Böhm-Bawerk Rejects the Marshallian View of Determining the Supply Side by “Objective” Considerations of Given and Known Production Costs

Böhm-Bawerk reproached Marshall for blocking, in the English-speaking world, the clear reception of the subjectivist revolution that Menger had started and, specifically, for attempting to rehabilitate Ricardo’s old objectivism, at least on the supply side, in using supply and demand functions to explain price determination. Indeed Marshall used the metaphor of the famous scissors with two blades (supply and demand) that jointly set (equilibrium) prices in the market. While Marshall accepted that demand is basically determined by subjective considerations of utility, he believed that the supply side was mainly determined by “objective” considerations involving the historical (that is, “given” and known) cost of production.

--Jesús Huerta de Soto, The Austrian School: Market Order and Entrepreneurial Creativity (Cheltenham, UK: Edward Elgar, 2008), 53.