Brad, the problem I have with trying to find sources concerns the   
question itself. Perhaps there are some people who hold the view you   
describe, but they have not been on my list of people to consult for   
information about the shift to neoclassical economics.  
  
First, I do not think that economists -- or should I say the best   
economists -- ever held a strict labor theory of value. The theory of   
value in classical economics was contradictory or, more charitably,   
multi-faceted. No one in their right mind could deny the contribution of   
enterprise, or entrepreneurship, to the value of the product. Nor could   
one deny the contribution of what we today call human capital. Given   
this, the only way that one could consistently hold a labor theory of   
value was to maintain that production activity by human beings is the   
source of all value. But to maintain this, one would have had to define   
labor so broadly that it would have no applications to policy. Besides   
this, there was always the problem of explaining the value of things   
exchanged in markets that either had not been produced (items acquired   
through luck or chance) or that had been produced so long ago (e.g.   
works of art old gold, old diamonds, and old water) that the connection   
between the labor that caused them to be produced and their current   
market value could not be established to a rational mind.  
  
Second, I wonder about the legitimacy of linking the labor theory to a   
production theory. The perplexing question to a modern economist is how   
some of the great minds in HOT could have held a production theory. (One   
must assume that to the modern mind, the labor theory was an   
aberration.) The answer, I believe, lies with the beliefs of economists   
about who they were serving. They did not conceive of themselves as   
serving the interest of the "common man" which, in neoclassical   
economics, means the consumer. Many searched with futility for a natural   
law, or set of laws, to explain value.  
  
Third, and in conjunction with the second point, the consumption theory   
of value developed as a counter to the production theory. It is no   
coincidence, I suspect, that this development corresponded to the   
expansion of democracy and the gradual demise of rule by kings. The   
question arose: "In whose interest should economic policy be made?" And   
"whose interest is served by capitalism?" The producers, whoever they   
are taken to be, or the consumers?  
  
Practically all of the major founders of the subjective theory of value   
mentioned their efforts to combat socialism and/or Marxism, which in the   
mind of the populace was based on the labor theory of value. It was only   
long after the introduction of the subjective theory of value that some   
economists began to think of the possibility that, by causing the goods   
that consumers want to be produced, socialism might serve the interests   
of the "consumer" (Oscar Lange). Walras, Menger and Clark were concerned   
with socialism and, as I recall but am not certain, so was Jevons. Each   
of these independently invented models of an economic system in which   
consumer utility is the source of all value.  
  
Was subjective value (or marginal utility) theory a shift from the labor   
theory? Only, it seems to me, if we put all of the classical economists   
in the socialist or Marxist camp. Who subscribes to this view?  
  
With respect,  
  
Pat Gunning