History and criticism of the labor theory of value in English political economyWhitaker, Albert C. (Albert Conser)
History
History and criticism of the labor theory of value in English political economy
Whitaker, Albert C. (Albert Conser)
Economics -- Great Britain -- History; Labor theory of value -- Great Britain -- History
“Where the only natural agents employed are those which are
universally accessible, and therefore are practically unlimited
in supply, the utility of the produce, or in other words, its
power of producing gratification, or preventing pain, must be
in proportion to the sacrifices made to produce it, unless the
producer has misapplied his exertions: _Since_ no man would
willingly employ a given amount of labor or abstinence in
producing one commodity, if he could obtain more gratification
by devoting them to the production of another.”[142]
This passage, whether consciously or unconsciously, is a proposition
about a primitive or a Robinson Crusoe economy. It affirms that the
utility of products will be _in proportion to_ their total disutility
costs of production, but it does not affirm that production will be
carried on until the utility per unit of the increasing number of
products will be reduced until it is _equal to_ the disutility cost of a
unit. Except for the failure to make this latter observation, Senior’s
formula looks like an anticipation of later theories of value. This
appearance is carried out by the use of the word “utility” for value.
The word as here used was probably taken directly from Say; it cannot
be Adam Smith’s “_value in use_.” For if Crusoe produced at equal cost,
measured in disutility, a small article of luxury and a great quantity
of necessaries, and estimated the two at the same value—and this
would be normal—the Smithian values in use distinctly would not be in
proportion to sacrifice costs. The great quantity of necessaries would
have a great “_value in use_,” as contrasted with the small article of
luxury, for which Crusoe nevertheless was willing to expend quite as
much labor. “Marginal” or “final” utility would fit the requirements of
this formula, but there is nowhere in the book the slightest evidence
that Senior utilizes the marginal method. In fact, on the same page
with this proposition is a paragraph which shows that he considers the
value of things not capable of increase in supply—the “rare productions
of nature and art”—to be subject to no general rule, because dependent
merely on the wealth and taste of the community.[143] That is to say,
unless there is some ascertainable rule governing the conditions of the
supply of goods, there is no rule of their value. But the utility theory
is a whole explanation of value lying precisely in this region of no
rules.[144]
Public-domain text, read in full here on John Shaqi.
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