Talk:Marginal utility/Archive 2

Economizer replaced

An individual will typically be able to partially order the potential uses of a good or service. For example, a ration of water might be used to sustain oneself, a dog, or a rose bush. Say that a given person gives her own sustenance highest priority, that of the dog next highest priority, and lowest priority to saving the roses. In that case, if the individual has two rations of water, the marginal utility of either of those rations is that of watering the dog. The marginal utility of a third gallon would be that of watering the roses.

with

An individual will typically be able to partially order the potential uses of a good or service. The marginal utility of a thing is its least useful application in satisfying the wants of a person. For example, a ration of water might be used to sustain oneself, a dog, or a rose bush. Say that a given person gives her own sustenance highest priority, that of the dog next highest priority, and lowest priority to saving the roses. In that case, if the individual has two rations of water, the marginal utility of either of those rations is that of watering the dog. If the individual has three rations of water, the marginal utility of a third gallon any given ration would be that of watering the roses. Therefore, as the supply of water increases a given ration of water is worth less and less to the individual. As a result, he is willing to part with one ration of water for something less useful to him in exchange than he would if he had less water. But, unless he acts altruistically, he will only part with a ration of water for something that is more useful in satisfying his wants than that ration of water. This is why, if it is assumed the individuals seek to maximize their own gain in trade, trade is mutually beneficial. This is because, barring mistaken predictions on the usefulness of things, both individuals who trade receive something more useful in satisfying their wants than that which they give in exchange.

Well:

1. The first insertion is a somewhat careless definition of “marginal utility”. A careful definition was provided at the beginning of the article.
2. The section change (concerning the third gallon) isn't particularly objectionable, but loses the notion of change.
3. The next sentence (“Therefore … a given ration of water is worth less and less”) basically treats the “law” as if it really is a law; and it teeters in the brink of sneaking-in neoclassical presumptions.
4. The next sentence (“As a result, he is willing … in exchange”) rushes us into the issue of marginal rates of substitution prematurely. These are covered further along, and they are not themselves part of the “law”. (Diminishing MRSs do not require that all goods and services obey the law.) Also, the wording is gender-biased.
5. The next sentences (“unless he acts altruistically”) is just awful. Altruism does not represent acting contrary to one's priorities. Altruism simply represents having different priorities. The “law” will work if one gives highest priorities to the rose bushes, next to the dog, and last to oneself; it will work if one gives more priority to one's neighbor; &c.
6. The next sentence (“This is why”) continues the error of the previous sentence. The “law” doesn't care what one's priorities are, so long as one has priorities of some sort!
7. The last sentence (“This is because”) rushes-off to discuss trade. This section is not the place for it; this article is not the place for it. A good article on trade could discuss the point that individuals will only trade if the expect the trade to advance the objectives (egoistic, mutualistic, altruistic, or whatever) to which they give priority.

—SlamDiego 03:31, 10 March 2007 (UTC)

To trade altruistically is to trade without self-interest. It is to be fine with trading to receive something less useful by trading away something more useful. Marginalism assumes people seek to acquire things that are useful in satisfying their wants; they won't sacrifice something more useful in order to receive something less useful. About "the third gallon," it's ANY GIVEN GALLON that the marginal utility is decreased. It doesn't matter which one you pick. That's the poing of that edit. Economizer 03:38, 10 March 2007 (UTC)

Again, you are very wrong. You've confused the concept of usefulness with that of egoistic gratification. For an egoist, indeed a particular sort of gratification may be the ultimate measure of utility; but the concept of usefulness obtains no matter what one's priorities might be, and hence the concept of marginal utility obtains. Marginalism does not itself make any assumption of egoism; some marginalists did; others avoided making this unnecessary assumption. (And even if every marginalist had made that assumption, this article is about marginal utility itself, and would have to work out the peculiar implications of mutualism and of altruism if it needed to work-out the implications ofr egoism.)

I understood the point of your change w.r.t. the third gallon, which is why I said that the change wasn't particularly objectionable. —SlamDiego 03:53, 10 March 2007 (UTC)

"Usefulness" toward what end? Think about it. "Usefulness" doesn't mean anything by itself. When we talk of usefulness or utility in economics we are talking about usefulness toward satisfying the wants of any given person. The assumption in marginalism is that people seek to maximize the satisfaction of their wants. Therefore they seek to acquire things that are productive toward that end and as much of those things as possible up to the point where the usefulness in satisfying wants starts decreasing. Economizer 04:26, 10 March 2007 (UTC)

If people don't seek to maximize their well-being, then marginalism is useless. It would serve no purpose whatsoever. Marginalism is based on the observation of human behavior that they seek to maximize their own well-being. It can't be alienated from that. Economizer 04:44, 10 March 2007 (UTC)

The person who needs to think here isn't I. No matter what the ends, resources have or lack usefulness with respect those ends. So long as ends can be prioritized, resources have marginal usefulness. Unless you're going to trivialize the notion of “the wants of any given person” so that an altruists wants are said to be the well-being of others, and so forth, you are merely begging the question by assuming that utility must be w.r.t. one's own wants. (And, if you do trivialize the notion, then your giving away the argument.)

