His childhood years are generally described as happy, which would contrast with his later life in Germany, surrounded by constant political and economic instability and crisis.

The couple struggled financially, and Lachmann, unable to find a post in an academic position, enrolled at the London School of Economics.

In this research project, he traveled to the United States, where he met Alfred Schütz and Frank Knight, and attended the seminars of the latter.

In 1974, a conference on Austrian economics was organized in South Royalton, Vermont, in which Lachmann was a key speaker, along with Israel Kirzner and Murray Rothbard.

[8] Following the conference, Lachmann began annual trips to New York City, where he worked with Kirzner at NYU, advancing research and lecturing to students.

To Lachmann, Austrian Theory was an evolutionary, or "genetic-causal" approach, as opposed to the equilibrium and perfect-knowledge models used in mainstream neoclassical economics.

He underscored what he viewed as distinctive from that mainstream: economic subjectivism, imperfect knowledge, the heterogeneity of capital, the business cycle, methodological individualism, alternative cost and "market process".

[5] Fellow Austrian Economist Israel Kirzner was a close friend of Lachmann's whom he aligned with intellectually (though they disagreed on some finer details).

Many social scientific disciplines explicitly or implicitly build on the subjective theory of value, developed by Carl Menger and the Austrian School of Economics.