2020 2(39)2

Goal-setting as the Basis of the Austrian School of Economic Theory

Olexander Vyshnevskyi
Phd in Economic Sciences, Corresponding Member of the Academy of Economic Sciences of Ukraine
ORCID https://orcid.org/0000-0002-2375-6033,
Institute of Industrial Economics of the National Academy of Sciences of Ukraine, Kyiv

Citation Format
Vyshnevskyi O. S. (2020). Goal-setting as the Basis of the Austrian School of Economic Theory. Visnyk ekonomichnoi nauky Ukrainy, 2 (39), рр. 9-15. doi: https://doi.org/10.37405/1729-7206.2020.2(39).9-15


Modern schools of economic theory are predominantly based on the analysis of resources (factors of production) and their corresponding institutions (relations). But resources make sense only in the context of goals, the primary carrier of which is a person. The only school of economic theory, the provisions of which are based directly on human activity, is the Austrian school. Therefore, the work is carried out rethinking the axiomatic provisions of this particular school from the standpoint of goal-setting and strategizing.
The work carried out a phenomenological reduction of key economic concepts (value, price, exchange, production, cooperation, profit, loss, demand, supply, interest, labor, capital) from the standpoint of goal setting. As a result, the following definitions have been proposed.
“Value” is the importance that a person attaches to goals. “Price” is the sum of the costs associated with achi-
eving the goal. “Exchange” is the receipt of the other people’s resources for achieving own goals through the refusal from their own resources of the achieving other people’s goals. “Individual production” is an individual activity to create new means of achieving goals. “Cooperation” is a joint activity to achieve goals. “Profit” is an approaching to the goal. “Loss” is a distanting from the goal. “Market” is the process of obtaining the means to achieve one’s own goals in exchange for the means of achieving another’s goals. “Demand” is a requirement of the subject for the means to achieve its goals that do not belong to him. “Supply” is a subject’s willingness to give up (through exchange) his or her means of achieving someone else’s goals. “Percentage” is the relative value of the goal depending on the time factor, which is transferred to the means of achieving it. “Capital” is a set of means to achieve goals. “Labour” is an activity aimed at achieving goals.
The possibility of such a reduction proves the fundamental role of goals in the economic process, since it is the goals that manifest in the environment the means of achieving them, determine the nature and forms of human and organizational activity.
Ultimately, from the standpoint of goal-setting, conditions are created for the formation of an internally non-contradictory economic theory that is capable of synthesizing individual and public interests on the basis of coordinating goals..

Austrian school of economic theory, goal, axiomatics, goal-setting, institute strategizing, phenomenological reduction.


  1. Buzgalin A.V. (2018). The decline of neolibera­lism. Issues of Economics, 2, рр. 122-141. doi: https://doi.org/10.32609/0042-8736-2018-2-122-141 [in Russi­an].
  2. Avtonomov V.S. (2004). For what economists do not like methodologists. Blaug M. Methodology of economic science, or as economists explain (scientific ed. and introductory article by V. S. Avtonomov). (рр. 11-16). Moscow, NP “Journal of Economics” [in Russian].
  3. Mises L. (2005). Human activity: a treatise on economic theory. Chelyabinsk, Social. 877 p. [in Russian].
  4. Garrison R. (2012). Natural Rates of Interest and Sustainable Growth. Cato Journal, 32(2), рр. 423-437.
  5. Rykova I. A. (2012). The crisis of modern economic policy and the lessons of the Austrian school. Finance and Credit, 34 (514), рр. 44-51 [in Russian].
  6. Zaostrovtsev A. P. (2009). Economic Cycles: An Analysis of the Austrian School of Economics. Finance and Business, 3, рр. 5-17 [in Russian].
  7. Usanov P. V. (2010). Economic phenomenology as a method of political economy of the Austrian school. Terra Economicus, 8 (4), рр. 47-56 [in Russian].
  8. Usanov P. V. (2015). Phenomenology as the basis of political economy. Social Sciences and the Present, 6, рр. 131-141 [in Russian].
  9. Shiryaev I. M. (2014). The study of economic evolution in the works of representatives of the Austrian school of economic theory. Actual problems of the humanities and natural sciences, 8-2, рр. 75-77 [in Russian].
  10. Zaostrovtsev A. P. (2015). The modern Austrian school about institutions, problems of development and the role of economist. Issues of Economics, 7, рр. 73-86 [in Russian].
  11. Kovalev A. V. (2011). Austrian School and Insti­tutionalism: the Similarity of Methodology. Terra Economicus, 9 (4), рр. 77-82 [in Russian].
  12. Volchik V. V. (2009). Institutionalism: Triumph of Multidisciplinarity. Journal of Institutional Studies, 1, рр. 73-78 [in Russian].
  13. Dementiev V. V. (2015). Institutional Political Economy: Where to Start? Journal of Institutional Studies, 1, рр. 25-44. doi: https://doi.org/10.17835/2076-6297.2015.7.1.025-044 [in Russian].
  14. Vishnevsky A. S. (2018). General theory of strategy: from paradigm to practice of use. Kiev, ІІЕ of NAS of Ukraine. 168 p. [in Russian].
  15. Vyshnevskyi O. (2020). Institute of strategizing as a tool of the transition to open-access orders in Ukraine. Efektyvna ekonomika, [Online], vol. 8. Available at: http://www.economy.nayka.com.ua/?op=1&z=8102 (Ac­cessed 30 Sep 2020). doi: https://doi.org/10.32702/2307-2105-2020.8.59 [in Ukrainian].
  16. Hodgson J. (2003). Economic theory and institutions: Manifesto of modern institutional economic theory. Moscow, Case. 464 p. [in Russian].
  17. Descartes R. (1989). Works: in 2 vols. Moscow, Thought. Vol. 1. 654 p. [in Russian].
  18. WHO. (2016). Age-standardized suicide rates (per 100 000 population). Available at: https://web.archive.org/web/20180318182842/http://apps.who.int/gho/data/view.main.MHSUICIDEASDRREGv?lang=en.
  19. Robbins L. (1993). The subject of economic science. Thesis. Theory and history of economic and social institutions and systems. Almanac. 1993, Volume 1, Issue 1, рр. 10-23. Available at: https: //igiti.hse.ru/data/058/ 314/1234/1_1_1Robb.pdf [in Russian].
  20. Menger K. (1992). The Foundations of Political Economy / Menger K., Böhm-Bawerk E., Wieser F. Austrian School in Political Economy (Trans. from German by G. Tiktin and I. Aberguz; under the editorship of R. M. Orzhentsky). Moscow, Economics. Рр. 31–242 [in Russian].
  21. Böhm-Bawerk, E. (1992). The Foundations of Political Economy / Menger K., Böhm-Bawerk E., Wieser F. Austrian School in Political Economy (Trans. from German by G. Tiktin and I. Aberguz; under the editorship of R. M. Orzhentsky). Moscow, Economics. Pр. 243-426 [in Russian].
  22. Laloux F. (2014). Reinventing Organisations: A Guide to Creating Organisations Inspired by the Next Stage of Human Consciousness. Brussels, Nelson Parker. 360 p.
  23. Bukharin N. I. (1988). Political economy rentier. The theory of value and profit of the Austrian school. Moscow, Orbit. 191 p. [in Russian].
  24. Blaug M. (1994). Economic thought in retrospect. 4th ed. Moscow, Case Ltd. 720 p. [in Russian].
  25. Shigapova M. Yu. & Martseva L. M. (2017). The essence and content of the definition of the concept of labor. Innovation Economy and Society, 1 (15), рр. 94-100 [in Russian].

Full Text .pdf