The Austrian School of Economics, founded by Carl Menger at the end of the 19th century, opposed Karl Marx's theories from the start.

Austrian economists reject the Marxist notion of class struggle, which posits that the conflict between the capitalist class and the working class is inevitable and serves as the engine of social change.

The Austrians argue that society is not divided into two antagonistic classes, but rather composed of individuals with diverse interests and needs. They emphasize that economic relations between individuals are generally mutually beneficial, and not based on exploitation.

For example, an employer hires a worker because they need their skills to produce a good or service that consumers desire. The worker, in turn, accepts the job because he needs an income to meet his needs. This relationship is mutually beneficial and not conflictual. Ludwig von Mises highlights that Marx failed to distinguish between what pertains to bourgeois ideology in human rights and what they mean in practice, the upheavals they entail in social life. Many critical thinkers of human rights have made the same mistake. This was also the case for counter-revolutionaries, such as Joseph de Maistre or Louis de Bonald.

In The Ethics of Liberty and Anatomy of the State, Murray Rothbard explained that exploitation only makes sense as an aggression against private property and that only the State obtains its revenues through aggression, that is, through taxation, debt, printing money, and thus through inflation. In reality, it is state intervention, and not class struggle, that is the source of violence and conflicts in society. The State, by appropriating resources and regulating the economy, creates distortions and injustices that lead to conflicts and repression. Ending exploitation thus requires reducing the powers of the predatory caste: the State.

On this point, see also: Marxist and Austrian Class Analysis, Hans Hermann Hoppe, Journal of Libertarian Studies, Vol IX No. 2, Fall 1990. Translation by François Guillaumat. Included as Chapter 4 of The Economics and Ethics of Private Property (Boston: Kluwer Academic Publishers, 1993).

The concept of class struggle can also lead to the idea that anything is permissible. Marx argued that notions of good, evil, justice, right, and truth were relative to classes. Human reason, he claimed, is congenitally incapable of finding the truth. The logical structure of the mind differs according to social classes. There is no universally valid logic.

Mises coined the term "polylogism" to explain this sophism. "Poly" means many, and "logism" refers to rational discourse and logic. According to Marx, there would be several incompatible logics, that of the proletarians and that of the bourgeoisie.

Yet until the mid-19th century, no one dared to contest the fact that the logical structure of the mind was identical and common to all human beings. All human relations are based on the assumption of a uniform logical structure. People can engage in discussion because they can appeal to something common to all, namely, the logical structure of reason.

Mises writes: Marx and the Marxists (...) have taught that thought is determined by the class situation of the thinker. What thought produces is not truth, but ideologies. In the context of Marxist philosophy, this term refers to a disguise of the selfish interests of the class to which the thinking individual belongs. That is why it is pointless to discuss anything with people from another social class. Ideologies do not need to be refuted by deductive reasoning; they must be unmasked by denouncing the class situation and the social background of their authors. Thus, Marxists do not discuss the merits of physical theories; they reveal the bourgeois origin of the physicists. (The Omnipotent Government).

In the eyes of the Marxists, Ricardo, Freud, Bergson, and Einstein are mistaken because they are bourgeois. Thus, Marxists claim that the logical structure of the mind would be different depending on class membership. Each class would have its logic and therefore its economy, mathematics, physics, and so on. The only logic and the only exact, correct, and eternal science would be that of the Marxists.

That is why Georges Sorel, the importer of Marxism into France, would say that violence is beneficial, provided it is "proletarian". Not surprisingly, the same reasoning is also found in the writings of Lenin and Trotsky. Since classical morality and law are inventions of the ruling class, everything is permitted.

The Austrians argue that Marx's labor theory of value, which posits that the value of a commodity is determined by the amount of labor required for its production, is flawed. They argue that value is subjective and determined by consumer preferences, not by production costs.

Eugen von Böhm-Bawerk, one of the early Austrian economists, criticized Marx's labor theory of value in his work Wert, Kapital und Zins (1886). Böhm-Bawerk argued that Marx's theory was based on a fundamental error, namely that all units of labor are identical. In reality, he argued, some labor is more arduous or more productive than others, and this is what determines the value of a commodity. Regarding the theory of profit, Marx argued that profit is a form of theft. It is the concept of exploitation, according to which capitalists extract an unfair surplus value from the labor of workers. The Austrians refute this idea by arguing that wages are determined by the value that workers bring to companies, and that profits are the reward for entrepreneurs who take risks and invest efficiently. Profit is thus a reward for the entrepreneur who takes risks and invests in new products and processes. Friedrich Hayek developed a theory of profit based on the concept of uncertainty, which is notably rooted in the work of Jean-Baptiste Say. According to Hayek, entrepreneurs earn a profit because they can better predict the future needs of consumers than other economic actors.

Marxists believe that socialism, an economic system in which the means of production are owned and controlled by the workers, is inevitably superior to capitalism. The Austrians, on the other hand, assert that socialism is impossible to achieve in practice, as it would require an unrealistic degree of central planning.

As early as 1922, in his book Socialism, Ludwig von Mises demonstrated that socialism would lead to widespread shortages, as central planners would not be able to make accurate economic calculations without the price system provided by the market.