Is there an economist in the house? In this post, I have endeavored to understand and explain Menger’s discussion of qualitatively different goods. But in it, he adds and subtracts value, which I thought was antithetical to Austrian economics, since value is ordinal and not cardinal (i.e., “values or utilities cannot be added, subtracted, or multiplied.” -Rothbard, MES).
Is my explication correct? The example I use at the end, along with the table I created, is based on the translator’s footnote #12 in chapter 3 of the e-text, as well as the passage in the text which that footnote is assigned to.
Was this arithmetical approach proven wrong by later Austrians? Did he himself come to reject it? Is it somehow valid?
I believe Bohm-Bawerk later explained how value was measured internally by individuals. He gives the farm analogy with 3 horses and two cows, and explains how the farmer has his own value scale, which can change at any given moment. I’m not entirely positive, but I believe it was him who explained that value was purely ordinal.
Mises too also thought that Menger , ‘let himself down’ vis his own theory of subjective value, in not being consistent enough with it.
Maybe of the part you actually qouted, things arent so bad, since it seems Menger was being explicit that he was assigning
numbers purely as a pedagogical tool; ( but don’t hold me to that.)