Hans Karl Emil von Mangoldt Biography

Hans Karl Emil von Mangoldt

Hans Karl Emil von Mangoldt (1824-1868) had an advantage over von Thiinen and Gossen insofar as he operated from an academic base. Having received his doctor­ate in 1847 from the University of Tubingen, he then studied for two years under Roscher's supervision at the University of Leipzig and for a short time with Georg Hanssen at the University of Gottingen. In between he pursued a journalistic career that he was forced to abandon in 1854 because of his liberal beliefs. Mangoldt got permission to teach on the basis of his first book, a study of entrepreneurial profits, published in 1855. Seven years later he was elected to the chair vacated by Karl Knies at the University of Freiburg. In 1863, he published his second book, an Outline of Economics, a small treatise that had its origin in Mangoldt's lecture notes but nev­ertheless contained some highly original theoretical innovations. T. W. Hutchison called it "a distant infant cousin of Marshall's Principles" {Review of Economic Doc­trines, p. 134).

Mangoldt's theoretical work is divided into two parts. As noted, his first book (1855) developed the theory of profit and the role of the entrepreneur. This book shows the combined influence of Roscher and von Thiinen (through Hanssen). It was probably inspired in part by the challenge of socialism, which induced Mangoldt to take a fresh look at how factor rewards are distributed. Mangoldt was one of a few early writers who separated the entrepreneur from the capitalist and linked entre­preneurial profit to risk taking. Specifically, he characterized entrepreneurial prof­its as the reward for a range of activities, including finding particular markets, clever acquisition of productive agents, skillful combination of factors of production on the right scale, successful sales policy, and in the final analysis, innovation. Frank Knight found Mangoldt's profit theory "a most careful and exhaustive analysis" (Risk, Un­certainty and Profit, p. 27).

The second part of Mangoldt's work (the Outline) consists of a reworking of the main parts of economic theory from a curiously ambiguous perspective, one that com­bined aspects of classical and neoclassical analysis. Despite this ambiguity, the list of original contributions by Mangoldt is fairly impressive, considering the fact that Mill's Principles represented the state of the discipline in Mangoldt's day. This list includes a "Marshallian" treatment of supply and demand, embryonic notions of elas­ticity and economies of scale, a discussion of multiple equilibriums, the generaliza­tion of von Thiinen's (marginal productivity) principle of distribution (especially a generalized concept of rent), and a graphical analysis of price formation under con­ditions of joint supply and demand.

Mangoldt's subjective theory of value must be added to the small but growing list of such treatments before 1871, but the subjective viewpoint did not permeate his analysis as it did the later work of the Austrians. In fact, even though Menger knew of Mangoldt's work, he seemed to be little influenced by it. As regards von Thiinen and Gossen, from whom Menger could have profited, they seemed to be altogether unknown to him. The German economists Menger showed greatest familiarity with were mostly, but not exclusively, historicists. They included Hermann, Hildebrand, Hufeland, Knies, Rau, Roscher, Schaffle, and Storch. Consequently, the purpose of this section has not been to link von Thiinen, Gossen, and Mangoldt with the Aus­trian school in any overt sense but merely to indicate the depth and breadth of Teu­tonic economic thought in the nineteenth century. In this manner, the stage is set for an appreciation of the Austrian contribution. We wish to note, however, that a ret­rospective view of the contributions of early German theorists gives new force and meaning to Alfred Marshall's statement that "the most important economic work that has been done on the Continent in this century [19th] is that of Germany" (Princi­ples, p. 66).