==================== HES POSTING ==================== Anthony Brewer wrote: > I am not aware of any link in Smith between utility/value in use > and subjective preferences. Tony may be right about Adam Smith, but such a link can be found in Turgot's 1769 article (proposal) 'Valeurs et monnaies'. I have no idea whether this article is translated into English, but since the French text can be read at Tony's website I guess it is not. Turgot use of the the word utility (utilite) differs perhaps slightly from our modern use. He talks about the "utilite des different besoins" (utility of different needs). But he certainly notes that the individual ranking of utilities is the basis of choice. It is put in the following words: Lorsque ce sentiment, ... , prend un caractere de permanence, c'est alors que l'homme commence a comparer entre eux besoins, a proportionner la recherche des objets, non plus uniquement a l'impulsion rapide du besoin present (as the savages did), mais a l'ordre de necessite et d'utilite des differents besoins. In order to describe how market values come about, Turgot introduces the notion 'valeur estimative' (estimated value). This is perhaps better translated as 'willingness to pay'. The idea is that individuals rank their needs according to necessity and utility and that considering the scarcity (rarete) they attach value to a commodity. Turgot mentions two works in which the same truth (cette meme verite) is told. The first is Galliani's Della Moneta. According to Turgot, however, Galiani was much to imprecise when he said that "the common measure of all values is the individual". (La commune mesure de toutes les valeurs est l'homme.) The second is Jean Graslin's Essay analytique sur la richesse et sur l'impot (1767), in which, according to Turgot this truth about value determination is 'confusement entrevue'. I have not read Graslin's work. Schumpeter notes that it is the best criticism of the physiocrats ever offered and that it presents a "comprehensive theory of wealth as a theory of total income", but he does not say anything about utility theory in that book. Henk W. Plasmeijer Faculty of Economics State University of Groningen ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]