Explain how Menger’s theory of factorimputation is consistent with the Austrianview that utility, not input cost, is the sourceof value.
OutlineWho’s Carl Menger?What’s Austrian school?What’s the common between Menger andAustrian?
Who’s Carl Menger?
Carl Menger1840 - 1921Son of a lawyerA professorPrinciples of Economics
Menger’s Value Theory
The Theory of ImputationEmphasis on consumer demand.Though only indirectly, intermediategoods help to produce things also bringsutility.The doctrine was an attack on real-costtheory of value.
OutlineConsidered that the value is determinedby subjective individual preference.Asserted that economical decision israther individual than collective.There is no objective exchange value,because its root is bedded in thesubjective estimates of the individuals.