chapter  16
11 Pages

MARGINAL UTILITY IN THE ISOLATED HOUSEHOLD AND THE FUNDAMENTALLAW OF THE ECONOMIC COMPUTATION OF UTILITY

Karl Marx errs in these statements. The economy of a Crusoe or of the free, socialistic state of the future does not become transparently simple through the elimination of exchange and value-inexchange. In both cases appears the problem which gives rise to the peculiar difficulties of the theory of value. This relates to the economic computation of utility. The classical theory and older theories in general failed to see that such a problem existed. It is only here and there that one finds isolated remarks and observations which suggest that the question might be raised. In general there has been a perfect accord with the ideas just quoted from Marx. It has been supposed that the execution of the law of the economic principle, by which the maximum utility is sought, will be found to be "transparently simple. ' Consequently it was regarded as a waste of words to lay down rules covering the practical computation of utility. Endless pains, however, were taken to discover the laws of value and of price.