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DOI 10.1007/s10516-017-9348-0
Toward a Unified Theory of Value: From Austrian
Economics to Austrian Philosophy
Wolfgang Grassl1
Received: 22 April 2017 / Accepted: 19 July 2017
Springer Science+Business Media B.V. 2017
Abstract Under one understanding of marketing, this discipline focuses on the
creation of customer value. Although nobody doubts today that value is subjective
and it emerges from consumer judgment, the causality is less clear. Do producers
bring about value, or do consumers receive ‘raw’ products that only attain value in
their estimation? Or, do producers and consumers co-create value as much of
contemporary marketing theory assumes? Recent works on value creation, the
building of customer relationships, and the service-dominant logic are related to
insights derived from both Austrian schools of value theory. The emphasis on value
as a ratio between perceived benefits and perceived costs may be seen as a continuation of Menger’s and Wieser’s work. The focus on relations as a category
distinct from goods goes back to Böhm-Bawerk. And the service-dominant logic
reflects insights developed both by Menger and by philosophers of the Brentano
School. The direct influence of Austrian economics on business studies is small and
is restricted to very few scholars. But the potential is great for a fruitful development
of current approaches in marketing by drawing on insights from Austrian economics
and, perhaps even more so, from Austrian philosophy. This paper defines the
relations between the thought from economists and philosophers and presents
examples for how cutting-edge marketing thinking may profit from both Austrian
schools of value.
Keywords Value Marketing Menger Wieser Böhm-Bawerk Austrian
economics Austrian thought Austrian philosophy
& Wolfgang Grassl
[email protected]; [email protected]
St. Norbert College, De Pere, WI, USA
1 Introduction
There is no good reason to assume that a consumer’s choice between various
restaurants as a function of perceived benefits and cost and an art critic’s judgment
of the value of paintings on account of their properties are categorically different
from an accountant’s estimate of the ‘‘fair’’ value of an asset as its potential market
price or from a judge’s weighing of the severity of a crime against mitigating
circumstances, past criminal history, and other factors. A broadly conceived
philosophical realism would insist on recognizing the diversity of phenomena while
searching for underlying laws of valuation common to all areas of application. It
would then appear likely that the same mental processes explain all of these acts and
that valuation has a structure common to these instances.
The development of theories of value was a thriving industry among philosophers
and social scientists in the late nineteenth and the early twentieth centuries. With
few exceptions, such attempts have long been abandoned in favor of disciplinespecific approaches that either produce empirical data on human valuation, often in
a comparative context, or that collapse phenomena of value into single categories
such as price. Philosophers shun axiology and have relegated values to ethics and
aesthetics; for orthodox economists, values are at most exogenous variables that
inhabit the margins between the rational and the irrational because they upset neatly
ordered preferences; for sociologists, and even more so for anthropologists, values
tend to be specific and sometimes exclusive to societies and cultures. Over the past
half century, no discipline would really claim to have produced a consistent theory
of value, and certainly not one with explanatory power beyond a disciplinary
Among the last attempts at developing systematic theories of value were two (or
more) Austrian schools that were linked by many personal and intellectual
connections between their members. Both the First Austrian School of Value
Theory—economists inspired by Carl Menger, Eugen Von Böhm-Bawerk, and
Friedrich von Wieser—and the Second Austrian School of Value Theory—
philosophers influenced by the work of Franz Brentano—developed accounts of
value for which they claimed, certainly to different degrees, some general
applicability. These schools did not coalesce toward an understanding of value
that was commensurable. It is obvious that certain Austrian philosophers—notably
Christian Von Ehrenfels and Oskar Kraus, and even Alexius Von Meinong—
borrowed quite substantially from the economists; it is less clear whether Austrian
economists—with the exception of occasional citations in Böhm-Bawerk and in
more marginal figures such as Oskar Engländer—were in any significant measure
influenced by the philosophers.1 Where Brentano, Meinong, and Ehrenfels, but also
philosophers under their influence such as Edmund Husserl, Max Scheler, Oskar
Kraus, Dietrich von Hildebrand, or Aurel Kolnai, elaborated theories of value,
Austrian economists kept their teachings on value to a few basic assertions: that the
See Eaton (1930), Kraus (1937), Fabian and Simons (1986), Grassl (1982, 1986), Smith (1986), Smith
(1994), Chisholm (1986b) and Dappiano (1996). The Austrian School of Art History was also influenced
by Brentano; Alois Riegl’s theory of value shares characteristics also with the Austrian economists (see
Svoboda 2011).
value of a thing must be distinguished from the thing itself; that value is subjective;
that it depends on perceived human needs; that it is determined by the marginal
rather than the total utility of consumption.
It has been questioned whether the Austrian School of Economics has ever
sought to develop a theory of value that goes beyond what some regard as either
undisputed insights or empirically trivial axioms of praxeology. Wieser may have
gone farthest in having ‘‘attempted to exhaust the entire sphere of the phenomena of
value without any exception.’’2 However, already Menger had introduced an
important restriction: value was not to be understood as the ‘‘species value’’ of a
class of goods but always as the ‘‘concrete value’’ attaching to specific units of a
good.3 The level of analysis was thus different from that of the Second Austrian
School, which was to study value exactly at the ‘‘abstract’’ level of species of
actions. The two groups came to explain different phenomena—economic and
moral valuation, respectively—with the Second School claiming greater applicability by extending its reach beyond ethics. Austrian economics and philosophy
therefore serve as an interesting case as to whether a general theory of value is
possible that combines central elements of both traditions while ignoring more
peripheral tenets. Members of both Austrian schools have indeed endeavored to
develop a general theory of value, notably Meinong, Ehrenfels and Josef Kreibig
among the philosophers, and Böhm-Bawerk among the economists. It is fair to say
that they have not fully achieved it. Rather, members of both groups continued to
speak of goods ‘‘in the sense of ethics’’ and ‘‘in the sense of economics.’’4
The call for a general theory of value would be repeated, even though it has been
recognized that philosophers such as Ehrenfels had taken some strides toward it.5
However, in the course of the twentieth century, attempts at developing a general
axiology have been largely abandoned (if one disregards endeavors such as Robert
Hartman’s value science, which has not achieved a lasting impact). Value was either
reduced to other entities, confined to a meaning only within particular disciplines, or
rejected as a scientifically legitimate concept altogether. Alfred Marshall’s
Principles of Economics, which in 1890 laid the foundation of neo-classical
economics, not only frequently confused utility and value; it also reduced value to
exchange value. But where it correctly understood value not as a quantity but a
relation, it drew the wrong conclusion that ‘‘the term value is relative.’’6 Differently
from the Austrian economists, Marshall identified the subjective nature of valuation
as a mental act with ontological relativity. It has by now become all but impossible
for an economist to talk in any cogent way about value.
Marshall made only one of many pronouncements in the intellectual world in
favor of value relativism. The proliferation and inconsistency of concepts of value
becomes even more confounding if valuation in ethics, aesthetics, finance,
marketing, or criminal law is considered. The prevalent assumption today is that
Von Wieser (1893, p. xxxv).
See Yagi (1993, p. 709).
Kraus (1894, p. 53).
Perry (1926, ch.1) and Eaton (1930).
