrieu, 2010). The introduction of Jean-Baptiste Say’s ‘law of market’ along with his other propounded theories that include his theory of taxation, money and banking, made notable progress in the School of Austrian Economics. According to Smith & Wolfe (2009), it was Jean-Baptiste Say who was the primary and former economist to focus and emphasize sincerely upon the various economic procedures and policies. In this connection, Say propounded a law which implied that the supply and demand will reach in a balanced position if permitted to adjust within a free market and without any obstruction in the process. But the uniqueness that laid in Say’s law was in the conception that according to him supply can encourage demand and vice-versa. Smith & Wolfe (2009) also noted that Jean-Baptiste Say realized the concept of economics and affirmed economic theories to be fundamentally about verbal explanation of universal facts along with their logical implications such as the requirements of an individual as indefinite and incomes as insufficient. In lieu of this, Say discovered that the productivity theory of resource pricing, the role of capital in the division of labor and his law of market, that there would be no continuation of “overproduction” or “under consumption” on the free market if there lies an adequate adjustment of prices (Smith & Wolfe (2009). Thus, it can be stated that the realizations as well as the various propounded theories of Jean-Baptiste Say had inevitably contributed to Austrian School of economics. Conclusion It can be stated that at the end of the twentieth century, the Austrian School of economics has exercised noteworthy influence both upon the development of academic economics as well as upon the application of economic theory to public policy. With reference to the above discussion regarding the overview of Austrian Economics along with identifying the significant contributions of great economists, eventually placed Austrian School towards the progression and advancement particularly in the field of economics. It was noted by Holcombe (1999), that few academic economists were well aware and familiar with the Austrian School but few among them largely disagree with its procedures and conclusions. Gradually, the ideas of Austrian economics became closer to various assumptions of economic idea, not for the reason of Austrian economics being altered, but for the reason of various assumptions of economic ideas has shifted toward Austrian viewpoint. The Austrian economics policy propositions once enormously discarded but eventually it got truly accepted. Currently, with the passing time, the Austrian School has become significantly visible as an intellectual force. According to Holcombe (1999), by the middle of twentieth century, the Austrian economics theory paid utmost attention towards numerical conditions for economic equilibrium and the policies of the Austrian economics emphasized on the ways that the involvement of the government in the economy could promote and advance towards success. The significance of the economic principles of Austria on the market procedures other than the conditions of equilibrium along with focusing upon entrepreneurship rather than zero-profit competitive market balances ultimately moved Austrian School to form a crucial base at the middle of economic ideas to financial fringes. Moreover, the immense focus of the economic principles of Austria upon distribution of the market rather than various planning executed by the government also plays a crucial role in forming a major base at the middle of economic ideas to financial fringes (Holcombe, 1999). In the discussion of this paper, the Austrian School especially in the field of economics is highlighted due to the fact that the Austrian economic theories as well as the policies are more sensible and communally scientific. It has been noted by Rockwell (n.d.) that the Austrians viewed economics as a tool for having knowledge or an idea regarding how people make effort collectively and participate in the procedure of meeting their requirements, distributing resources and finding out the ways of forming a successful social order. Along with these views, the Austrians also viewed the conception of entrepreneurship as a major force in the financial development, private property as necessary to an effective use of resources and the involvement of the government in the market that could promote and advance the economy towards success. However, in terms of policy, the Austrian School in economics looked more and more striking that contributed towards continuation of business cycle principle, the degeneration of socialism, the cost and failure of the regulatory state and diminishing the public dissatisfaction with the government to a certain extent (Rockwell, n.d.). However, it has been identified that the valuable contributions made by some of the early and senior economists along with the most prominent and remarkable authors including ‘Carl Menger’, the creator of the Austrian School, ‘Friedrich von Weiser’ and ‘Eugen von Bohm-Bawerk’, the developer of Menger’s thoughts, eventually paved the way towards the development of Austrian School in the field of economics. Moreover, ‘Ludwig von Mises, the noteworthy contributor to both economic theory and methodology, ‘Friedrich A. Hayek who won Nobel Prize in the field of economics due to his well recognized sensible as well as practical studies on economics and ‘Ludwig Lachmann’, the pursuer of the subject matter of subjectivism of that period eventually also paved the way towards the development of Austrian School in the field of economics. It has also been observed that apart from the above mentioned contributors, the immense contribution of ‘Richard Cantillon’, ‘Anne Robert Jacques Turgot’ and Jean-Baptiste Say among others also made the Austrian School to be developed significantly in the field of economics. The notable and important contributions that ultimately led towards the progression of Austrian School in economics include ‘Richard Cantillon’s’ introduction of ‘economic principles’, ‘Anne Roger Jacques Turgot’s theory of ‘value, exchange and price, theory of production and distribution. Moreover, Turgot’s theory of money, theory of capital, entrepreneurship, savings and interest’ and Jean-Baptiste Say’s ‘law of market, theory of money and banking, theory of value and utility and theory of taxation’ among others also had a major role in the progression of Austrian School in the field of economics. Apart from these incredible contributions, there are several other contributors along with their precious contributions in their writings or researches also significantly contributed and developed Austrian School in the field of economics that include Carl Menger’s writing’s in “Principle of Economics” and Hayek’s conception of “scientism” among others. Thus, it can be stated that though there has been some continuing discussions as well as arguments, criticisms and contradictions on the basis of the methodologies, explanations or the researches related to economic theories and policies which are suggested by the then economists. Though there exist certain arguments and criticisms, but still the contribution of the then phenomenal economists possessed some influencing factors that remarkably influenced the then economic principles and policies to a large extent. References Anne Robert Jacques Turgot. (2011). The Turgot Collection. Auburn: Ludwig Von Mises Institute. Andrieu, E. C. 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