According to Austrians 2 goods are 2 units of the same good if from the actor’s perspective they are equally serviceable at achieving his ends. I very much sympathise with this definition, but I have a query.
Which ends are important? Are they the most valued end which the actor gains in the trad/ the opportunity cost(the most valued end forsaken in the action/exchange when the good is being given up), or are we referring to equivalency from the perspective of the actor toward acheiving all of the conceivable ends he deems the objects suitable for?
It may be better to illustrate with an example. Suppose I have a glass of coke and a glass of carbonated water. My most highly valued end is to conduct a silly experiment dissolving a fallen out tooth. Both goods are perfectly equivalent at achieving this end from my perspective. My 2nd most valued end is to have a drink, and for this I think the coke serves better this end, because it not only refreshes my thirst but is sweet as well.
Will I treat these 2 goods as 2 units of the same good? If you took both away from me and asked me to pick one, would I prefer one over the other (the coke over the water), due to the greater efficacy it could serve in my 2nd most highest valued end, even though I’d still use it to achieve the first? Or would i be indifferent between them and simply treat them as 2 units of the same good, and simply act to achieve my most highly valued end and ask for one of them?
If you were constrained to only your experiment, you would be “indifferent” to them. If you were able to experiment and drink, you would not be indifferent to them. Think about pocket knives vs regular knives.
I would be constrained to my experiment under such a value scale if I only took one of them it seems then.
When you are talking about experimenting and drinking, do you mean that e.g. I might take the coke even though I view it as the same good with regard to the first end, because I know there’s a chance I may change my mind and take the 2nd end as most valuable?
I guess you could also say doing so satisfies the “end” of having my bases covered. Would that be the proper way of interpreting this scenario?
You could do that. If uncertainty is an issue then you might calculate that the coke has higher value.
I think what you’re identifying is that these ends fit into a larger picture. Say, if you’re a hedonist or something.
I’m sure you don’t care about coke for its own sake.
Right… I think I’m getting the picture. I was trying I guess to critically examine and reconcile some things I’ve seen in Rothbard’s MES. For instance, with the opportunity cost of a sale good given up in an exchange, he states it to be that of the most highly valued end given up. While I understand this, I was wondering if the explanation or description becomes slightly more complicated when we consider the fact that goods may be “2 units of the same good” vis a vis some ends, and different ones for others, and how that would afect valuations and decisions.
I guess the answer to whether the glass of coke and the glass of carbonated water are the same good is that it depends on the end in question then? Or is it the ends in general, because I can see the actor then making the above uncertainty burdened decision to take the coke instead of the carbonated water based on the fact of their unequal servicabillity for his second end? This would violate such a proposed decision, causing us to generalise the notion instead to say that being 2 units of the same good constitutes being judged as equivalently useful to several (or all ends).
In terms of serviceability of all possible (potential) ends:
coke = carb water + option
Options have non-zero values in a free market. So if good A can serve as good B plus more, this (‘plus more’) optionality would always make good A more valuable than good B in my book – even if I don’t get to exercise this ‘plus more’ optionality in any particular case.