The Problem of the Method

This chapter explores the methodological foundations of Oskar Lange’s economic thought, which was influenced by the distinctive intellectual climate of interwar Poland. Here, the scientific philosophy of the Lviv-Warsaw School intersected with Marxist theory. Lange’s work synthesises Marxist political economy with marginalist analysis, challenging traditional interpretations of both schools of thought. The chapter outlines Lange’s methodological evolution from the 1930s to the 1940s, emphasising key texts such as “Marxian Economics and Modern Economic Theory” (1935) and his critique of Sweezy’s “The Theory of Capitalist Development” (1943). Lange contends that while Marx’s framework is effective for analysing capitalist dynamics and institutional evolution, marginalist tools are essential for addressing microeconomic issues like optimal resource allocation. He dismisses the labour theory of value as analytically outdated and advocates for a neoclassical approach to pricing, while still upholding Marx’s sociological critique of exploitation. This dual methodology—merging historical-institutional analysis with formal economic modelling—reflects Lange’s broader epistemological perspective: economics must integrate methods from both the social and natural sciences. However, his approach remains abstract and leaves certain tensions unresolved, particularly in reconciling value theory with the concept of exploitation.