Menu
Home
Log in / Register
 
Home arrow History arrow A Brief History of Economic Thought
Source

The Jevonian Revolution

Jevons did not pursue an axiomatic method, in which what matters is the logical construction of the theory and not its realism: had he not embraced a sensistic view of man, he would not have found himself at ease in developing a subjective theory ofvalue.

In developing this theory Jevons modified the meaning of some key concepts, thus breaking with the earlier tradition. Such modifications, essential to build the marginalist analytical edifice, mainly concerned the notion of utility inherited from Bentham, which Jevons oriented in the opposite direction to that suggested by John Stuart Mill. Firstly, Jevons reduced to two, intensity and duration, the elements that determine the quantity of pleasure or pain connected to a given action and considered the quantity of pleasure as determined by their product, thus obtaining a quantitative, mono-dimensional expression ofvalue in use. Time, hence duration, was treated as a continuous variable and, symmetrically, so was intensity. In this way the quantity of pleasure, or in other words utility, turned out to be itself a continuous variable, thus allowing for the applicability of differential calculus for defining the ‘final degree of utility’, nowadays commonly known as marginal utility.

Secondly, Jevons stressed that utility is an abstract relationship between object and person, not a property intrinsic to the object. Any object may, in fact, have a different utility for different persons or in different moments of time. What matters is not so much total utility, but rather the increment of utility when the quantity available of the commodity increases, i.e. the final degree of utility. Each individual signals such a magnitude with readiness to pay for the commodity itself. This allows us to compare through the market the valuations of a given individual for different goods, but also - through the amount of money each of them is willing to pay - those of different individuals for the same good; however, this fact is not in itself sufficient to ensure the possibility of a social felicific calculus, since nothing guarantees that every individual will attribute the same utility to any given quantity of money - and Jevons emphatically denied the possibility of interpersonal comparisons. Consequentialist ethics, requiring interpersonal comparisons, was thus made to disappear, leaving room for an economic science reduced to a theory of rational choice, under the postulate that each individual is able to compute in a mono-dimensional space all the consequences of her/his action, at least in the economic sphere.

Jevons’s definition of economics also differed from Mill’s, focussed on the desire to possess wealth. In fact, Jevons limited economics to a specific subset of feelings, ‘the lowest rank of feelings’: ‘The calculus of utility aims at supplying the ordinary wants of man at the least cost of labour’.4 Such a definition was essential for his crucial aim, the formulation of economics as a mathematical science: ‘It is clear that economics, if it is to be a science at all, must be a mathematical science . . . our theory must be mathematical simply because it deals with quantities.5 It was this crucial aim which led Jevons to assume human feelings as a one-dimensional quantitative variable: a point which was stressed again and again.

The core of the theory consisted of the analysis of individual choices between different pleasures (consumption) and pains (labour); the feelings (preferences) of each individual had to be assumed as an independent datum of the problem, not influenced by the choices of others. Only under these conditions could the summation of individual behaviours constitute a theory of the whole economy. In other words, methodological individualism6 was a necessary requisite for the subjective theory of value but was in no way justified by Jevons: it was simply postulated, as implicit in the very structure of his theory. Jevons viewed economics as a problem concerning the maximum satisfaction obtainable from the allocation of a given amount of resources. In Jevons’s own words (1871, p. 254; italics in the original): ‘The problem of economics may ... be stated thus: Given,

  • 4 Jevons 1871, pp. 92-3. This definition is only apparently obvious and unproblematic. For instance, it would relegate my demand for Bach recordings to the lowest rank of feelings, exactly on the same level as my demand for chocolate (both, recordings and chocolate, being part of my ordinary wants and having effects on my budget); were it not so, economics would take into account only part of the consumer’s expenditure decisions, and it would be impossible to define a budget constraint univocally.
  • 5 Ibid., p. 78; italics in the original. As a matter of fact the last sentence should be inverted: ‘our theory must deal with quantities - namely with variables defined in such a way as to be liable to be treated as one-dimensional quantities - because only in this way are we able to work it out in mathematical terms’.
  • 6 There are a number of definitions of methodological individualism. Here we mean by it the assumption that society is nothing but a sum of individuals and that the preferences of every individual are independent of those of any other individual, so that the behaviour of the economy is explained starting from individual choices.

a certain population, with various needs and powers of production, in possession of certain hands and other sources of material: required, the mode of employing their labour which will maximize the utility of the produce.

Jevons’s decision to formulate economics as a mathematical science compelled him to redefine as measurable magnitudes the motivations of human actions: we abandon the difficult path of a social science that endeavours to take into account the complex nature of human beings and human societies, forking off along the path of ‘economics’ built on the model of physical sciences - at the price of substituting the real world with a fictitious one-dimensional picture.

 
Source
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
 
Subjects
Accounting
Business & Finance
Communication
Computer Science
Economics
Education
Engineering
Environment
Geography
Health
History
Language & Literature
Law
Management
Marketing
Mathematics
Political science
Philosophy
Psychology
Religion
Sociology
Travel