Problems with the Cost Theory of Value

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Problems with the Cost Theory of Value

One of the most important developments in the history of economic thought was the so-called Marginal Revolution of the early 1870s, in which the older cost (and more specifically, labor) theory of value was overturned by subjective value theory. This was an unambiguous advance in the science of economics, analogous to the superiority of Einsteinian relativity over Newtonian mechanics. The revolution is of special importance for Austrian economists, since Carl Menger