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Basic Principles of Economic Value

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Boehm-Bawerk was an important economist in the history of economic thought and the Austrian school tradition.

In this work, he discusses and expands the theory of marginal utility, a theory conceived by Menger in order to explain economic value from a subjective perspective. The first part of the book is concerned with subjective value and the law of marginal utility, while the second part discusses objective value (the formation of prices). Boehm-Bawerk explains how the law of marginal utility can be employed as a general law to explain prices. Its relation to the law of demand and supply and the law of costs is further analysed concluding that the law of marginal utility is the most effective economic law to explain both economic value and price formation in general terms.

Boehm-Bawerk's work focuses on a narrow field of economic theory. In modern economics, the debate has long now died - subjective value, in one or another form, is the basis on which economic value is understood. However, during Boehm-Bawerk's times, it had been a heated debate with radically different schools of thought arguing for their value theory over the others. Boehm-Bawerk, however, seems to have been absolutely right when he stated "A theory that fails to develop the theory of subjective value is built on quicksand".

"Basic Principles of Economic Value" is a book of specific historical importance in economic thought, and I would advice it to everyone interested in value theory and its development throughout history.