Marshall (1890, p. 61).
each domain of phenomena, however arbitrarily it may be demarcated from others
or carved out of human experience as a whole, is subject to its own régime of
valuation. If laws of valuation are admitted at all, they are deemed to be confined to
a certain precinct of reality. Linguistic philosophy has attempted to replace them by
analysis of ordinary language. The logical implication is that a general theory of
value is impossible and should be abandoned, as has indeed been suggested.7
This paper will argue that the two Austrian Schools share enough common
ground that, by drawing on some essential assumptions in each camp, a general
theory of value can be developed. It must start from the philosophy of the Second
School. Its test will lie in its ability to account for empirical facts about valuation
such as they are studied in consumer marketing or in the disciplines founded on
2 Two Austrian Schools: Disjoint or Compatible?
The question of the affinity between the First and Second Austrian Schools has been
answered in the positive. This affinity has been located in a non-Kantian account of
a priori knowledge as formulated first by Husserl and Adolf Reinach, which is
implicitly present also in Menger’s school.9 It also underlies the theory of value
developed by the Austrian School of Art History, whose central exponent Alois
Riegl studied under both Brentano and Meinong.10 But no strong claim has been
made for an affinity on the grounds of ontology apart from pointing to the
ontological individualism defended by the economists.
However, the supposed Aristotelianism of the First Austrian School, which was
to be the glue that binds it to the Second School, is up for question especially on
grounds of ontology. As an assessment criterion one may consider the classical
Aristotelian ontological square. It distinguishes between substances and accidents
(or qualities), which can be either universals or particulars (Fig. 1)11:
Aristotelianism would require that value, as a quality, inheres in particular
substances (such as in this excellent book) while at the same time being an instance
of excellence in books. But Menger did not allow for quality universals. He insisted
on deriving the value someone attributes to a good from ‘‘the importance of the
particular satisfaction that depends on his command of the good.’’12 Even more
clearly, he dismissed any ‘‘species value,’’ or the value of an abstract class of goods,
and admitted only ‘‘concrete value’’ attaching to specific units of a good. Menger
rejected any ‘‘abstract’’ value. Other Austrian economists joined him in assuming
that it is always the particular preferences of individuals that constitute the value of
See Smith (1947).
Empirical validation will be left to future publications.
See Smith (1990, 1994, Ch. 10).
See Svoboda (2011).
See Aristotle, Categories, II.
Menger (1976, p. 146).
Fig. 1 Aristotle’s ontological square
particular goods.13 One might see this as a continuation of Aristotle’s claim that
what is general does not exist in isolation from what is individual, and especially of
his argument that the form of the good (if it were separate and not a part of this
world) would be useless for human action, since what we want to know is specific
things that are good. But Aristotle allowed for universals to be in some sense
contained in particulars whereas such immanent realism is less clear for most
members of the First School. Menger’s distinction between real and imaginary
goods may still parallel Aristotle’s distinction between real goods and apparent
goods which, like the analogous distinctions between right and wrong desires and
between natural and acquired desires, reveals a conception of the natural and
normative order of things. Menger’s particularism may still be compatible with a
broadly conceived Aristotelianism. But this is certainly not the case for Ludwig Von
Mises, whose rejection of essences (apart from his aprioristic rationalism) make him
appear closer to the neo-Kantian than to any Aristotelian program. This transpires
particularly from his rejection of any form of universals.14 Consequently, Mises
came to criticize both Menger and Böhm-Bawerk for their supposed deviation from
strict subjectivism by making concessions to an ontological realism that might be
identified as Aristotelian.
Where the Austrian economists were particularists, the philosophers following
Brentano explicitly extended foundation relations from individual cases to species.
Husserl regarded species foundation as more fundamental such that a foundation of
a particular object a on an object b is to be understood in terms of the foundation of
the corresponding species A on B.15
Another crucial difference between the two Austrian schools must be located in
the distinction between intrinsic and instrumental value. In one formulation, this
difference is that between either valuing ends of desires or actions themselves or
only the means towards these ends. Mises, for example, reduced it to this choice,
and he did not believe that any theory of intrinsic value was possible.16 Most
Austrian economists followed him in this; only a more marginal figure like
See Engländer (1935).
Von Mises (1996, 124 n3): ‘‘Classes are not in the world. It is our mind that classifies the phenomena
in order to organize our knowledge’’.
Husserl (2001), vol. II, p. 25 (sect. III, ch. II, §14); on this, see Correia (2004).
Von Mises (1996, p. 14f).
Engländer, who used Brentano’s idea on value, saw all value as primary or
intrinsic.17 The philosophers of the Second School, of course, dwelled on intrinsic
value. For Brentano, the concept of intrinsic goodness was analyzable in terms of
the correctness or worthiness of an attitude toward it.18 Meinong, in his elaborations
on ‘‘impersonal value’’ (unpersönlicher Wert), regarded things such as knowledge
and insight, beauty and fittingness, and the exercise of virtue, as intrinsically good,
and their opposites as intrinsically evil.19 Husserl, Scheler, Kolnai, von Hildebrand
and others have all developed theories of intrinsic value. Ehrenfels and Kraus were
among the few who considered also instrumental value, particularly by importing
this concept from Austrian economics.
Economic value was long discussed mainly against the background of Adam
Smith’s distinction between value-in-use and value-in-exchange. Philosophical
tradition has added two further crucial distinctions: those between subjective and
objective value and between intrinsic and instrumental value. These distinctions do
not yet consider the source of valuation, as lying in a judgment, in emotions, or in
desire—on which there has also been considerable controversy. Both Austrian
schools have occupied different positions on these issues, and individual members
have crossed the floor and changed their previous views, which makes a systematic
comparison no easy task.
Smith saw in exchange value the determinant of price, which is formed through
exchange on markets. This was the concept of value that economists, nearly
exclusively, have considered ever since. It is unfortunate that in economics
objective theories have typically been reduced to cost-of-production, and especially
cost-of-labor theories whereas a more generic definition simply assumes that
properties of the real world—of products, markets, production technology, or
distribution structures—provide affordances (in the sense of Gibson’s ecological
psychology) for consumers and producers to form evaluative judgments.20
Objective value need not depend on supply-side factors alone but may include all
features of existing and non-existing products and markets with respect to how they
are judged by producers or consumers.21 The fixation of neo-classical economics on
exchange value, instrumental value, and subjective value has obliterated the need
for a theory of value in the first place, with the concept itself often simply being
identified with price. Thus the pioneer of general equilibrium theory, Gérard
Debreu, in his seminal monograph Theory of Value: An Axiomatic Analysis of
Economic Equilibrium (1959), for which he was to receive the Nobel Memorial
Prize in Economics, did not even define value, except in a purely formalistic
manner: ‘‘The value of an action a relative to price system p is
p h ah
See Engländer (1914).
See Brentano (1969, p. 18).
See Von Meinong (1968, pp. 280frf., 425ff., 625ff., 639).
See Grassl (1999) and Chemero (2003).
See Woo (1992, pp. 23ff).
i.e., the inner product p a.’’22 An action for Debreu is a point in commodity space
Pl (where l is the finite number of distinguishable commodities) or ‘‘a specification
for each commodity of the quantity that he [i.e., the agent] will make available or
that will be made available to him.’’23 Interestingly, this definition is not without
similarity to the intuitionistic (and equally axiomatic) way Mises wrote about value.
Epistemological arguments must be kept apart from ontological ones. How value
is recognized (or perhaps ‘‘created’’) is a different question from what value is and
how it exists. Epistemological subjectivism does not eo ipso imply ontological (or,
for that matter, epistemological) relativism. Menger made the central point that the
attributes of goods were nothing ‘‘inherent’’ to them, or were not their ‘‘properties,’’
but result only from their relationships to human beings and their needs.24 This
implies differences from the relations as defined in Aristotle’s ontological square
(Fig. 1). Yet Menger conceded two intrusions of objectivism into his value theory:
the objective ability of goods to satisfy needs and the distinction between
‘‘imaginary’’ and ‘‘real’’ needs, which could only be upheld if there existed some
objective standard by which they were real or not. He integrated a subjectivist
explanation of exchange value with an objectivist description of well-being that
distinguished between real and imaginary values and goods. Mises would later
reproach Menger for this breach of consistent subjectivism.25
The First Austrian School then maintained that the value of a good is determined
by its marginal utility, i.e. the utility a further unit of the good would add. Since
utility can only be assessed subjectively, no objective determination of value by
reference to costs of production is possible.26 This idea spread to some members of
the Second School. Meinong accepted marginal utility as determining instrumental
value, and for Ehrenfels it became a central plank of his theory of value.27 Whereas
Meinong did not place this idea anywhere close to the center of his philosophy of
value, which was to move from a subjective to an objective basis, for Ehrenfels
marginal utility theory became a focal idea although he limited it to instrumental
value (Wirkungswerte).28 Yet Ehrenfels saw instrumental value not outside of what
Smith had called value-in-exchange; as for the Brentano school in general, this
economic distinction played no role for him.
