Hans Mayer, Untersuchung zu dem Grundgesetz der wirtschaftlichen Wertrechnung (1922)

Mayer investigates economic valuation by reconstructing the conditions of economizing. Continuing a critique of the “Grenzgesetz,” the formula valuing stocks by marginal utility, he argues that its justification requires a fuller account of economic activity. The investigation moves from abstract conditions of allocation to the temporal organization of provision, then considers households and enterprises in an exchange economy. It establishes prerequisites for a valuation theory while reserving the actual derivation for a subsequent article.

Observed market valuations cannot by themselves establish an elementary law of value. Valuations that presuppose existing prices cannot independently explain those prices:

Wir hätten dann nur ein spezielles — für Gütermengen, welche behufs Erwerbung oder Veräußerung auf dem Markte gewertet werden, geltendes — und nur ein sekundäres — aus der Tatsache bereits bestehender Preise abgeleitetes — Wertgesetz festgestellt.

English translation: We should then have established only a special law of value — one valid for quantities of goods that are valued on the market for the purpose of acquisition or of sale — and only a secondary one — derived from the fact of already existing prices.

Mayer therefore seeks conditions common to economic activity across institutional arrangements: multiple ends, insufficient means, a ranking of ends within a unified system, and dependence upon a common fund of means. Scarcity creates the allocation problem; the ranking of competing ends makes its solution determinate. This distinguishes economizing from rational action generally and from technique. Rational action can pursue a single end, whereas economizing distributes resources among competing ends. The connection through common means, or Mittelverbundenheit, is essential: without alternative uses for resources, the problem dissolves into separate technical tasks. Production factors provide this connection in an isolated economy, while money makes it particularly visible in exchange.

The inquiry into the concept of economy has explanatory rather than merely terminological significance. Mayer defends identifying the conditions that make economic phenomena a coherent object of theory:

Wenig kommt dabei auf das Wort an, alles auf die Tatsache, daß eine Gruppe von Phänomenen durch spezifische Voraussetzungen einheitlich bedingt und dadurch einheitlich beschreibbar ist.

English translation: Little here depends on the word, everything on the fact that a group of phenomena is uniformly conditioned by specific presuppositions and is thereby uniformly describable.

Austrian marginal-utility theory gives empirical content to these formal conditions. Needs supply the ends, differences in their intensity establish rankings, and production relationships connect the means. Yet these elements do not fully determine allocation. Marginal utilities result from the disposition of resources as a whole; they cannot simply be treated as independently given determinants of that disposition. Conventional scales of need register successive degrees of satisfaction but leave the recurrence of needs insufficiently specified.

Time supplies the missing dimension. Agents with identical stocks and scales of need can allocate differently while following the same maximizing principle. One may exhaust resources on present satisfactions; another may reserve them for the recurrence of urgent needs before satisfying less urgent present wants. Their resulting marginal utilities differ. Stocks, technical relationships, and intensity rankings therefore cannot determine valuation without a period of provision. Mayer’s objection concerns the incompleteness of a static representation of needs, not the principle of diminishing marginal utility itself.

Provision extends through time because needs recur and production takes time. Replenishment is not instantaneous; production conditions help determine the minimum interval for which resources must suffice. Allocation consequently concerns sequences of states of satisfaction, not isolated satisfactions at a single moment. The reconstruction must ultimately demonstrate the validity of marginal valuation within this regular temporal process:

Und zweitens haben wir nachzuweisen, daß eben für diesen regelmäßigen Wirtschaftsablauf die Bewertung nach der Formel des Grenzgesetzes die tatsächlich geltende ist.

English translation: And secondly, we have to demonstrate that precisely for this regular course of economic activity the valuation according to the formula of the marginal law is the one that actually holds.

The final discussion extends this framework to the exchange economy. Households allocate limited monetary incomes among heterogeneous needs over time. Intermittent receipts, fluctuations, and uncertainty sustain the necessity of provision. Enterprises occupy a different conceptual position: the entrepreneur as entrepreneur pursues the single homogeneous objective of maximizing monetary income. Under Mayer’s strict definition, selecting means for this objective is technical activity.

Enterprise nevertheless remains economically conditioned. Entrepreneurs seek income for household purposes, and demand for their products ultimately arises from household allocation. Production and exchange thus depend upon the elementary relationships of economizing. Mayer’s central contribution is to connect competing ends and alternative uses of means with the temporal structure of provision, thereby preparing—but not yet completing—the derivation of the valuation law.