Friedrich Hayek wrote that the Austrian school's "fundamental ideas belong fully and wholly to Carl Menger.

Carl Menger von Wolfensgrün[3] was born in the city of Neu-Sandez in the Kingdom of Galicia and Lodomeria, Austrian Empire, which is now Nowy Sącz in Poland.

[citation needed] During the course of his newspaper work, he noticed a discrepancy between what the classical economics he was taught in school said about price determination and what real world market participants believed.

In 1872 Menger was enrolled into the law faculty at the University of Vienna and spent the next several years teaching finance and political economy both in seminars and lectures to a growing number of students.

In 1876 Menger began tutoring Archduke Rudolf von Habsburg, the crown prince of Austria, in political economy and statistics.

[14] He is also thought to have assisted the crown prince in the composition of a pamphlet, published anonymously in 1878, which was highly critical of the higher Austrian aristocracy.

[16] Menger believed that gold and silver were the precious metals that were adopted as money for their unique attributes like costliness, durability, and easy preservation, making them the "most popular vehicle for hoarding as well as the goods most highly favoured in commerce.

"[17] Menger showed that "their special saleableness" tended to make their bid-ask spread tighter than any other market good, which led to their adoption as a general medium of exchange and evolution in many societies as money.