The Austrian economists largely prioritized exchange-value over use-value. This
fixation may also be one of the reasons why the school has remained largely
irrelevant for the study of actual business activity, whether it concerns production,
investment, financing, advertising, or marketing. Businesses certainly operate on
markets and are influenced by market prices that arise from exchange. But
businesses primarily create value-in-use: ‘‘hard’’ (or objective) use value that can be
readily quantified, such as raw material savings or product features, and ‘‘soft’’ (or
Debreu (1959, p. 33).
Ibid., p. 32.
See Menger (1976, pp. 52, 58, 101, 116, 120, 145).
See Von Mises (1960, p. 184).
See Von Wieser (1891, 1893).
See Von Meinong (1972, p. 125) and Von Ehrenfels (1897–98).
See Von Ehrenfels (1897–98, §24).
subjective) use value that cannot be quickly quantified or monetized, such as ease of
handling or improvements in quality or safety. Marketing studies how value-in-use
influences value-in-exchange, which is a perspective that was alien to the First
Austrian school. An interesting exception was Böhm-Bawerk, who worked at a
‘‘rehabilitation of use value, which political economy had completely ignored by
identifying economic value with exchange value.’’29
From the perspective of the Second Austrian School, the very notion of value-inexchange raises questions, for it implies that values are tradables, which in turn
presupposes that they inhere in products that are exchanged (unless one wants to
sustain some psycho-physical parallelism according to which valuations as mental
acts are exchanged). Reducing the value of a product to its exchange value thus
objectifies value—which is the opposite of what both Brentano and the Austrian
economists held. Value as such should therefore not be seen as a function of market
exchange but as a judgment.
The Second School was divided on the basis of valuation, especially on whether
it was feeling, desire, or cognition. Meinong believed in feeling, Ehrenfels in desire,
and Scheler in cognition as apprehending value-feelings. However, the philosophers
also shared certain beliefs: First, they all focused on intrinsic value even though they
may, like Ehrenfels, also have considered instrumental value. Second, Brentano and
all members of his school, even until the third generation that includes Kolnai and
Ingarden, recognized an ordering of values. More generally, the Second School held
that values had a structure. Husserl, Scheler, von Hildebrand, Ingarden, Kolnai and
others worked on the assumption that different sorts of intentional stances have
different structures that are sensitive to qualities and patterns in their objects.
In short, we learn from Austrian philosophers that there is a structure to valuation
that the Austrian economists did not accommodate. It goes beyond the sequence in
which wants are satisfied, which marginal utility theory did recognize. These laws
of value pertain to the composition of value itself, both at the level of individual
mental acts and at that of value experience as a whole. More generally, it has been
pointed out that the First Austrian School never developed a theory of value
formation, i.e. how consumers acquire the preferences they hold.30 Only exchange
value was taken seriously, despite the misgivings Böhm-Ba-werk expressed about
this limitation. Austrian economists have never moved even close to the detailed
empirical studies of how consumers develop valuations, and ultimately make
choices, that are at the center of marketing science. With their methodological
stance, they supported the development of value theory from a study of real
phenomena to an abstract and formal discipline.31 The Second Austrian School
developed several accounts of how values are generated, starting from the common
ground of Brentano’s descriptive psychology of mental acts.
A further difference lies in views on the aggregation of value. Members of the
First School insisted that because acts of valuation were always particular to
individuals, no value could be construed as the sum of individual valuations. Any
See Von Böhm-Bawerk (1891, Book III, ch. I, §1; Book III, ch. 8, §§2ff).
See Woo (1992, p. 42).
See Gramm (1988).
ranking of values by their intensity was possible only for an individual but not
across individuals, because the specific value attributed to particular goods may also
be qualitatively different for the respective individuals. One kilogram of Granny
Smith apples may have a very different meaning for a rare eater of fruit than for a
pomophile. Brentano and his school, on the other hand, allowed for the summation
of particular goods, but also for the ordering of these goods with respect to
preferability, for he regarded preference as a function of both qualitative and
quantitative differences.32
The supposed affinities between the two Austrian schools must therefore be
relativized. In particular, the thesis of a shared Aristotelianism must be abandoned if
this is to mean the assumption of essences, de re causality, and the ontological
square.33 Some members of the First School come close to embracing such a
position but others do not. All the more the question poses itself whether the First
and Second Austrian Schools share enough beliefs to be unified. A strong argument
in favor of a unified theory of value would its applicability outside philosophy and
economics, for example to art and to consumer behavior.
3 Unified Austrian Theory of Value
A Unified Austrian Theory of Value must be built on the ontological and
epistemological basis that was laid by Brentano and his followers. It must
accommodate fundamental insights gained by the First School, for example that
consumers never receive benefits without attached costs. And it should clearly be
supported by current psychological theory.
The Unified Austrian Theory of Value may then conceptually and graphically be
understood as being based on a triad configuration. The three vertices are the person
making valuations, the object being valued, and the resultant value itself. Several
relations obtain between these components (Fig. 2):
Humans have mental states that are about objects, the properties of which in turn
afford them to have those mental states. Intentionality (in Brentano’s sense) is thus
inversely related to affordance (in Gibson’s sense).34 Valuers ascribe benefits to
some or all of these affordances, which constitute the subjective value of an object
as understood by a valuer. These benefits can be realized or obtained only at a cost
to the valuer; benefits are in this sense inversely related to the costs of obtaining
them. Several members of both Austrian schools (although predominantly of the
Second School) captured aspects of the value triad. Ehren-fels, for example, defined
value as ‘‘the relation, erroneously objectified in language, of an object, O, to the
desire-disposition of a subject, S, according to which O would be desired by S, in
so far as S did not possess, or ceased to possess, the conviction of the existence
See Kraus (1914, p. 27f).
Pace Smith (1990, 1994, pp. 320–329).
See Gibson (1986, ch. 8) and Chemero (2003).
Fig. 2 The value triad
of O.’’35 No matter whether the psychological substrate is emotion or desire, value
depends on a relation in which an object has the capacity to elicit an intentional
attitude toward it; value is founded on a valuer and an object, and is in this sense a
third entity, although it exists in the mental act, and any reification must therefore be
avoided. Under the influence of the First School, both Meinong and Ehrenfels
assumed that in judging the value of an object, valuers operate under relative
scarcity, because the desirable increase of the most pleasurable objects always
exceeds available supply. All acts of valuation thus involve an economizing
A part of this understanding is captured by how business research commonly
conceives of value. In the marketing literature, value is typically defined as
i.e. as a ratio of perceived benefits B and perceived costs C, or, in an expanded form
that assigns weights wn to individual benefit factors bn and disaggregates costs to
consumers (at least) into price P and transaction costs TC, as follows:
Pn Bx
i¼1 fb1 ; b2 ; . . .; bn g fw1 ; w2 ; . . .; wn gx
Vx ¼
Px þ TCx
f bn g 2 B x ;
½wn ¼ 1;
bn ; wn ; Px [ 0:
Von Ehrenfels (1896a, b, p. 104).
