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Pastimes : Austrian Economics, a lens on everyday reality
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To: Don Lloyd who wrote (130)4/3/2003 3:36:15 AM
From: Wildstar  Read Replies (1) of 445
 
Don,

I don't mean to continue harping on a previously discussed topic, but I keep coming back to interpersonal comparisons of subjective value, as discussed in this post that I am replying to.

You state that subjective demand can be compared between individuals.

In the article linked, the author states more clearly what I was trying to state when I started that series of posts.

As for the first, a pillar of Austrian economics is "radical subjectivism." This is the idea that people's preferences are determined within their individual contexts. Value is subjective in the sense of its being an internal state that is immeasurable and not amenable to comparison (in the way that people's heights can be compared). It is inconsistent with this insight to say that A values resource X more highly than B does because he is willing to pay more for it. In reality, all that can be said is that resources will flow to those who are willing to pay the most money.

To go beyond this is to believe that value can be compared among persons and that money can be used for such comparisons. It is often assumed that all people value money equally, permitting money to be used as a stable measuring rod for everyone. In the example above, it would imply that the marginal utility of a dollar (the value placed on the last or next dollar obtained) is the same for both A and B. So if A bids two dollars and B bids one dollar, we can say A values resource X more than B. It's not that the statement is wrong, or that the marginal utility of a dollar is not equal for A and B, but that all such conclusions are meaningless: they compare the incomparable.

libertyhaven.com

Any thoughts?

Wildstar
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