Eugen von Böhm-Bawerk on Zuckerkandl’s Theory of Price (1889)

Eugen von Böhm-Bawerk’s review of Robert Zuckerkandl’s Zur Theorie des Preises evaluates both its extensive history of economic doctrines and its shorter constructive account of price formation. Its central judgment is strongly favorable but differentiated: Zuckerkandl’s historical analysis is an outstanding contribution, while his theoretical revisions sometimes misrepresent existing marginal-utility research. The review closes by defending marginal utility’s growing acceptance and its compatibility with empirical economics.

Böhm-Bawerk first emphasizes the difficulty of mastering the enormous literature on value and price. Zuckerkandl’s achievement lies not simply in organizing this material but in drawing theoretical insight from its development:

Sie ist ungemein reichhaltig, klar geordnet, flüssig, ja elegant geschrieben, und, was das wichtigste ist, sie zieht sehr glücklich und überzeugend die Erkenntnisfrüchte aus dem geschichtlichen Entwicklungsgange heraus.

English translation: It is uncommonly rich, clearly ordered, fluently, indeed elegantly written, and, what is the most important thing, it draws the fruits of knowledge out of the course of historical development very happily and convincingly.

The decisive historical distinction is between subjective and mechanical theories. Mechanical explanations derive prices directly from external circumstances, overlooking the human judgments through which those circumstances become economically effective. Zuckerkandl groups supply-and-demand doctrines, production theories, and labor theories under this heading. Subjective theories instead seek to explain how external conditions alter people’s assessments of goods and thereby influence prices. Böhm-Bawerk endorses this explanatory shift and presents marginal utility, associated with Jevons and especially Menger, as its developed form and the foundation Zuckerkandl accepts for further inquiry.

The shorter constructive section addresses the tasks of price theory, value and valuation, and price formation. Böhm-Bawerk particularly welcomes the demand for separate analyses of different classes of price formation, since their determining factors occur in different combinations. He also praises Zuckerkandl’s treatment of the relationship between abstract models of self-interested market behavior and actual economic life:

Ueberhaupt zeigt der Verfasser hier und sonst einen frischen empirischen Zug und ein glückliches Gefühl dafür, dass man mit theoretischen Formeln nicht in den Wolken schweben, sondern ihnen eine so sinnliche und plastische Beziehung zur Wirklichkeit geben muss, als es irgend angeht.

English translation: In general the author shows here and elsewhere a fresh empirical bent and a happy feeling for the fact that one must not hover in the clouds with theoretical formulas, but must give them as palpable and plastic a relation to reality as is at all possible.

This praise establishes the review’s methodological standard: abstraction should clarify observable processes rather than lose contact with them. Yet Böhm-Bawerk finds the discussion of value and valuation, the relation between value and costs, and the imputation of product value to complementary productive factors less successful. In his judgment, these passages fail to convey accurately what marginal-utility research has already established, while their polemics risk perpetuating misunderstandings. He offers no extended rebuttal; the reservations remain subordinate to his high estimation of the historical contribution.

The conclusion corrects Zuckerkandl’s claim that marginal utility has gained little ground in Germany:

Dieser Ausspruch wäre vor zwei oder drei Jahren noch zutreffend gewesen, heute ist er es nicht mehr.

English translation: This dictum would still have been apt two or three years ago; today it is so no longer.

Böhm-Bawerk supports this correction by invoking public and private expressions of assent from prominent German economists, including representatives of the historical school, alongside the theory’s rapid international diffusion. Crucially, he attributes its appeal to an empirical character that survives its abstract formulation. The review thus makes a broader disciplinary intervention: subjective price theory need not stand opposed to historical and empirical inquiry. Its growing acceptance promises, in Böhm-Bawerk’s view, a shared foundation from which the disputed theory of value can advance.