The Development and Application of the Disutility of Labor in Marginalist Theory

Within the Austrian school, labor economics is among the topics least emphasized, so that crucial concepts such as the disutility of labor and opportunity cost are divorced from their original contexts. This article examines the origins and evolution of the disutility of labor postulate and analyzes how this concept affected the thinking of major Austrian theorists such as Ludwig von Mises. We trace the subject back to William Stanley Jevons, David Ricardo, David I. Green, and Philip Wicksteed and find that the assumption of the disutility of labor went from being grounded in real cost terms to opportunity cost terms. Notably, we offer a novel finding in illustrating Mises’s changing thoughts on the matter as they developed from a theory similar to that of Jevons into one similar to that of Wicksteed and Green. Finally, an examination of the real cost and opportunity cost doctrines finds that both are at odds with the core principles of Mengerian marginal analysis, challenging the typical manner in which the disutility of labor is treated by Austrian economists.