How is it outside the purview of economics?
Yeah, I’d like to know, too. My interpretation is just a charitable work of mercy. I have no idea how this is supposed to contradict the LDMU.
I’m not saying it contradicts anything. I’m saying marginal utility doesn’t apply, not that it’s inverted or overturned.
If there is no stock of interchangeable goods to be supplied and demanded, then sure, the LDMU does not “apply.” But I suggested that your friend locate a state of affairs, in which the law fails to hold, that is, is false or is invalid. I mean, when discussing economics, the propositions that hammer and nails are often used together or that cats and dogs rarely get along do not “apply” either. They ain’t consequently false.
“Economic laws are universal” does not mean “economic laws are relevant to everything under the sun” or “all people should discuss nothing else but economics every waking hour of their lives.”
Exactly. And the fact that a logical consequence of a socially constrcuted system holds within that system does nothing to say its not socially constructed.
Do you still believe that your scenario is outside the purview of economics?
But anyway, medicine for the treatment of a chronic illness. The marginal utility of that good doesn’t diminish as one continues to consume it.
(unless I misunderstand the law, which is quite possible)
I don’t know, Aristippus, why don’t you tell me?
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The scenario concerning medicine for chronic illness seems to make use of intertemporal comparisons of value scales.
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Did your previous scenario contain economising (i.e. action towards valued goals using scarce means)? It certainly looks like it.
“Socially constructed” seems to mean “agreed to by various members of society.” But economic laws would be valid, even if nobody knew about them or if people (mistakenly) agreed that their opposites, in fact, held. As far as economics, there is something to discover in human nature not to create or construct according to one’s own fancy.
“Universal” is that which applies to many, such as: many people, many goods, many time periods.
The LDMU applies at a moment in time. The goods, say, horses, are at any moment allocated to uses from most to least important. If at t1, a horse were to be sacrificed, then its least valued use at t1 would be sacrificed. If another horse were to be added, then it would be put to a still less important use.
That consumption of a drug at t1 is less important (in some sense) than consumption of another dose of the same drug at another time t2 > t1 does no damage to the LDMU.
You’re going to have to do some explaining because I’m not as brushed up on these theories as you are.
““Socially constructed” seems to mean “agreed to by various members of society.” But economic laws would be valid, even if nobody knew about them or if people (mistakenly) agreed that their opposites, in fact, held.”
Yes, they would be logically valid within themselves. See the Long quote above. Whether or not they have a bearing on reality is another thing entirely.
““Universal” is that which applies to many, such as: many people, many goods, many time periods.”
I thought universal meant it applies to all. Not all scenarios, but all similar cases within certain limitations.
“That consumption of a drug at t1 is less important than consumption of another dose of the same drug at another time t2 > t1 does no damage to the LDMU.”
I don’t understand. I’m familiar with the common buffet example for LDMU. Each plate of food loses utility as you continue to quench your hunger. In the case of medicine for a chronic illness it actually is “all you can eat” until you die (hopefully from causes other than the illness).
The law of diminishing marginal utility has nothing to do with the saturation or satiation of wants at all. It is a purely logical construction. Please read Mises, Human Action pp. 119-127. It must be noted, however, that Jevons and Walras were influenced by Gossen at different points in their careers. Menger’s formulation of the law (among other things) is superior to theirs.
Heads up, I’m at page 123 and still not getting it.
I just don’t think it holds up. The utility of medication for continuous treatment never diminishes. It’s just not the way medicine works. Even a half-dose has an effect.
I admit that that passage can be confusing, but he refers to the difference between the law of diminishing marginal utility and Gossen’s laws so I thought I’d point you to it. I’ll explain LDMU very simply:
Suppose your value scale for the uses of a unit of e.g. a loaf of bread between equally servicable units at a moment in time were as follows (with ‘1’ being the most valued use):
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Give unit to Tom
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Give unit to Jim
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Eat unit
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Give unit to Bill
etc.
Now if you only have one unit you will give the unit to Tom and all the other uses must be foregone. If you had an additional unit you would give one unit to Tom and one unit to Jim. Logically (following from the action axiom if you can accept that) the use of the unit which you gave to Jim provides less utility than the use of the unit which you gave to Tom, otherwise you would have used the first unit to give it to Jim and not to Tom.
EDIT:
‘The utility of medication for continuous treatment never diminishes.’
You are making intertemporal comparisons of utility. LDMU is referring to utility at one moment in time.
I don’t understand why the units are ranked, and even if I must rank them, I’m not sure how it’s according to utility. Plus, even if that example is correct, the chart for medication would look like this:
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take it myself
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take it myself
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take it myself
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take it myself
Edit: there’s a lot I just don’t get. Sure, if I rank the units, and if I rank them according to utility, then it holds. But I’m not sure I do either of those two things with my stuff.
Are value scales foreign to you? If so, LDMU is probably the wrong place to start with Austrian theory, of which value scales are an integral part.
I understand value scales. What I’m saying is that there is nothing to suggest that at all times people’s actions can be accounted for by them nor that people necessarily rank thier options according to utility.
Value scales are used to interpret action. They are accounted for by action, not vice versa.
And that I act on something before acting on another option shows that I have ranked the two according to utility how?