Eugen von Böhm-Bawerk, Nachwort (1914)

This brief theoretical afterword corrects a sympathetic defense of Böhm-Bawerk’s price theory in the preceding article. Its central concern is to explain why sellers’ subjective valuations can cease to govern the momentary market price without contradicting his general account of price limits. The argument proceeds from a correction of faulty reasoning, through a distinction between upper and lower bounds, to a defense of the explanation already given in his Positive Theorie des Kapitals.

Böhm-Bawerk rejects the suggestion that an upper price limit may be disregarded merely because it lies near zero. A genuinely binding limit would have precisely the opposite consequence:

Im Gegenteil: je näher eine wirklich bindende Obergrenze des Preises an Null stünde, desto stärker müßte sich auch ihre preisdrückende Wirkung fühlbar machen und desto näher der Preis selbst an Null gerückt werden.

English translation: On the contrary: the nearer to zero a really binding upper limit of the price stood, the more strongly would its price-depressing effect have to make itself felt, and the nearer to zero would the price itself be pushed.

The issue is therefore not whether a low valuation is negligible, but whether the market participant whose valuation supplies that limit exists. In large-scale exchange under a division of labor, Böhm-Bawerk argues, sellers normally dispose of their goods at prices above their own subjective valuations:

Sie kommen normalerweise alle zu einem ihre subjektive Wertschätzung noch übersteigenden Preise zum Absatz.

English translation: They normally all come to be sold at a price still exceeding their subjective valuation.

When all sellers find buyers, there is no excluded seller whose valuation could impose the corresponding upper bound. That component of the general formula disappears because its bearer is absent, not because a small numerical value can be treated as nothing.

The last successful seller still supplies a theoretical lower bound. Yet this competes with the lower bound supplied by the strongest excluded buyer: whichever is tighter binds. If the seller’s valuation lies near zero, the excluded buyer’s valuation normally exceeds it and becomes decisive. Thus, under the specified conditions, buyers’ valuations alone can govern the momentary market price while remaining fully consistent with the general theory. The conceptual move is to distinguish an absent limit from an existing but nonbinding one.

Böhm-Bawerk acknowledges that the preceding author’s numerical demonstrations effectively follow this reasoning, since they provide buyers for the entire stock. His objection concerns the explanation attributed to him:

Aber es wundert mich aufrichtig, daß er dieselbe Erklärungslinie nicht auch schon in meinen eigenen Erläuterungen zur Sache erkannt, sondern mir eine ganz andersartige, unzutreffende Zwischenmotivierung zugeschrieben hat.

English translation: But it sincerely astonishes me that he did not recognize this same line of explanation already in my own elucidations of the matter, but instead ascribed to me a quite different, inapplicable intermediate motivation.

The closing section returns to his earlier discussion: goods already produced and unusable for their owners’ personal needs must seek an outlet, with prices falling until buyers exist for the whole quantity. His example of 1,000 units locates the price between the valuations of the last successful and first excluded buyers; he sees no substantive difference between this and the defender’s much larger example involving shoes. He further recalls having explicitly identified the absence of excluded sellers as the explanatory key.

The afterword’s relevance lies in its precise account of how a general price formula applies under special market conditions. It also insists that a successful defense must preserve the original argument’s logical grounds. The final reference to costs and marginal utility extends the recommendation to consult his earlier treatment, but does not develop that further issue here.