This definition preserves the idea that value as perceived by consumers is subjective
in the sense of deriving from a mental act, that it is relational as expressed by a ratio,
with benefits and correlated costs being interdependent, and that changes at the
margin, DBx or DCx, influence valuation.36 It is consistent with the assumptions both
of neoclassical microeconomics and of the value theory of Austrian economics.
Even Mises understood cost as the ‘‘value of the price paid’’ and as ‘‘equal to the
value attached to the satisfaction which one must forego in order to attain the end
aimed at.’’37 The model is general enough by not restricting benefits to specific
categories while making the widely acceptable assumption that every benefit
requires some effort or sacrifice to obtain it. Although this thought may have been
outside Brentano’s philosophical inventory, some members of the Second School,
notably Ehrenfels and Kraus, endorsed it.38
The relations between the three components of the value triad (Fig. 2) may then
mathematically be represented as a composition of functions:
where a ¼ i1 ; b ¼ c1
s:t: m ¼ i1 ; c1
The ability of an object to have value—or to serve as a value-maker—is thus a
(multiplicative) product of its affordance and benefits. Value-makers are founded on
objects and their potentiality to create benefits; but humans do not regard all but
only some elements of this potential as useful, desirable, or appealing, and these
benefits will be so to varying degrees. Valuation thus has an objective and a
subjective component. It is its objective component that makes it non-arbitrary, and
it is its subjective component that ties it strictly to a mental act. However, valuation
is not relative, because these mental acts are grounded in the objects of valuation to
which they stand in an intentional relation and which allow the mind to select
certain properties to be regarded as benefits and to be assigned certain weights.
Moreover, valuation proceeds according to certain laws of composition, intensity,
polarity, etc., that descriptive psychology since Brentano and its empirical
derivatives (for example, Gestalt psychology) have sought to elaborate.
This theory of value is broadly analogous to truth-maker theories. According to
Aristotle, for every true judgment there must be some entity which makes it true.
Just like these are about the metaphysics of truth rather than being a definition of ‘‘is
true’’ or of truth, the Unified Austrian Theory of Value is about what it means for an
object to have value for a person rather than what value is.39 For the Second
Austrian School with its roots in Aristotle and in scholasticism, the assumption of an
ontological cohesion—or an isomorphism—between truth, goodness and beauty,
was natural. All three rely on judgments which are founded on properties in their
See Sánchez-Fernández and Iniesta-Bonillo (2007).
Von Mises (1996, p. 97).
See Grassl (1986).
See Mulligan et al. (1984) and Smith and Simon (2007).
intentional objects.40 For Aquinas, of course, truth, beauty and goodness (which
may here stand for what is positively valued) are ‘‘transcendentally one’’ in the
sense that each is being apprehended via a different modality: truth is being as
known, goodness is being as rightly desired, and beauty is being as rightly admired.
If at least the founders of the First Austrian School were indeed influenced by
Aristotle (and possibly by scholastic philosophy), as is sometimes assumed,41 what
Mises called ‘‘use-value in the objective sense,’’ i.e. ‘‘the relation between a thing
and the effect it has the capacity to bring about’’42 must be taken seriously. Mises
did not regard it as a matter for economics.
The guiding idea underlying the Unified Austrian Theory of Value is that of the
subjectivity of valuation as grounded in objective features of objects. There is a
grammar of valuation with its syntax and semantics. For Brentano, truth, beauty, and
goodness, shared in being normative concepts—they carry with them the sense of a
requirement or a demand. A judgment is true if and only if it corresponds to that
domain of reality it is about; values are emotions that fit what they are about; the good
is what is worthy of love and of being chosen; the beautiful is that which is worthy of
admiration. Not every presentations is of particular aesthetic value, though; in order to
be so, it has to become the object of an emotion in which one correctly takes a positive
stance towards it. In short, according to Brentano, an object is beautiful if a
presentation that is directed at it arouses a correct, positive emotion, i.e., a form of
pleasure; it is ugly, on the other hand, if a presentation that is directed at it arouses a
correct, negative emotion, as a form of displeasure. In valuation, judgments unite with
feelings, which makes the psychology of value of the Second School more complex
and realistic than that of the First School, which in fact had little to say about what goes
on in economic agents when they choose: ‘‘Action is the result of choice among
alternatives, and choice reflects values, that is, individual preferences among these
alternatives.’’43 For the Austrian economists, valuation has no structure or ordering
that could be generalized; they are ultimate data, thus making an empirical science of
value impossible. The how and why of people forming values is regarded as the subject
of pschology whereas economics (at least for the proponents of praxeology) ‘‘has
nothing to do with the content of ends or with the internal operations of the mind of the
acting man.’’44 Since the values of people as consumers, family members, investors,
soldiers, or art collectors, differ rather than being drawn from the same pool, the First
School does not provide a promising springboard for a general value theory.
Under these premises, a Unified Austrian Theory of Value may be characterized
by the following necessary (if by themselves not sufficient) propositions, which find
support in the writings of at least some proponents of both schools.45
See Aristotle, Metaphysics, Book V, 1020b.
See Smith (1994, pp. 320–325).
Von Mises (1996, p. 120).
Rothbard (1956, p. 224).
Ibid., p. 229.
The propositions are not necessarily independent of each other but overlap. They are only meant to
characterize typical traits of a Unified Austrian Theory of Value.
3.1 Values Arise from a Mental Act of Valuation
Values are subjective in the sense of being dependent on human cognitive acts
rather than objective in the sense of belonging to an external, impersonal, and
immutable (i.e., Platonic) reality. For Brentano, value was an inseparable moment
of a mental act; yet his theory of value was also objective by presupposing that
evaluations—like judgments or emotions—are either correct or incorrect.46 All
Austrian philosophers shared in this minimum version of subjectivism. Nothing is
thereby said about the respective roles of judgment, desire, and emotion in
valuation, on which members of the Second School differed. The ontological status
of value is subjective; human reason allows for the cognition of objective laws of
Members of the First School regarded subjectivism as a hallmark of their
tradition. However, its exact meaning was not always clear. Wieser and Mises were
most forceful in rejecting essentialism or any teleological version of causality. On
the other hand, some Austrian economists considered also use values and conceded
the fact that properties of products such as their weight, texture, and design may
stand in some systematic relationship with acts of valuation.48 The putative
inconsistency is best solved by introducing a distinction between two senses of
‘‘subjective.’’49 In the epistemic sense, subjectivity of value means that economic
agents judge whether an object may satisfy their needs; objects do not impose a
certain valuation without judgment. Both Austrian Schools would seem to subscribe
to this interpretation. However, in the stronger ontological sense, subjectivity for
Menger was what demarcated goods from things in general. He laid down four such
A human need.
Such properties as render the thing capable of being brought into a causal
connection with the satisfaction of this need.
Human knowledge of this causal connection.
Command of the thing sufficient to direct it to the satisfaction of the need.
Value is then ‘‘the importance that individual goods or quantities of goods attain for
us because we are conscious of being dependent on command of them for the
satisfaction of our needs.’’51 While both Austrian schools agree on value as a mental
act, two aspects have remained contentious: the logical structure of value and its
domain of application.
See (Chisholm 1986b, pp. 183 and 192f).
See Fabian and Simons (1986), Grassl (1986), Smith (1986) and Ingarden (1983, pp. 141ff).
Von Böhm-Bawerk (1891, Book III, ch.1, §4).
See Zúñiga y Postigo (1998).
Menger (1976, p. 52).
Ibid., p. 115.
