Sunday, March 23, 2014

Sandwichman — The Poverty of Marginal Utility

If labour does not possess a "real and fixed value," how is it that one can conclude that introducing labour-saving machinery will diminish the value of the commodities produced? My explanation for this uncanny convergence is no doubt too "simple" and too "obvious" to be believed. A proper exposition would lead the reader on a suspenseful and convoluted excursion to interrogate all the historical opinions, detours, evasions and possible objections.
But why bother? It is this simple: marginal utility theory of value is an embodied-labour theory of value in disguise. The disguise consists of not stating the obvious assumption and getting away with it because the assumption is so obvious as to be taken for granted.
The assumption is that the two parties to an exchange have a legitimate right to conduct that transaction....
Enter John Locke.

EconoSpeak
Sandwichman

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