Oskar Morgenstern, Die drei Grundtypen der Theorie des subjektiven Wertes (1931)

Morgenstern’s contribution to an edited collection, spanning pages 1–42, compares Austrian, Lausanne, and Anglo-American formulations of subjective value theory. Its five sections move from the instrumental purpose of value theory through these three traditions to their underlying unity. The title’s apparent plurality is ultimately qualified: Morgenstern argues that the schools elaborate a common principle rather than offer fundamentally competing explanations. His comparison nevertheless privileges the Austrian formulation for its systematic detail, account of economic planning, and capacity to explain adjustment. The digital republication year remains unverified.

The opening establishes the criterion by which the schools should be judged. Economic theory centrally seeks to explain prices; value theory supplies an analytical instrument for that task, not a rival object of inquiry.

Damit ist bereits das entscheidende Wort ausgesprochen: die Werttheorie ist lediglich ein Mittel, ein Hilfswerkzeug, um zur Preiserklärung zu gelangen.

English translation: The decisive word has thereby already been spoken: value theory is merely a means, an auxiliary tool for arriving at an explanation of prices.

Consequently, proposals to “replace” value theory with price theory mistake the relationship between means and end. Questions about utility, substitution, and productive contributions justify their apparent detours by improving price explanation. Morgenstern particularly attacks Cassel’s rejection of value theory and insists that criticism address its contemporary development rather than nineteenth-century formulations.

The long Austrian section begins with the “simple economy,” defined formally by a unified will disposing of a limited stock of goods. This can encompass an isolated individual, a household, or a centrally directed economy. It is an analytical structure, not an assertion that economic life consists of solitary Robinson Crusoes. Within it, marginal utility identifies the satisfaction dependent upon retaining a unit: substitution ensures that losing any interchangeable unit ultimately sacrifices the least important use. Subjectivity therefore denotes a relation between goods and a disposing subject, not arbitrary judgment or independence from objective conditions.

Morgenstern complicates this elementary account through time and complementarity. Needs recur periodically, so planning ranks anticipated satisfactions across a period rather than merely responding to present sensations. With heterogeneous goods, utility depends on the whole stock and its arrangement:

Der Nutzen eines Gutes ist also nicht länger nur eine Funktion der Menge dieses betreffenden Gutes, sondern eine Funktion des gesamten Gütervorrates, den ein Wirtschaftssubjekt besitzt.

English translation: The utility of a good is therefore no longer merely a function of the quantity of that particular good, but a function of the entire stock of goods possessed by an economic subject.

This interdependence counters accusations of atomism. Marginal utility must be determined within the overall allocation, including substitutions after acquisition or loss. Equalization of marginal utilities remains a tendency rather than an invariably attainable state: indivisible goods and discontinuous needs prevent exact leveling without necessarily preventing rational allocation. Utility rankings suffice for choice; Morgenstern rejects exact measurement in the main exposition, while a footnote allows that mathematical developments might revise the underlying argument.

Costs extend the same explanatory principle into production rather than introduce an independent source of value.

„Kosten“ sind entgangener Nutzen oder negativer Nutzen.

English translation: “Costs” are forgone utility or negative utility.

Production sacrifices alternative satisfactions, and productive inputs derive their significance from the consumption goods they make possible. Imputation assigns the product’s value to cooperating factors; replacement and substitution connect costs to the marginal utility of the marginal product. In moving toward prices, Morgenstern carefully distinguishes qualitative utility rankings from quantitative maximum bids. Willingness to pay depends on the ordering of needs without numerically measuring their utility. Treating bids as ultimate unexplained data would obstruct further explanation, notably of inflation.

The Lausanne section recognizes Pareto’s indifference curves and account of complementarity as substantially compatible with Austrian analysis. “Ophelimity” changes terminology rather than the economic object. Similarly, mathematical presentation and the opposition between causal and functional explanation do not establish fundamental doctrinal differences. Morgenstern credits functional methods with framing questions of solvability, while insisting that analysis must proceed beyond that preliminary task. His principal objection is Lausanne’s compressed treatment of value: without a fully developed theory of the simple economy, it lacks an explicit utility-based imputation theory and a rounded account of own-production. Indifference curves do not eliminate valuation; their indices preserve an ordering of satisfactions.

The Anglo-American discussion distinguishes England’s established marginalist tradition from America’s more dispersed debates. Morgenstern rejects identifying utility analysis with Benthamite hedonism or capitalist apologetics. He also denies “social value” to an exchange economy: interdependent individuals do not constitute a single valuing will, and their utilities cannot simply be compared. Labor disutility is legitimate as a subsidiary consideration, but cannot explain value generally. Marshall’s “real costs” likewise receive criticism, whereas opportunity cost expresses, in Morgenstern’s judgment, the same principle as Austrian forgone utility.

The conclusion turns comparison into a program of theoretical consolidation:

Dieses Ergebnis lautet: es gibt keine drei (oder noch mehr) verschiedenen Typen der Theorie des subjektiven Wertes.

English translation: This result is: there are not three (or still more) different types of the theory of subjective value.

Differences chiefly concern terminology, elaboration, and applications; translating between conceptual idioms can reveal their common structure. Yet unity does not imply equal explanatory achievement. Morgenstern claims Austrian allocation analysis can trace transitions more readily than Lausanne equilibrium theory, making it especially relevant to attempts to introduce dynamics. He closes with unfinished questions about planning periods and recurring needs, affirming that value theory remains revisable. The essay’s importance lies in this combination of disciplinary reconciliation and partisan methodological judgment: a shared theory of choice remains indispensable, but its usefulness must be demonstrated through the explanations it enables.