For Menger and Böhm-Bawerk, valuation was an irreducible mental act. They
discussed the relationships between valuation, need, and economic goods, but they
did not concern themselves with the structure of the act itself. For Mises (and
particularly for his epigones), on the other hand, the logic became reversed as the
concept of action was accentuated as the foundation stone of a praxeological
axiomatic system: ‘‘the scale of values or wants manifests itself only in the reality of
action. These scales have no existence apart from the actual behavior of
individuals.’’52 For Mises, action comes first, and it reflects values, where ‘‘every
action is always in perfect agreement with the scale of values or wants because these
scales are nothing but an instrument for the interpretation of a man’s acting.’’53 Not
only does this exclude the rationality of any normative theory of value formulated in
terms of good and bad, or at least better and worse; it also assumes a strong notion
of free will, since every action is deemed to be explicable by nothing but a
subjective preference order, an assumption not dissimilar from Paul Samuelson’s
theory of revealed preference. It also betrays circular reasoning, for action reveals
values, which are then used to interpret action. This is not in the least the
understanding of valuation as mental acts that Brentano developed and that was still
compatible with the subjectivism of Menger and Böhm-Bawerk.
If values arise from mental acts, it is not clear that these can be limited to
particular types of objects such as concreta. While the Brentano School analyzed
feeling dispositions (such as in the famous analysis of Schadenfreude, or ‘‘morose
delectation’’), Menger applied economic value not to classes or species of goods but
restricted it to ‘‘concrete things.’’54 In this sense, he anticipated the later, reist phase
of Brentano’s philosophical development. Austrian economists would continue to
eschew classes of wants.55 Yet the phenomenological tradition and some directions
in psychology have set out to develop a grammar of mental phenomena at the level
of species.
3.2 Values are Intentional
Like all mental acts, valuation is directed at objects. Brentano held every mental
activity to involve ‘‘reference to something as an object. In this respect every mental
activity seems to be something relational.’’56 Brentano actually made three claims:
first, that mental acts such as loving, hating, desiring, believing, judging, or
perceiving, are directed towards things different from themselves; second, that it is
characteristic of the objects towards which the mind is directed that they have the
property of intentional inexistence; third, that only mental states exhibit intentionality. Although intentionality became the cornerstone of the Second School, the
exact nature of the relation between valuer and object remained opaque. It is about
Von Mises (1996, p. 95).
Menger (1976, p. 116 n3).
See Von Mises (1996, p. 123f).
Brentano (1995, p. 211).
or represents objects and states of affairs under a particular psychological mode or
format. Perceptions, beliefs, desires and intentions then illustrate a basic duality of
the intentionality of the mental: that between mind-to-world and world-to-mind
directions of fit. Brentano realized that intentional objects may not exist or be
abstract objects. Meinong, too, recognized that if all acts are conceived as relations,
ontological status must be attributed also to non-existent entities, since only the
latter could serve as the relata of mistaken assumptions of existence. However, what
may be a problem for judgments is none for Brentano’s ‘‘phenomena of love and
hate’’ (including Meinong’s Dignitiva). Within the Second School, much divergence developed as to the nature of intentional inexistence. Thus we may certainly
value perfect justice or affluence for everybody even though empirically these states
of affairs do not actually obtain. We may appreciate the heroic deeds of Odysseus
even though he was not a historical person. Stephan Witasek, a student of Meinong,
extended this argument to aesthetic judgment—one may well admire the beauty of
fictional persons or of a fable that never happened.57 Similarly, Mises conceded that
subjective use-value can be attached to things of which ‘‘people erroneously believe
that they have the power to bring about a desired effect.’’58 He recognized the
philosophical problem that riches one does not have, or one mistakenly believes to
have, may yet afford high appreciation.
Intentional inexistence as the world-to-mind direction of fit is here understood as
the affordance of objects to be valued because of specific features. Austrian
philosophers were interested in combating the arbitrariness of valuation—de
gustibus non est disputandum makes for uninteresting philosophy, horrible morals,
and catastrophic public policy. Natural, ethical, aesthetic and other facts about
objects facilitate or constrain their valuation. It is interesting that Kolnai described
Meinong’s concept of intentionality as ‘‘intention (Gegenständlichkeit) as linked
essentially, though not in a uniform or unequivocal or causally necessary fashion, to
condition (Zuständlichkeit).’’59 But this objective facet about value does not suffice;
it must be combined with valuers recognizing these ‘‘mere’’ affordances as allowing
for the derivation of benefits. These, then are conditions 2 and 3 in Menger’s
definition of a good.60 On this ground, reconciliation between the two Austrian
schools seems possible.
The intentionality of value in this sense gives it a degree of objectivity. Brentano
was a subjectivist only by regarding valuation as a mental act; the quality of this act
depends on the intentional object, which may be worthy of appreciation or not. A
similar understanding has been proposed by Alois Riegl, a focal member of the
Austrian School of Art History. In his theory of monuments, Riegl drew a
fundamental distinction between intentional and non-intentional monuments, where
the first serve to commemorate specific persons or events whereas the meaning of
the second, which have emerged only since the Renaissance, is more open-ended
and left to the viewer to define: ‘‘When we call such works of art ‘monuments’ it is a
See Huemer (2009, pp. 278ff).
Von Mises (1996, p. 121).
Kolnai (1998, p. 582).
See above, fn. 44.
subjective rather than an objective designation.’’61 It is the moments that send a
clear message of historical memory—of Napoleon’s victories or defeats—that have
an ‘‘objective’’ purpose, not the arbitrary objets d’art.
3.3 Values are Rooted in Psychology
Members of the First School held ambiguous and inconsistent positions on the
ontological status of value. While they agreed with the Austrian philosophers that
valuation was a mental and therefore subjective act, they were split on what came to
be known as psychologism. For Menger, goods-character and the order of goods
were nothing inherent in goods themselves but in the mind that evaluates them.
Goods do not have value unless humans are conscious of their importance for the
satisfaction of needs. In the second edition of his Principles, which was
posthumously published in 1923, even greater importance was given to the
psychological analysis of needs, possibly under the influence of the Austrian
philosophers.62 Menger moved from a decidedly subjectivist to a more naturalistic
concept of value, which Mises would later criticize as a ‘‘notorious slip’’
(offenkundige Entgleisung).63 Böhm-Bawerk, too, became interested in discovering
which psychische Akte were basic and causally relevant to economic decisions. His
capital theory crucially relies on the notion of desire. For Wieser, psychology
became a fundament of economics, which he understood as ‘‘applied psychology.’’64 Wieser did not resort to the ‘‘scientific’’ psychology of the behaviorists but
to the introspectionist and common-sense psychology of the Brentanian type: he
claimed that the economist’s data come from within his own consciousness and
from such external facts as he could observe in his day-to-day existence.65 Both
Menger and Böhm-Bawerk admitted psychology to economics at least by making
their value theories depend on needs. Later economists such as Franc Čuhel
developed even more elaborate psychological theories of needs.66 Whether they
were in their stance influenced by Brentano’s descriptive psychology must remain
conjectural.67 Later members of the First School clearly opposed psychologism.
Particularly Mises, together with Alfred Schütz, came to see valuation, as relying on
laws of ‘‘praxeology’’ within a aprioristic foundation. Yet at the same time,
Engländer regarded psychology as an indispensable foundation for economics: ‘‘We
can only penetrate to the inner essence of economic actions through motives.’’68
And with Friedrich von Hayek, a prominent exponent of the First School had a deep
Riegl (1982, p. 24).
It is reported that, since 1900, Menger had studied many works of psychology and physiology,
including those of Brentano, Kraus, and Ehrenfels. See Kauder (1965, p. 89).
Von Mises (1928, p. 36, 2003, p. 184).
Von Wieser (1884, p. 39).
See Von Wieser (1927, p. 3).
See Čuhel (1907).
See Grassl (1986, p. 150).
