Fritz Machlup was born in Wiener Neustadt, Austria and received his doctorate at the University of Vienna. He studied under Ludwig von Mises and Friedrich August von Hayek. In fact, he wrote his thesis under von Mises. He taught at the University of Buffalo from 1935 to 1947, then at John Hopkins University in 1947, and Princeton University from 1960 to 1971. He then joined the faculty of New York University. He was the president of the American Economic Association in 1966.

Machlup was very knowledgeable in the area of economic methodology. In regard to methodology, He distinguished two schools of thought in regard to the subject of verification in economics, whch he described as "A Priori" and "Ultra-Empiricist". According to Machlup," the ultra-empiricist is so distrustful of deductive sys tems of thought that he is not satisfied with the indirect verification of hypotheses, that is, with tests showing that the results deduced are in approximate correspondence with reliable observational data."

Machlup was also very interested in industrial organization and international monetary economics. According to Machlup, the assumption of profit maximization holds. In response to studies showing that most businesspeople do not consciously use marginal analysis in their work, he stated that this does not undermine the assumption of profit maximization, the reason being that successful businesspeople intuitively use marginal analysis.

Works by Fritz Machlup:

• The Basing-Point System
  
• The Production and Distribution of Knowledge in the United States
  
• The Political Economy of Monopoly
  
• The Economics of Seller's Competition
  
• An Economic Review of the Patent System
  
• International Payments, Debts, and Gold