The two Vienna schools: the Mathematisches Kolloquium and the Kreis
The Ecole de Lausanne made its mark in Vienna in the 1920s and early 1930s. First, under the influence of Karl Menger’s Mathematisches Kolloquium, a number of questions originally formulated by Walras in terms of a “number of equations and unknowns” and “tatonnements” were transformed, crystallized and prioritized around the equilibrium existence, uniqueness and stability.
Participants to the Mathematisches Kolloquium, mostly mathematicians such as Karl Schlesinger, Abraham Wald, Frederik Zeuthen, Hans Neisser and John von Neumann, used an axiomatic approach, and their Hilbertian formalism was applied to the Walrasian general equilibrium, which they were acquainted with thanks to Gustav Cassel’s simplified version. The general economic equilibrium is thus seen as a system of interdependent economic variables where the issue of whether these variables account for the coordination of individual behaviour through the price mechanism is very abstract and actually quite removed from the group’s concerns.Yet, to follow the Ecole de Lausanne via Vienna, it is necessary, besides this history, to focus on a second avenue with surprising ramifications. As brilliantly shown by Marchionatti (2009), another Viennese circle was interested in the general equilibrium: Moritz Schlick’s Kreis. Very different from the Mathematisches Kolloquium, the Kreis was essentially the birthplace of neo-positivism. In this circle, Pareto’s writings were known and read and his programme for epistemological revision of political economy had a direct echo in “The scientific conception of the world”, written in 1929 by Hans Hahn, Otto Neurath and Rudolf Carnap. A critical analysis of the foundations of political economy, the abandonment of all “metaphysical” residual elements, a similar verificationist paradigm - Pareto’s logico-experimental method indeed agrees well with the empirical-logical method - together with the project of a unified science, these are all points of contact between Pareto and the Kreis.