----------------- HES POSTING ----------------- As a corrective to the "utils" nonsense that they had so often been exposed to in previous courses (you have heard, though never delivered I'm sure, the lecture that compressed about fifty or seventy-five years of the subject's history into a single throw-away line - "in the olden days economists thought that utility could be measured cardinally, isn't that absurd, ha ha ha, what did they use? utils? ha ha ha ha , now we are so much more enlightened") when I used to teach Economics 212 at the University of Saskatchewan, I regularly assigned a slim red book on demand theory whose title and author, alas, elude me. It was one of the few places in the secondary lit that correctly (IMHO) positioned and treated seriously the utility->price discussion. (If the inestimable Peter Dooley is on the list, he may remember the book's title and author.) The argument goes something like this - the discussion of whether utility is measurable or not is no more nor less far fetched than the discussion of whether other theoretical concepts - like time or distance, for example - are measurable. It's just a matter of correctly defining a unit. The (perhaps Marshallian?) view that utility is cardinally measurable in terms of money (measuring how much money you will part with, assuming constant MU of money, measures the utility you are receiving) comes apart when income and substitution effects are acknowledged, whence Slutsky and Hicks. In other words, we can't consistently define a unit. That being said, the discussion of how we (or societies) determine what something is worth - i.e. the theory of value - surely is no less than the core of our subject. Or at least appears to have been for its first three hundred years or so. Ken Gordon ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]