It's a thrilling event when a lost work by a genius comes into print for the first time. Here Eugen von Boehm-Bawerk--Mises's teacher and a huge figure in the history of thought--explains and argues for the subjective theory of value, the theory of marginal utility, and their relationship to price. His legendary patience and attention to detail is on full display.
This book was originally published in German in 1886 as an elaboration on Menger--driving home points concerning value as against every non-Austrian point of view. He completely demolishes not only the labor theory but also the value theory that rests on claims of aggregate economic value or social worth. In so doing, he clarifies points that Menger himself hadn't entirely spelled out.
If you ever wonder precisely what it is that Austrians mean by subjectivism, this is the book to read and understand. He shows that economic value is to be distinguished from any notion of the aggregate value or life value of some good or service, which is why luxury goods unnecessary for life can be so much more valued than bread and water.
He also outlines for the first time in this article the modern marginal productivity theory of factor pricing.
The English translation by Hans Sennholz has circulated among a handful of writers since 1973 but it was never available publicly nor published.
The author covers the nature and origin of value, the measurement of value, the value of complementary goods, the scientific significance of subjective value, and the theory of objective exchange value.
Far from being small points in the history of economic thought, neither the political class nor professional economists have fully come to terms with Boehm-Bawerk's subjectivism. Mathematical theoreticians as well as political leaders assume even now that they can somehow discern the merit or worth of a good or service apart from its subjective use value to individuals, which can only be known on the margin by decision makers themselves.
A particularly impressive aspect of this book is its clarity of exposition. He stays on point with the desire to not only refute critics of the Austrian School but to convince the reader at every step.
The appearance of this volume 120 years after its first publication in German is a major event, not only for the Austrian School but for the whole discipline of economics.
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