How Austrian Economists Crushed Marxism The Austrian School didn’t just critique Marx — they dismantled his entire economic worldview. Let’s break it down: 1. Ludwig von Mises: Central Planning Doesn’t Work Mises identified socialism’s fatal flaw: without market prices, planners can’t make rational decisions. No Prices, No Planning Without private property, there are no prices. And without prices, there’s no way to calculate profit or loss. Central planning becomes guesswork. Chaos is Inevitable With no price signals, shortages and waste become the norm. That’s why socialist economies collapse. 2. F.A. Hayek: Knowledge is Local Hayek argued that economic knowledge is decentralized — no bureaucrat can ever gather it all. Markets as Information Networks Prices convey local knowledge better than any planner. The market is a giant communication tool — fast, flexible, and spontaneous. 3. Carl Menger: Value is Subjective Menger destroyed Marx’s “labor theory of value.” People Decide What’s Valuable A product’s value isn’t how much labor it took — it’s how much someone is willing to pay. More Isn’t Always Better Menger introduced diminishing marginal utility: the more you have, the less each unit is worth. Another blow to Marx’s ideas. 4. Eugen Böhm-Bawerk: Wages Aren’t Exploitation Marx claimed capitalists exploit workers. Böhm-Bawerk showed that wages reflect time preference — people value money now over later. Wages Are a Trade, Not Theft Workers get paid upfront. Capitalists take the risk and wait. That’s not exploitation — it’s fair exchange. The Result? Marxist theory couldn’t survive Austrian logic. No prices, no planning. No labor-value, no exploitation theory. Marx wrote manifestos. Austrians built arguments. And they won.