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
A more common form is where the group can afford one utility, and the
individual members of it in isolation can afford another but a less
utility. Thus the utility of a well-matched pair of roans will be
valued at a figure much higher than would be realised by selling the
horses separately. Suppose that the utility of the pair is represented
by 100, and that of A roan and B roan separately by 50 and 40: what
is the value of A? To calculate it from the side of the owner: if he
has A and B, he has a value of 100; if he lose A, he has only B, and B
separately has a value of only 40. What he has lost is the difference
between 40 and 100. Or, from the side of the buyer: if he gets B he
obtains 40; if he gets A in addition he obtains 100; the value of A,
as before, is the difference between 40 and 100. Here, then, A has a
different value as complement and as isolated good: in the one case it
is worth 60, in the other 50. If we take the case of a well-matched
four-in-hand team, we have a more complicated instance of the same; the
whole team makes the most highly valued group, but each pair within
that again has a higher group value than the sum of the isolated values
which would be attached to each single horse. This case of valuation
holds in the very numerous cases where goods are in sets: if we “break
the set,” the separate members have a less value than they had as
complements.
A third case is, where, as before, the group can afford one utility,
and the individual members of it separately can afford a less utility,
but where some members are replaceable and some are not. In this case,
the replaceable members can never obtain any other than the one value:
however indispensable they may be to the making of the group, goods
that can be easily replaced cannot rise higher than the competition
of all other uses allows. Although a load of bricks, for example,
were absolutely indispensable to finish the building of a house, the
load could never obtain any higher value than that determined by the
marginal utility of bricks generally: that is, as determined by all the
uses to which bricks generally are put. To the irreplaceable member,
on the other hand, falls the remainder of the value of the group. Thus
suppose a group A, B, and C, with a group value of 100, and isolated
values of 10, 20, 30. If A and B are articles of large manufacture and
great demand, while C is a monopoly good, A and B will get 30% of the
value, and C the other 70%, although, if the other members were not
present in the group, the only value C could realise would be 30.[13]
Public-domain text, read in full here on John Shaqi.
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