Karl Menger

Born Feb. 23, 1840, in Neusandez, presentday Nowy Sącz, Poland; died Feb. 27, 1921, in Vienna. Austrian economist, founder of the Austrian school of bourgeois political economy, and one of the originators of the psychological theory of marginal utility. He studied law at the universities of Paris and Vienna and was a professor at the University of Vienna from 1879 to 1903.

Menger’s economic theory is highly individualistic. Regarding the economic activity of society as the result of the behavior of individuals, he considered the main task of economics to be the study of the laws of development of separate business units and the investigation of individual needs and the means of satisfying them. Opposing the Marxist labor theory of value, Menger proposed the theory of subjective value, according to which the price of a commodity is the result of the subjective valuations of buyers and sellers. According to him labor expenditures do not have any “direct connection with the determination of value.”With respect to distribution, he developed ideas that became the basis for the apologetic theory of imputation. On the whole Menger’s theoretical views are ahistorical and apologetic, and it is not accidental that they have been widely accepted in contemporary bourgeois economics.