ИПИ Библиотека

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.

Value in the objective sense means the power or ability of a good to achieve an objective result. In this sense there are as many kinds of value as there are results. There is a nutrition value of food, a heat value of wood and coal, a fertilizer value of various manures, a blast value of various explosives, etc. All these value terms lack any reference to the well-being of an individual. When we say that beech wood has a higher heat value than pine, we state a purely objective or "mechanical" fact. We are simply stating that a certain quantity of beech wood yields more heat than the same quantity of pine wood. Therefore, instead of the value term we also use the synonyms "power" or "capacity", which point up the purely objective relationship. Instead of "nutrition value" we may say "nutritional potency", "heat capacity" instead of "heat value", "blasting force" instead of "explosive value", etc.

Eugen von Böhm-Bawerk

Eugen von Böhm-Bawerk (February 12, 1851 – August 27, 1914) was in the right place at the right time to contribute importantly to the development of Austrian economics.
Böhm-Bawerk together with Carl Menger and Friedrich von Wieser were the three pillars that established the Austrian school.
Böhm-Bawerk's contributions laid the foundation for the theory of capital, and in later development by others such as Knut Wicksell, the modern understanding of interest in terms of compensation for the use of capital. He emphasized the role of time in determining the value of goods, and developed marginal utility theory into a theory of prices. His work addressed significant economic questions such as how to increase capital, and what is the justification for charging interest. Böhm-Bawerk was the first economist to refute Karl Marx's claim that capitalists exploit workers. He argued that in fact they provide a service to workers by paying them in advance of payment the owners receive for sale of the goods produced by workers. Böhm-Bawerk's view of economic processes included the actual situation and expectations of people involved, not just material measures of quantity of goods and hours of labor. In this way, his answers came closer to addressing the real situation of human society and how we can cooperate together to the benefit of all.