Friederich von Wieser

Friederich von Wieser – value when knowledge is common Wieser’s work (1893, 1914) is characterized by a thorough investigation of the concept of subjective value – expressed as utility. To Wieser we owe a thorough examination of the concepts of marginal utility and opportunity cost, now standard terms in economic theory. We owe to him also the first formal attempt to determine the value of productive inputs on the basis of the value of the outputs they produce – the so-called imputation problem. Wieser’s solution to the imputation problem depends, however, on the assumption that the proportions in which inputs are combined to produce any output are fixed by technology.5 This fixed-proportion assumption effectively empties the concept of value of its subjective character; it shifts attention away from valuation as the attaining of a subjective state of mind, and places it on the objective physical facts of production. The cost (value) of any input is thus given by the value of the output lost in employing it in its most valuable alternative production opportunity. And this is a matter of common knowledge, given that inputs are always combined in fixed, known proportions to produce outputs of known quantities and qualities. True, the value of those outputs has to be determined by the consumer in the marketplace, but this is not Wieser’s focus. Dropping the fixed-proportion assumption would reveal the essentially subjective nature of the production decision. In a world in which input-proportions vary in a non-deterministic manner, the output foregone by choosing one production method over another is not a matter of common knowledge, nor is its value (of which there may be non-pecuniary components). In this context, the subjectivism of value implies subjective appraisal and interpretation and differences in individual expectations, matters not explored by Weiser