An assumption of marginalism is indeed that people prioritize — that's the same thing as maximizing — but marginalism doesn't care what their priorities might be. Without any assumption of egoism, marginalism gets downward sloping demand curves, upward sloping supply curves, &c.

In point of fact, you are making one of the fundamental mistakes of vulgar critics of marginalism, who think that, by attacking egoism, they can refute marginalism. —SlamDiego 04:48, 10 March 2007 (UTC)

I'm not critical of marginalism. I agree with it fully. Again, "usefulness" does not mean anything by itself. Useful for WHAT? Economizer 04:53, 10 March 2007 (UTC)

I was aware that you agreed with what you believe to be marginalism; so address my point: you are making one of the fundamental mistakes of vulgar critics of marginalism. Saying that “usefulness” doesn't mean anything is rather like saying that “3” doesn't mean anything. (“Three what?”) There is still a logic to usefulness just as there is still a logic to numbers. And, just as the logic of numbers gets along rather far without specifying three what, the logic of usefulness gets rather far without specifying usefulness for what. Further, just as there many some people who don't get the logic of numbers, there are many who don't get the logic of usefulness; so we need to talk about each.

Over and over again, you will find marginalism attacked for being a tautology. The reason for those attacks is that it pretty much is — it doesn't say useful for what. But math is also attacked for being a tautology. And we can see that marginalism and math were are useful tautologies, because people keep prescribing things that marginalism and math show are unreasonable. —SlamDiego 05:23, 10 March 2007 (UTC)

Open your eyes. There would be no law, or phenomenon, of diminishing marginal utility if people didn't seek to maximize their well-being. A being who didnt' seek to maximize his well being might keep drinking water perpetually no matter how full he got. Marginalism isn't a tautology. It is based on human behavior. It makes predictions based on assumption of how humans generally behave. Economizer 05:29, 10 March 2007 (UTC)

We don't know for sure why people behave the way they do, but if it assumed that they do seek to maximize their well-being, we are able to make accurate predictions. That's the value of marginalism. It's just a theory. There may come along a better theory eventually. Economizer 05:38, 10 March 2007 (UTC)

Illogical nonsense. If the person gives highest priority to the rose bush, next to the dog, and last to himself, then

1. With one gallon, the marginal utility of a gallon is that of watering the rosebush.
2. With two gallons, the marginal utility of a gallon is that of watering the dog.
3. WIth three gallons, the marginal utility of a gallon is that of watering herself.

She doesn't drink three of three gallons, because that deprives the roses and the dog. She doesn't drink two or two gallons, because that deprives the roses and the dog. She dosn't drink one of one gallons because that deprives the rosebush; and if the rosebush were gone, then she still waters the dog.

You have completely confused marginal productivity in satisfaction of a type of want with marginal utility. You just don't get this stuff much at all. —SlamDiego 05:43, 10 March 2007 (UTC)

You're not following through with your thoughts. She doesn't drink three gallons because that deprives the roses and the dog. Fine. Now take it to the next level. Why does she not want to deprive the dog and the roses? Because if she did that, that would make her less happy than she would be if she watered the roses and the dog. Marginal utility assumes that people seek to maximize their well being. Maximization of well-being is what people aim to do when they are weighing alternatives. Having that as an assumption allows us to come up with marginal utility theory. Economizer 05:48, 10 March 2007 (UTC)

No, that's exactly the trivialization that I mentioned above when I wrote:

Unless you're going to trivialize the notion of “the wants of any given person” so that an altruists wants are said to be the well-being of others, and so forth, you are merely begging the question by assuming that utility must be w.r.t. one's own wants.

