Content area
Full Text
Abstract:
Hermann Heinrich Gossen is one of the first neoclassical economists but unsatisfactorily known by the specialists and especially outside of outside the German-speaking space. In his work we find all fundamental elements of Neoclassical economics: subjective theory of goods, subjective theory of value, marginal utility, neoclassical mathematics. In 2010 we've celebrated his 200th anniversary.
Key words: goods, value, marginal utility, optimum
JEL Classification: B10, B13, B31
(ProQuest: ... denotes formulae omitted.)
Part 11
Nicholas Georgescu-Roegen (1906-1994) estimated that "the real break from the concept of value (value is labor - n.s.) was signaled, for the first time, by Gossen, who enounced that the value of a good can be exactly measured through the quantity of pleasure provided"1.
Hermann Heinrich Gossen's work explicitly formulates the subjective concept of value determined by utility, developed by economic neoclassicism.
1. Only economic goods have value. "For each individual only a definite quantity has value"2. Hermann Gossen mathematically assessed the value of economic goods as a positive difference between "the discomfort of labor" and "the pleasure provided" through the consumption of one or several goods, in well-determined quantities. Goods have value "as long as the pleasure of what is produced by labor is valued higher than the discomfort caused by labor"3.
Currently, all economic goods have value as they are available in quantities which are smaller than the amount needed and the pleasure they offer is supposed to be higher than the discomfort implied by their production and procurement.
If an individual possess an unlimited quantity of first category ultimate goods, it means that only the ones consumed up to the complete satiety of needs can have value as they are the only ones which have a positive marginal utility, more exactly "they progressively increase, in downward but positive sizes, the individual's total pleasure (utility, value)".
The goods consumed beyond the point of satiety do no longer increase the individual's total utility (pleasure, value), but on the contrary, they decrease it. Consequently, as they no longer provide pleasure (utility) they can no longer have value as the size of the value of an economic good is equal to "the magnitude of life pleasure that it gives us"4.
2. The value of an economic good is determined subjectively...