Footsteps of Austrian Thought on Labour

This article traces the footsteps of Austrian thought on labour.Carl Menger, the founder of the Austrian school,advocated the supremacy of consumer demand and the value causality running from goods of lower order to those of higher order and the role of marginal utility of goods of first order as the final determinant of value.Menger argued that the value of labour and wages, as well as the value of other productive services and their prices, are subject to these principles.He thus de-individualised labour.While inheriting and developing theories established by Menger,Eugen von Böhm-Bawerk and Friedrich von Wieser attached importance to social power relationships and appreciated the role of labour movements.In particular,Wiese’s observations on capitalistic labour resembled those of Karl Marx.Ludwig Edler von Mises and Friedrich August von Hayek extensively switched the current of thought led by Böhm-Bawerk and Wieser.Mises and Hayek denied the distinctiveness of the labour market and,on the basis of their faith in the self-regulating market function, negated the effect of social powers and bitterly attacked trade unions.Early Austrian economists did not present a theory of labour supply in a specific manner.Joseph Alois Schumpeter maintained that labour disutility as real cost should be replaced by the utility of leisure.Schumpeter applied the Austrian notion of opportunity cost to labour supply.In this way, the Austrian thought on labour saw noteworthy vicissitudes,especially the large disparity in perspectives between early and later Austrians.