Menger Hinted That Theoretical Economics Must Trace Economic Phenomena Back to Their Psychological Causes; Austrian Theory, Unlike Walrasian Economics, Was Founded on Introspection

Wieser and Böhm-Bawerk retained the styles of reasoning favoured by Menger. Menger merely hinted that theoretical economics must trace economic phenomena back to their ‘psychological causes’. Much later, Wieser expanded on what he believed to be the ‘psychological’ orientation of economic theory—theory which, it should be stated, paralleled Menger’s ‘exact’ theory in most important respects. The ‘“psychological” theory of economics’ was developed by introspection, that is, by ‘observations concerning the inner life of man’. . . . Schumpeter’s book had attempted to reconcile the irreconcilable—namely the central propositions and concepts of Austrian and Walrasian economics. His attempt failed because he neglected to appreciate that Austrian theory, unlike Walrasian economics, was founded on introspection.

--A.M. Endres, Neoclassical Microeconomic Theory: The Founding Austrian Version, Foundations of the Market Economy (London: Routledge, 2002), 15-16.