Now suppose he’s given 8 dollars, again, it’s not controversial that he will purchase A anf F.
Why not A and A, if he prefers A to F?
I think the trouble with value scales is that their meaning is not rigorously defined - now we mean one thing, on another page another. Sometimes it becomes tacitly assumed that from a ranking of individual A, F, and T one can infer rankings of all possible combinations of them (which I hope we agree is inconsistent with the theory of subjective value).
Returning to your example - the scale A over F over T can be understood at least in two different ways.
The person always prefers to get as many As as possible, falling back to F and eventually to T only when more As are unavailable.
The person prefers one A to one F to one T, but we do not know anything about bundles of more than one good.
If we get the definition of the value scale fixed, we can make meaningful assertions - otherwise we are just inviting more critique for AE as a pseudo-science.
I think the trouble with value scales is that their meaning is not rigorously defined - now we mean one thing, on another page another. Sometimes it becomes tacitly assumed that from a ranking of individual A, F, and T one can infer rankings of all possible combinations of them (which I hope we agree is inconsistent with the theory of subjective value).
Returning to your example - the scale A over F over T can be understood at least in two different ways.
The person always prefers to get as many As as possible, falling back to F and eventually to T only when more As are unavailable.
The person prefers one A to one F to one T, but we do not know anything about bundles of more than one good.
If we get the definition of the value scale fixed, we can make meaningful assertions - otherwise we are just inviting more critique for AE as a pseudo-science.
Even taking on board the possibillity the theatre sells more tickets, I do not know how preferences ranked as follows:
A
F
T
Give one the impression he would buy 2 of A instead of A and F individually with 8 dollars. These are the valuations of the individual units of A, F and T, not as “classes of goods.” The only place an additional A could go is below T, and since that is below F in the scale of preferences it would have to be valued less than the additional F.
With regard to the rest of your post, I agree with its theme, which is very much reflective of my erring on the side of empirical caution in the OP, with regard to the limitations of what can be inferred from action since, preference is only demonstrated over the actual marginal units being traded, and only from this can we come to understand the concept of utility at large.
I think a skeptic could quite easily try to “refute” us by screaming “interpersonal utility comparisons!” all day long, as a fatal contradiction when establishing marginal utility theory, if we’re not careful. Such a critique carried to its full conclusion would not only damage the Austrians, but the entire corpus of economic theory post Menger.
He is only mortal. The sheer volume and overall quality of his work and his tenacity are why he is “hero-worshipped”. He basically reconstructed and unified Austrian theory. Austrian theorists may differ from one another after Mises but few diverge from him himself, as opposed to refine and tweak his work.
Indeed, Jon, that is very much the direction I myself see as productive. I may well be mistaken, but I see the praxeological edifice overall as a rather sound one, and one that I do not see in any contradiction with the general methodological underpinnings of science, when its limitations are properly understood in application. I feel there is much work to be done, and many areas unfortunately neglected over the years, needing cleaning up and tweaking as you mention. This situation is of course understandable given the school’s miniscule size for so long, hopefully things can now change. Praxeology, like mathematics can only improve as more people learn to properly apply it.
Now suppose that we tell him he has 12 dollars, so we may well expect him to purchase A, F and T, but if we then turn around and tell him that he can only purchase 4 dollars worth, he may now only purchase A. This is functionally equivalent to the first case in which he knows he only has 4 dollars to begin with. Yet I think one could claim it also displays a functional equivalence with the case where he has A, F and T to begin with, and we then tell him he has to lose 2. Ignoring the intermediary device of dollars, the actual opportunity costs are represented by forgone ends F and T in both the first and final case. Is this the kind of things you guys were pointing at?
In retrospect, I think what I have written above is a completely false dichotomy. Even when we inform the hapless man he is 8 dollars short of buying all opera tickets, his preference is dictated by how he utilises 4 dollars, and therefore equivalently, when he is asked to use just one unit. He is not given the choice of exchanging the most valued unit for the lower 2. Either we or the circumstances, force him to not even be able to consider keeping 2 of his possible tickets, and decide on which he would like if he can only pick one.
These are the valuations of the individual units of A, F and T, not as “classes of goods.” The only place an additional A could go is below T, and since that is below F in the scale of preferences it would have to be valued less than the additional F.
I understand this interpretation of value scales, I’ve just seen a lot of discussions gone awry when people started being confusing about what exactly is meant by value scales.
Having said that, I still have issues with this definition: it seems to assume that personal preferences are “incremental”, for the sake of a better word (given more possibilities, the person just adds more goods to his preferred state of the world, never removing goods he’ve chosen with less possibilities).
An example: let’s say the tickets price changed, so now A costs 6, F costs 4, and T costs 2. Having 2$, the person buys T. Given 4$, he still buys T, not F. Is this compatible with the original value scale? I say yes (though it is not the only possible compatible choice).
The value scale of A over F over T, as you noted, does not compare classes of A, F, and T. My interpretation is, it says that the person prefers one unit of A to one unit of F, and (attention!) one unit of A and one unit of F to one unit of A and one unit of T (and specifically says nothing about preference of one unit of F over one unit of T). Do you agree with this interpretation? Do you agree that the difference is significant?
PS: “incremental” as used here is more narrow than “marginal”, thus a use of a new word.