This is the decisive break with cost theories of value. Costs matter because they are themselves valuable alternatives, but the ultimate explanation runs from wants to goods, not from goods to wants.

Menger establishes the subjective theory of value in its clean form. Value is ordinal importance within action. It cannot be measured as a physical quantity; it is expressed in choice.

The subjectivism here is methodological, not psychological ornament. Economic order must be explained from individual valuations dispersed across many minds.

This is the marginal utility principle. It explains why abundant necessities can have low exchange value and scarce luxuries can have high exchange value without denying the importance of human needs.

The unit's value is determined by the marginal employment. Action always allocates interchangeable units to ranked ends; loss reveals the marginal end that must be abandoned.

This insight makes price theory possible without assuming objective value. Market prices later coordinate many marginal valuations, but each valuation begins in a plan.

This is the foundation of imputation theory. Capital goods receive value from their contribution to future consumption goods, and the timing of that contribution becomes central to capital and interest.

Mises later uses this point in economic calculation. Prices of higher-order goods depend on entrepreneurs appraising future consumer demand and bidding for productive factors.

The backward imputation of value reveals why production is a coordination problem across time. Knowledge of future uses is partial and contestable.

The map leads directly to marginal utility and capital valuation.

It also leads to the theory of choice: value is shown only in action among alternatives.

And it leads to market-process theory: prices emerge from many such rankings and revisions.