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Regarding Bill Williams' comment about using the concept of utility in the classroom and
his direct reply to me, I think that the problem lies with the textbook, not the concept.
It is possible to write an economics text that contains the same important material
without using the term "utility" and "marginal utility." We can say that when individuals
choose among units of this and units of that, their choices reveal their preferences for
the last unit of the X that they choose over the additional units of Y that they could
have chosen with the same money.
 
The choice among marginal units is a real phenomenon (although don't ask me to prove it)
and students should learn this; although many, if not most, important buying choices by
consumers are not among marginal units. I have a preliminary intro text chapter on this if
you are interested.
 
I'm afraid that the modern texts are designed partly to make it easier for teachers to
give lectures and to give tests and to correct them. They are also partly designed to help
prepare the students for the mathematical version of economics.
 
 
Regarding David Colander's point about needing to make interpersonal comparisons in order
to do policy, Ludwig von Mises had a good answer. It was that economists should not do
policy. Rather, they should evaluate arguments that a specific policy would achieve a
specified goal or set of goals. One way that he expressed this was to say that economics
has the task of identifying the dominant deologies and determining whether the policies
that the practitioners of these ideologies advocate are likely to achieve the goals that
they believe can be achieved by the policies. For example, can socialist policies relating
to the organization of production by means of central planning achieve the goals of the
central planners?
 
The question to ask is whether the image, or model, of behavior and choice used to defend
a policy argument is (1) logical and (2) relevant, given the goals of that argument and
the environment of the policy. That way, economics can remain "value" free. As I recall,
Coase attacked the Pigouvian models on the grounds that they were irrelevant. This was
very much in the Misesian vein.
 
 
Pat Gunning 
 
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