James Buchanan Wrote That the Opportunity-Cost Concept Was Explicitly Developed by the Austrian School Economists

For Wicksteed, the only sense in which cost plays a role in the explanation of the market price is that in which cost is the anticipated value of a prospective alternative which is, at the moment of production decision, being rejected in favor of what it is decided to produce.

It is this view of Wicksteed which led Professor James Buchanan to write that the

opportunity-cost conception was explicitly developed by the Austrians, by the American, H.J. Davenport, and the principle could scarcely have occupied a more central place than it assumed in P.H. Wicksteed's Common Sense of Political Economy.

As Buchanan has emphasized, Wicksteed's work “was a major formative influence on the cost theory that emerged in the late 1920s and early 1930s at the London School of Economics [LSE].” Certainly Robbins's own recognition of the Austrian School during these years, and his own intellectual leadership at the LSE at this time must have helped cement the perception of intellectual affinity linking Wicksteed with the Austrian School.

—Israel M Kirzner, “Philip Wicksteed: The British Austrian,” in 15 Great Austrian Economists, ed. Randall G. Holcombe (Auburn, AL: Ludwig von Mises Institute, 1999), 107.