Engländer (1914, p. 1513).
interest in psychology without any cordon sanitaire dividing it from economics.69
He was in this influenced by Gestalt psychology, which had itself emerged from the
Second School.70
The Second School was, of course, deeply endebted to Brentano’s descriptive
psychology, which in the work of some followers led to empirical research. Many
have understood Brentano’s position on mental phenomena to be psychologistic,
despite his own rejection of psychologism, which he took to stand for a subjectivist
and anthropocentric view. Brentano’s descriptive psychology was meant to be the
theoretical science on which the practical disciplines of logic, ethics, and aesthetics
are based. Hence, he did adopt what Husserl later characterized as ‘‘logical
psychologism.’’71 Kraus and others analyzed how valuation depends on needs,
thereby drawing on work by the Austrian economists. Husserl, of course, criticized
psychologism in all its forms. But the rational psychology developed by the Second
School, which never excluded empirical studies but did not rely on them as defining
value, seems an acceptable ground on which to develop a general theory. Mises’
praxeological apriorism with its rejection of psychological explanations is an
exception, but not the mainstream, within the Austrian economic tradition.
3.4 Values are Founded on Objects
The objects of valuation in some sense inhere in attitudes directed at them.
Properties of these objects determine the values ascribed to them. This is one way to
understand the scholastic thesis of intentional in-existence. Brentano assumed that
value is in fact analogous to truth: ‘‘We call a thing true when the affirmation
relating to it is correct. We call a thing good when the love relating to it is
correct.’’72 If this is so, there must also be an analogue to truth-makers, as entities in
virtue of which sentences about them are true or false73: there must be something
like value-makers—parts of reality that ground value judgments. The Austrian
subjective theory of value is then founded on structures of the real world; it is a
realist theory by presenting value not as arbitrary but as determined by objective
reality. The object and the subject are correlated in the sense of an affordance: good
deeds afford and require to be loved with a correct love. Kraus indeed wrote that
‘‘value theory devotes its attention to both correlative moments [of form and
matter].’’74 This is a formulation that Brentano would have accepted. In the same
sense, Meinong wrote of the ‘‘basis of a disposition’’ (Dispositionsgrundlage) of
values as grounded in objects.75 The determination of values is therefore never
relative although value does not in any way reside in objects but is constituted by
See Hayek (1952).
See De Vecchi (2003).
Husserl (2001, p. 40).
Brentano (1969, §23).
See Mulligan et al. (1984).
Kraus (1986, p. 80).
Von Meinong (1972, p. 127).
the attitude of a valuing subject. For Meinong, objective properties of objects support
(and sometimes trigger) the ‘‘emotional significance’’ that is the basis of valuation.
Where Meinong saw emotions as the fundament of valuation, and desire as being only
derivatively influential, Ehrenfels held the opposite view, i.e. that something is good
because it is desired. Böhm-Bawerk was undecided on this issue; he seemed
supportive of Meinong when he identified ‘‘objective value’’ with ‘‘the power or
capacity of a good to procure some one objective result’’76 but he supported Ehrenfels
in making desire attribute utility to objects.77 And Menger, who was clearly a
subjectivist, saw separate satisfactions depend on particular goods, upon which they
are in a sense founded.78 Nothing in Menger or Böhm-Bawerk indicates a sensualist
nature of economic goods, which implies that features of real and in most cases
physical goods ‘‘afford’’ the satisfaction of needs and are in this sense at least
compatible with the assumption of value-makers. Menger indeed distinguished
between a subjective factor in the determination of value, which he identified in
‘‘differences in the magnitude of importance of different satisfactions’’ of needs, and
an objective factor, i.e. ‘‘the dependence of separate satisfactions on particular
goods.’’79 Such interpretation was, on the other hand, unacceptable to Mises, who
thought properties of products irrelevant unless reflected in the purely subjective
valuation of economic agents. Mises introduced a distinction between the praxeological notion of utility as ‘‘subjective use-value’’ and the technological notion of utility as
‘‘objective use-value’’ and concluded that ‘‘subjective use-value is not always based
on true objective use-value,’’ or ‘‘the power to bring about a desired effect.’’80 But
exactly this object-subject link is supported by empirical results of consumer research.
The view that values are founded on objects has recently been received into the
marketing literature. Affordances are adduced to explain constraints on consumer
valuation, for example why certain brands gain in brand equity independently of
promotional budgets.81 Marketing research in fact accommodates both an ‘‘internal’’ view according to which ‘‘value resides within the product […] and the
marketer is the one creating the value’’ and an ‘‘external’’ view ‘‘in which the
consumer is creating the value in terms of how the product is to be used.’’82
3.5 Values are Not Arbitrary
If values are founded on objects, they cannot be arbitrary but are determined, or at
least constrained, by structures of reality. The Second School clearly subscribed to
this view: Brentano developed a theory of intrinsic value the statements of which
were necessary and true (or, in his parlance, ‘‘apodictic’’ and ‘‘correct’’). Kraus,
Von Böhm-Bawerk (1891, Book III, ch.1, §4).
See Dappiano (1996, p. 396).
See Menger (1976, p. 131).
Ibid., pp. 122, 128.
Von Mises (1996, p. 121).
See Grassl (1999).
Hill (2013, p. 5).
Meinong, Scheler, Husserl, and their own followers, maintained this claim.83 Truth
is always preferable to falsity, the good to the bad, and the beautiful to the ugly. As
a corollary, Scheler would claim that only good actions can be the object of a duty.
Kolnai, von Hildebrand and other philosophers of this tradition became emphatic
realists about value who rejected the arbitrariness of valuation, for example by
pointing out that ‘‘there is only one morality’’ even though ‘‘its many different
aspects are always differently and imperfectly present to men’s minds.’’84
The First School took more heterogeneous positions on this issue. Menger
insisted that value is never arbitrary since it is determined by the recognition that a
particular good can satisfy a particular need; this knowledge by necessity brings
about valuation.85 Of course, values can then not be ‘‘independent real things’’,86
but are psychological entities afforded by properties of the world. It is not clear that
Mises would have accepted even this understanding of ‘‘arbitrary.’’ He certainly
regarded ethical judgments as being ‘‘arbitrary’’ and for this reason as having no
place in economics. Mises regarded even the fact that most people prefer a richer
supply of material goods to a less ample supply as a mere ‘‘datum of history’’ that
had no place in economic theory. For him, ‘‘there are no such things as eternal,
absolute, and unchanging values. The search for a standard of such values is
vain.’’87 Axiological relativism is not unknown within the First Austrian School.
The Austrian school of Art History, on the other hand, largely concurred with the
rejection of relativism. Riegl wrote that the ‘‘art-value’’ of a monument is established
by the requirements of the modern Kunstwollen, where the latter is not any arbitrary
feeling that imputes artistic status to objects ad libitum, but rather an intentional
mental act supported by certain configurations in the object and its natural and
historical environment.88 It conveys an ‘‘immanent sense within an artistic
phenomenon’’ that has (tentatively) been compared to Husserl’s eidetic reduction.89
3.6 Values Have a Component Structure
All acts of valuation have structure by being composed of parts. They are organic
wholes by being in some sense super-additive (or have Gestalt properties). By
building on ideas of Aquinas, Brentano recognized that value is characterized by
several kinds of organic unity.90 Intrinsic value is not merely a sum of its parts but
also of the relations among them and thus of the mode of composition of the whole.
The Second School and its derivative traditions such as phenomenology and Gestalt
psychology essentially build on this idea. For example, judgments of blame for a
harmful act may be seen as depending on both the damage caused by the act and on
See Chisholm Chisholm (1986a, b).
Kolnai (1969/70, p. 107).
See Menger (1976, p. 119f).
Ibid., p. 121.
Von Mises (1996, p. 228).
See Riegl (1982, p. 46f).
Panofsky (2008, p. 44).
