An Austrian Paradox: The Contribution of the Austrian School to the Development of Marx’s Labour Theory of Value

Abstract

Ever since the origin of the Austrian School in the latter part of the nineteenth century, a paradox has existed in its relation to Marx’s economic theory.1 Ironically, even though the school led an irreconcilable ideological fight against Marx’s economic theory and particularly against his labour theory of value, its adherents unknowingly advanced research on its central category, that is, ‘socially necessary labour’. In this article, it is posited that the scientific interrelation between these schools is based on how they reveal the structure of the process of forming socially necessary labour. This argument contrasts with numerous prior attempts, over more than a century, to understand the relations between these two antagonistic schools of thought (Mill 1848; Marshall 1890; Frunk 1900; Dmitriev 1904 [1974]; Tugan-Baranovskii 1909). To make the Austrian paradox clear, we start off by examining the evolution of the category of socially necessary labour, as well as its content. Classical bourgeois political economists who preceded Marx made some important steps forward in initiating research into this problem. However, they were unable to develop a category of socially necessary labour and to reveal a process for its formation.To the Advanced Austrian School