Friedrich von Wiesers´s theory of socialism: A magnificent failure

This paper examines Friedrich von Wieser's theory of the socialist or communist planned economy. It identifies in Wieser's Law of Power (1926) the abiding interests that stimulated his attempt to use Carl Menger's theory of subjective value to present a theory of socialism, first in Natural Value (1889) and later in Social Economics (1914). It discusses his conception of a unit of marginal utility, or "natural value," as the basic unit of economic calculation in his imputation theory and his use of that building block in his consequent theory of production and distribution in a socialist economy. Lastly, it argues that Wieser's theory attempts to socially objectify subjective values and is actually a return to a pre-Mengerian supply-side, real cost approach to the theory of value. Wieser's theory of economic calculation under socialism thus represents a failure to understand the radical contribution of Menger's value theory to the theory of exchange.