See Chisholm (1986a, ch. 7).
the intent of the actor: Blame = Intent ? Damage, or alternatively, Blame = Responsibility 9 Consequences. An extended form can be proposed as follows:
Blame = Intent ? Damage - Recompense, or alternatively, Blame = (Responsibility 9 Consequences) - Recompense.91 Such cognitive algebra can be extended
to valuation, as the value of objects is largely determined by judgments of benefit
and cost to valuers. Phenomenologists such as Scheler, von Hildebrand, and Kolnai
worked in the same spirit by analyzing the component structure of moral
phenomena. Kolnai analyzed the complex relationship between the feeling of fear,
the threat that causes it, and the disposition to flee this cause.92 Adolf Reinach’s
theory of social acts detected material a priori structures in intentional acts such as
commands, promises, or grants, and his approach can be extended to valuation.
The elaborate structures of value the Brentano School and phenomenology have
uncovered were largely amenable to the Austrian economists, who differentiated
themselves from the agnosticism about value typical of economics at large. With his
‘‘compositive’’ approach, Menger sought to demonstrate how social phenomena like
money, trade, or market valuation, are built up or composed from the economizing
actions of individual agents. Natural organisms and social structures share the fact
that they are made up of a variety of parts or organs. Change to one of these parts, or
to the way several parts relate to each other, is likely to disrupt the organism or
structure as a whole. Menger contrasted such ‘‘organic’’ institutions with
‘‘pragmatic’’ institutions based on a planned and merely additive composition of
individual actions.93 He regarded the origin of money, which he compared to other
social institutions such as language, law, and markets, as ‘‘organic’’ in the sense of
not being intentionally designed yet reflecting the collective intentionality of
individuals. Inspired by Menger’s method, Hayek later developed his belief that
social phenomena are complex (and reflect a ‘‘spontaneous order’’) by being
structures possessing distinct properties independent of the particular properties of
the elements that compose them.94 From this assumption he derived a theory of
which components social institutions such as property, constitutions, or the family,
require for their flourishing. At the center of his investigation was how the
‘‘conscious action of many men produce undesigned results.’’95 While Hayek
advocated methodological individualism, he recognized complex spontaneous
orders in many natural and social phenomena and was interested in tracing their
origin and composition from individual elements.
The description of ‘‘Austrian Aristotelianism in the social sciences’’ as rejecting
‘‘social wholes’’ must therefore at least be qualified.96 Neither the First nor the
Second School assumed the sui generis existence of social collectives independently
of their members. But both schools were interested in how more complex
formations come about through aggregation. Ehrenfels developed his teleological
See Anderson (1996, ch. 2, 2013, ch. 3).
See Kolnai (1998, p. 584ff).
See Menger (1985, Book III, §§1–3).
See Hayek (1967).
Hayek (1979, p. 69).
Smith (1994, p. 327).
organicism into a theory of the social formation of values and of moral conflict.97
Even Hayek allowed for social wholes—not in an ontological sense but at least as
constructed out of the behavior and attitudes of individuals.
In analyzing value, the structure of wholes is of crucial importance. Brentano
drew a distinction between sum-wholes and product-wholes, and Husserl used it for
his mereology. Only in product-wholes (which G.E. Moore called ‘‘organic
wholes’’), super-additivity obtains. The difference between the two types of wholes
is due to the connections linking the parts, which for sum-wholes are not important
whereas they are vital for product-wholes. Thus value will be ‘‘organic’’ to the
extent that its components stand in a multiplicative (rather than an additive)
relationship. Austrian economists such as Wieser, by contrast, understood the
structure of value as additive.98 But the existence of organic wholes is not ruled out
by the First School. It is, on the contrary, one of its constitutive assumptions.
The claim here is only for the component structure of value, which nearly all
members of both schools share. It is also part of the program of the Austrian School
of Art History. Riegl saw the value of a monument composed of the following
constituents (Fig. 3)99:
Organic principles are at work here, as value is not only built on foundation
relations between various types of judgment and aspects of the object that support
them, but any one-sided accentuation of one partial value (say, age-value) over
another means jeopardizing the uniqueness of a monument in our total valuation.100
It is a minimum condition of a Unified Austrian Theory that value has a structure,
rather than being an atomistic judgment. Some seminal members of both schools,
not least among whom Brentano and Menger, went beyond that by also requiring
the composition to be in some sense organic.
3.7 Values are Hierarchically Ordered
The Second Austrian School searched for structure in value. For Brentano, the value
of a presentation as the most basic class of mental phenomena is always positive,
but comes in degrees: some presentations are of higher value than others.101 The
philosophers came up with different theories, from Meinongs ‘‘higher-order
objects’’, which include values, to Scheler’s rank order of values through the
stratification of feelings.
Austrian economists, too, recognized hierarchical structures in valuation. For
Menger, goods that make a direct causal contribution to the satisfaction of needs
were goods of the first order, goods that make a direct and causal contribution to the
production of these were goods of the second order, and so on. Although on the face
of it, the order of goods reflects their position on a time axis, lower-order goods also
See Von Ehrenfels (1897–98, §§41f).
See Von Wieser (1893, p. ix).
See Riegl (1982).
See Svoboda (2011).
See Chisholm (1986a, ch. 6).
Value of a
Commemorative Value
Present-Day Value
Fig. 3 The component structure of the value of a monument
define the purpose of higher-order goods, for the ultimate purpose of economic
activity is the satisfaction of needs. Wieser’s theory of imputation is based on this
idea and thus assumes a hierarchy of goods. The value of a factor of production is
equal to the value of the good dependent on its presence in the production process,
which is finally imputed from the satisfaction a consumption good (i.e., a good of
the first order) provides consumers.102 In Husserl’s language, one may thus say that
goods of order n, xn, are founded upon goods of a lower order, xn-1. However,
hierarchical order for the Austrian economists is merely of a logical and temporal
nature: ‘‘To designate the order of a particular good is to indicate only that this
good, in some particular employment, has a closer or more distant causal
relationship with the satisfaction of a human need. Hence the order of a good is
nothing inherent in the good itself and still less a property of it.’’103 Some
philosophers of the Second School, on the other hand, were more inclined to make
exactly such ontological claims.
Similarly, Riegl abandoned the classification of monuments themselves, instead
identifying values applied to them, where these were almost exclusively based on
visual effects of the monument upon the beholder.104 Economic goods or
monuments, which become such only through an intentional act, then afford
persons the association of value in a non-arbitrary manner.
See Menger (1976, p. 165) and Von Wieser (1893, Book III, Ch. 7).
Menger (1976, p. 58).
See Riegl (1982, p. 24).
3.8 Value Can Be Positive or Negative
Brentano held that the triad of the true, good, and beautiful have each negative
correlates. An experience of love or hate involves an emotional stance toward an
object, and this stance can be positive or negative. Emotions thus stand in a formal
analogy to judgments. An emotion is correct ‘‘when one’s feelings are adequate to
their object—adequate in the sense of being appropriate, suitable, or fitting.’’105 If it
is correct to love an object, it is good; if it is correct to hate it, it is bad. This
argument carries over to all acts of valuation, which can then be either positive or
negative. And this point was accepted universally in the Brentano tradition as
transmitted by Meinong, Ehrenfels, Husserl, and others.106 If one accepts a
definition such as ‘‘x has a negative value = S dislikes/takes displeasure in x’’, most
members of the Brentano School assumed negative values. Obviously injustice is a
negative value if justice is a positive value. Consequently, for Reinach, there were
values and corresponding disvalues. Kolnai asserted positive and negative values
but emphasized that though being correlative they are sometimes not easy to
formulate as polar opposites and may therefore be asymmetrical.107 Interestingly,
Riegl in his account of the value of a monument, and more generally of artistic
objects, also explicitly mentioned that components of that value—use-value and
relative art-value—could be either positive or negative (Fig. 3).
