Revisiting the Böhm-Bawerk–Edgeworth Controversy: Early Neoclassical Economists and Labour Exchange

Abstract

ABSTRACTThis article revisits the controversy between Böhm-Bawerk and Edgeworth. The crux of this debate revolving around value and cost lay in their views on labour exchange. Böhm-Bawerk and Edgeworth did not disagree on the basic principles underlying the causality between labour exchange and value-cost. Böhm-Bawerk stressed a decisive influence of social power relationships on labour time and Edgeworth apparently agreed. Böhm-Bawerk’s and Edgeworth’s observations on actual industrial relations and their theoretical arguments informing the controversy had variances. Such observation–theory discrepancies also appeared in their other work and were shared by other early neoclassical economists. Their efforts, with this contradiction, contributed to the moulding of a principle that de-individuates labour exchange. At the root of this process lay the fact that, despite their subjectivist approach, they failed to comprehend the distinctiveness of capitalistic labour exchange arising from worker subjectivity towards labour performance and employer countermeasures. The Böhm-Bawerk–Edgeworth controversy typically illustrates this crucial moment for the establishment of the neoclassical paradigm.