An introduction to the theory of value : $b On the lines of Menger, Weiser, and Böhm-BawerkSmart, William
General
An introduction to the theory of value : $b On the lines of Menger, Weiser, and Böhm-Bawerk
Smart, William
Austrian school of economics; Value
The class of Complementary goods, to use Menger’s term, is much
wider than we are apt to suppose. In consumption goods, it tends to
increase with the variety of modern wealth and the development of new
tastes. Many of our enjoyments depend on the co-operation of a great
many factors, of which usually one is prominent, and the others only
assert themselves on rare occasions. Thus the part played by that
insignificant commodity, salt, in most of the pleasures of the table,
is never appreciated till the want of it—say, at a pic-nic—suggests how
indispensable a complement it is. Among productive goods, again, where
the division of labour is constantly adding to the number of factors
which work together in the making of any good, the complementary
character becomes even more apparent. The first thing to be noticed
here is that the value of a group, _as a group_, is determined by the
marginal utility of the group, not of the separate members. But, as
each group may on occasion be broken up, the interesting question is as
to the distribution of value among the members, the difference in value
between goods as complements and goods as isolated articles.
The simplest case is where the single members of a group are all
useless in any other form but that of the group, and are at the same
time economically irreplaceable. In valuing boots, for instance, the
“good” is the pair; if I lose one, I lose the entire utility. In such
cases—which are, of course, comparatively rare—if I have had the pair
and lose one, I lose the entire value of the pair: if I have one and
obtain another, I gain the entire value of the pair. Here, then, the
value of one single member of the group is the same as the value of the
whole group.
This case, however, is really of importance only as introducing the
others which follow; under the assumed conditions we are dealing with
a good similar, say, to a pair of compasses or a pair of spectacles,
which we can divide into two only at the cost of the whole; that is to
say, it is only externally a group.
Public-domain text, read in full here on John Shaqi.
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