ABSTRACT
One of the most important early contributions Say made to economic analysis was his utility theory of value, and yet the merit and the influence of his contribution is somewhat ambiguous. Even though he can hardly be credited with the creation of a mature utility theory of value, both because his theory lacks any real conception of the margin and because there is a very old continental tradition of finding the source of value in utility, Jean-Baptiste Say certainly made ample use of a utility theory of value that allowed him to develop the analysis of ‘immaterial products’ or services. Nevertheless, Say’s
analysis is rejected by Walras (1952) as a true precursor because, Walras claims, Say neglected the important role that scarcity plays in valuation. We must, however, examine the persistent claim that Say, although using
the language of later contributions to economic analysis, was not an important source for Walras (1952). Schumpeter, for example, writes that:
J.B.Say…following the French tradition (Condillac, in particular), made exchange value dependent upon utility but, failing (like Condillac) to add scarcity, stumbled over the fact, so often explained before him, that such ‘useful’ things as air or water normally have no exchange value at all. He said that actually they do have value; only this value is so great, infinite in fact, that nobody could pay for them and hence they go for nothing. It is true that he did not stop at this ineptitude. He did rise to the imperfect (yet so significant) statement that price is the measure of the value of things and value the measure of their utility, a statement that heralds Walras’: les valeurs d’échange sont proportionnelles aux raretés [marginal utility, J.A.S.]. Mostly, however, he merely used a rather primitive supply-and-demand analysis.