Some models of economic price theory admit of negative prices, as in the case of
disposal costs for noxious products.108 Since price is held to be determined by, or
even to be equivalent with, value, negative value is not an assumption that is alien to
economics. For Wieser, the structure of value was additive, as a residual ‘‘of
satisfaction gained and of dependence lost.’’109 Value thus has positive and negative
components, and the sum may also be negative. This goes beyond the law of
diminishing utility, which for most economists assumes a point of satiation at which
increments of a good produce zero utility. But Wieser saw increasing satiation at
increasing consumption as diminution of surplus value, which he understood as a
‘‘downgrade’’ of value, or as negative value.110
Maybe most importantly, results of consumer research require the assumption of
negative value. Consumers can dislike a particular product feature so much that it
not only has no benefit for them but actually detracts from the benefits created by
other features.111 In some cases, consumers are willing to go to great lengths to
avoid a particular brand.112
Brentano (1969, p. 74).
See Von Meinong (1894, p. 23, 1972, pp. 125, 129) and Von Ehrenfels (1896a, 1897–98, Vol. I, §19).
See Kolnai (1998).
See Debreu (1959, p. 33).
Von Wieser (1893, p. ix); see also Book I, Ch. 10.
Von Wieser (1893, p. 31).
See Simonson et al. (1994) and Luce (1998).
See Wai Lee et al. (2009).
3.9 Values Can Be Measured
Following Menger’s ambiguity on this issue, members of the First School were
divided on the measurability of value. Böhm-Bawerk and Wieser wrote about value
as a measurable magnitude, admitting even cardinal measurement.113 Since
sensations can be measured, valuation that is founded on them has to be equally
measurable. Böhm-Bawerk in particular may have inclined to this position under the
influence of his studies not only of the Brentano School but also of Wilhelm
Wundt’s physiological psychology. Franz Čuhel and Mises, on the contrary, insisted
that acts of valuation can be compared only by degrees of preference and therefore
exclusively at the ordinal level.114 Mises denied the possibility of any unit of
subjective use-value for goods, since judgments of value do not measure anything
but merely establish grades and scales. For him, the unit of valuation was the
objective exchange-value of commodities. This is why prices generated on markets
can be added up whereas values, as mere judgments of preference, cannot.115
However, Austrian economists have remained divided on measurability. If valuation
can be compared by an ordinal ranking and a person feels that he would like to
travel to Paris twice as badly as traveling to Los Angeles, it should not be excluded
on a priori grounds that Paris has twice as high a value for him as a travel
The Second School admitted the measurement not only of instrumental but even
of intrinsic value. However, the method of properly measuring organic unities was
debated. Brentano invoked a ‘‘principle of summation’’ and regarded constituents as
proper parts A, B, and C, that could not artificially inflate the composite value by
admitting for mereo-logical composition such as A ? B, A ? C, or B ? C.116
Following Aristotle, he ascribed actual existence only to complete substances both
mental or physical.117 Meinong went further when, inspired by Weber’s law, he
developed a theory of magnitudes and measurement.118 He even proposed a formula
for measuring value based on the intensity of appreciation of the existence of an
object. Ehrenfels discussed this formula and substituted it by his own, equally at the
cardinal level of measurement.119 He harbored no doubt as to the measurability of
Wirkungswerte (or instrumental values) and to the comparability of values by
See Von Böhm-Bawerk (1886, pp. 69–75, 1959, pp. 196–201) and Von Wieser (1893, Book I, chs. 9
and 11).
Čuhel (1907), Von Mises (1996, p. 204f., 1980, p. 54f).
See Von Mises (1996, p. 335).
Brentano (1969, p. 23n).
See Smith (1994, pp. 76–79).
See Guigon (2005).
See Von Ehrenfels (1896a, b).
See Von Ehrenfels (1897–98, § 29).
3.10 Values are Recognized on the Margin
Members of both Austrian schools recognized that value can best be discovered
in situations of change or through the assumption of their absence. Wieser famously
developed the concept of opportunity cost by which opportunities foregone define
the value of a choice made. The greatest intellectual contribution of the First School
may well have been its elaboration of (one version of) marginal utility theory, and it
became influential for the value theories developed by the Second School.
Ehrenfels held that, while there is a way of speaking according to which we
desire material things, processes, states (e.g., states of mind), and even relationships
and possibilities, our desirings and valuations in fact never relate directly to an
object, but always to its existence or non-existence (or, more generally, to our
owning or losing it, to our being in or lacking control of it, to our consuming or
failing to consume it, and so on), or in other words to a state of affairs
(Sachverhalt).121 Change in valuation is the key to understanding what is valued
highly or not, much as the First School assumed marginal utility to determine value.
Ehrenfels postulated a ‘‘law of marginal advantage’’ (Gesetz des Grenz-frommens)
according to which the magnitude of the instrumental value of objects is
proportional to the marginal advantage attributed to them.122 The term Wertbewegung (‘‘value movement’’) is a central notion in his theory of the dynamics of values
competing for acceptance and survival, Ehrenfels indeed defined his own position as
‘‘dynamic’’ in contrast with Meinong’s allegedly ‘‘static’’ conception of value.123
However, even Meinong in his objectivist phase concurred, as he imported marginal
utility theory.124 And Scheler, who defended an objective theory of intrinsic value
and is often misunderstood as having supported a static Platonism, admitted that
‘‘love and hate are acts in which the value-realm accessible to the feelings of a being
[…] is either extended or narrowed.’’125 Whether inspired by the First Austrian
School or not, the philosophers agreed that the supply of feelings or desire towards
objects, and thus the intensity of the intentional attitude, influences the value
ascribed to these objects. From Brentano to Scheler and beyond, members of the
Second School therefore developed calculi of valuation, by describing laws
applying to the increase and decrease in feeling or desire and its impact on value.
Making the recognition of value on the margin a fundamental principle of a
Unified Austrian Theory does not amount to a one-sided concession to the Austrian
economists. It is supported by the Aristotelian rather than Platonic characteristic of
all Austrian thought on value.
See Von Ehrenfels (1897–98, p. 253f).
Von Ehrenfels (1897, §25, 1998, §19).
Von Ehrenfels (1896a, b).
See Von Meinong (1972, p. 125).
Scheler (1973, p. 261).
4 Conclusion
It seems feasible to develop a Unified Austrian Theory of Value that builds on the
essential assumptions about value shared by both Austrian schools (and supported
by other traditions such as Gestalt Psychology and the Austrian School of Art
History). In order to achieve a shared understanding of value at a high level of
generality, certain assumptions made by some representatives of both schools must
be dropped, but the substance of the two traditions—and certainly their respective
maior et sanior pars—can be maintained. Unification is achieved through ten
propositions that serve as criteria for the development of a Unified Theory, or as a
meta-theory rather than a value theory itself.
On the basis of these propositions, an axiomatic system can now be developed.
Rudiments of such a system have already been suggested.126 It will have to be
domain-independent so as to apply to all phenomena of valuation. This system can
then be confronted with a host of empirical data about valuation in various domains
such as moral decisions, consumer behavior, aesthetic choice, or culinary
It was an essential assumption of Austrian culture at the fin-de-siècle, much
before the positivism of the Vienna Circle, that science is a single cognitive
enterprise. Menger did not believe there to be any qualitative difference between
natural and social sciences, as all sciences attempt to grasp the essence of things and
to find ‘‘exact’’ laws. He thereby opposed the neo-Kantian dichotomy between
nomothetic and ideographic sciences, or those that enable true explanation versus
mere Verstehen, that later economists such as Mises would advocate. But he found
himself in full agreement with Brentano, for whom philosophy itself was a rigorous
scientific enterprise.
Elaboration of a Unified Theory of Value not only answers to the old quest of a
general account of valuation. By advancing the unity of science on a realistic
foundation in accord with knowledge gained in the various disciplines, it makes a
significant contribution to the development of human culture.
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