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
=Illustration.=—Take the wheat crop in France in 1817, 1818, 1819.
The harvest was successively 48, 53, and 64 millions of hectolitres
(and presumably the Total Utility increased), while the Total Value
was successively 2,046,000,000, 1,442,000,000, and 1,117,000,000
francs. This should remind us that the effort of the industrial world,
as distinguished from that of the individual, is always towards the
increase of Utility, not necessarily of Value. The total disappearance
of Value, however, is almost never seen, because, at the worst,
articles however useless subjectively, have always the use of exchange.
=The Course of Total Value.=—As a rule, Total Value increases with
Total Utility, though not in the same proportion: the reason being that
there are very few things of which the community, as distinguished from
the individual, ever has more than enough to satisfy its most urgent
wants. As goods increase, the dependence of the richer classes on them
indeed diminishes, but they then come within reach of poorer people,
whose want has hitherto been entirely unsatisfied. Thus an abundant
crop, although the Final Utility may be low, is _generally_ of much
greater Total Value than a short one.
=Marginal Utility.=—As there are many closely related wants, and as
the satiation of one would prevent the emergence of others, it is
seldom that we completely satisfy any single want. As one want is
being satisfied, it diminishes in urgency till there comes a point
when another want, not originally so urgent, becomes more urgent; and
having satisfied one want partially, we pass on to the satisfaction
of another, and so on successively from want to want, describing a
marginal line in the satisfaction of each. This is generally—though
perhaps doubtfully—described by saying that, on this line, the marginal
utilities are equal. For this reason we replace the expression Final
or Least Utility—which is apt to suggest satiation or zero—by the
expression, Marginal Utility—the margin at which we stop in the
circumstances.
Public-domain text, read in full here on John Shaqi.
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