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
This would be the movement of value if value were simply positive:
beyond a certain point, additions to the stock would _add_ no value,
but they would not cause any _loss_ of value, and the highest point
would come last in the series. But there is another, and a negative
element in value.
It arises from the indifference which we naturally feel towards goods.
To man only the human is really important: by nature his thought, his
sympathy is for himself; for _things_ he only cares, in the first
instance, as he finds in them any relation to human interests. This
interest may take the form of sympathy with pain or pleasure in the
animal world; or that of religious and poetic feeling suggesting the
unity of all life; or, lastly, that of economic valuation finding in
things the auxiliaries and conditions of human wellbeing. This natural
indifference is so great that it requires a peculiar compulsion before
we look at anything outside us as having importance or value. Simple
utility is not enough: if useful things are present in superfluity,
we think no more of them than we do of the sand on the sea shore. It
is only when our wellbeing is not assured that an interest awakens in
the things on which it is seen to depend, and that we exert ourselves
to acquire these things. The overcoming of this natural resistance,
then, is something with which we have to reckon. The greater our need,
the less the resistance: in cases of extreme need, it disappears
altogether, and we identify our fate with the fate of the goods which
“are life or death to us.” The resistance is at its height when we
have everything in excess, and feel no thanks due to goods which
cannot help ministering to our enjoyment—for there is no reason why we
should value additional goods unless they give us additional wellbeing.
Between these two extremes, the interest we transfer to goods is
proportioned to the interest we take in what they do for us. But we
do not attach to them the whole of the interest they really have for
us: we do not require to do so, for goods of a stock are not estimated
according to their actual importance, but according to the marginal
utility they afford. All utility over the marginal utility is kept
back from the value of the goods, and this gives us the figures for
the strength of the resistance: the negative element is equal to the
surplus value deducted. Thus, when the stock consists of two goods,
the actual gratification is 10 + 9 = 19, while the calculation of the
value is 9 × 2 = 18, leaving a surplus of 1: when the stock consists of
4 the actual gratification is 10 + 9 + 8 + 7 = 34, but the value is 7
× 4 = 28, leaving a surplus of 6, and so on. Putting these two scales
together we have the following—
1 2 3 4 5 6 7 8 9 10 11
-------------------------------------------------------
Positive (+) 10 19 27 34 40 45 49 52 54 55 55
Public-domain text, read in full here on John Shaqi.
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