If you simply identify “well-being” with any satisfaction of any priorities, then “altruism” as you defined it ceases to be a coherent concept, any possible deliberate choices are “self-interested”, there is no point in mentioning self-interest. SlamDiego 06:00, 10 March 2007 (UTC)

I don't know how you're using the term "altruism." I'm using it to refer to people being motivated to increase the well-being of others instead of the well-being of themselves. Marginalism assumes that when individuals weigh which alternative to pursue, they do so by making a judgement on which alternative maximizes their OWN well-being. She doesn't drink all three gallons because doing so would diminish her well-being. It would make her unhappy to see the dog thirsty and her roses dying. Economizer 06:06, 10 March 2007 (UTC)

The reason that I put “alltruism” in quotes is because, for purpose of discourse, I accepted your definition. You are still not getting the logic here. Substitute Other Person A for the rosebush and Other Person B for the dog:

If the person gives highest priority to Other Person A, next to Other Person B, and last to himself, then

1. With one gallon, the marginal utility of a gallon is that of watering Other Person A.
2. With two gallons, the marginal utility of a gallon is that of watering Other Person B.
3. WIth three gallons, the marginal utility of a gallon is that of watering herself.

She doesn't drink three of three gallons, because that deprives Other Person A and Other Person B. She doesn't drink two or two gallons, because that deprives Other Person A and Other Person B. She dosn't drink one of one gallons because that deprives Other Person A; and if Other Person A were gone, then she still waters Other Person B.

Whether it's a rosebush or another person, if someone dies of dehydration to save something else, then either she is not acting in “self-interest” and promoting her “well-being”, or the definition of “self-interest” and of “well-being” have been trivialized exactly as I said. —SlamDiego 06:13, 10 March 2007 (UTC)

You're still not following through. Why does she not want to deprive the other people of water? It's because it makes her happier allocating water to them before she allocates it to herself. That's self-interested behavior. Marginalism is based on the premise that people make decisions based upon what alternative has the most utility in satisfying their wants. Why does someone give someone a drink of water instead of themselves? Because it satisfies their OWN wants to do it. The happiness that one receives is of a larger magnitude than the happiness one receives by drinking the water oneself. Economizer 06:19, 10 March 2007 (UTC)

No, you are refusing to acknowledge the point about trivialization. Given the notion that doing what one wants is “self-interested”, no matter what it is that one wants, then “altruism” as you define it isn't even a coherent concept. Nothing but “self-interested” choices can be made. And “self-interested” doesn't give us any answer to “Useful for what?” because any possible use will ex definitione be “self-interested”. —SlamDiego 06:33, 10 March 2007 (UTC)

No, that's not to say that altruistic behavior doesn't occur. You have to realize that this is an abstraction which says that AS A GENERAL RULE people act to maximize the satisfaction of their own wants. Some people may act altruistically all the time. Some may act self-interested all the time. Some people may act altruistically sometimes and self-interested other times. But, overall human behavor is self-interested. In other words, if all behavior is not self-interested, then at the very least, more people act out of self-interest than not. And those that act sometimes out of self-interest and sometimes altruistically, act out of self-interest most of the time. That general assumption is the foundation of marginal utility theory. Economizer 06:37, 10 March 2007 (UTC)

Haha! Find an example of altruism which isn't like the person above who waters Other Persons A and B before herself. That is to say, find a case where one cannot say: She wanted to help someone else, and hence tried to satisfy her wants by trying to help that person.

(You already know where this is going, don't you? I suggest that you cut your losses.) —SlamDiego 07:04, 10 March 2007 (UTC)

If that's all you got then you're the one that needs to cut his "losses." I see you're looking at this as a competition when you should be looking at this as a learning experience. Economizer 07:07, 10 March 2007 (UTC)

See, you're not going to give an example, because you know that it's not possible. You generalized “self-interest” so that it would apply to any choices where marginalism applied; but because marginalism always applies, you were forced to generalized “self-interest” to apply to any choice. You defined “altruism” into impossibility! —SlamDiego 07:10, 10 March 2007 (UTC)

I didn't respond because I couldnt' make out what you were saying. No I havent defined altruism into an impossibility. If you want an example of altruism, one would be a person that gives to charity because it is ultimately useful in satisfying the wants of others. Marginalism on the other hand assumes that people ultimately do things because they are useful in satisfying their own wants. Economizer 07:13, 10 March 2007 (UTC)

Uh uh. Watering Other Person A or B is an act of charity. And when someone gives money to charity “It's because it makes her happier allocating” money to charity. Watering Other Person A or B “is ultimately useful in satisfying the wants of others” too. —SlamDiego 07:19, 10 March 2007 (UTC)

You're not following. Marginalism doesn't assume that people DO NOT act altruistically at times. It is based on the observation that it appears that people IN GENERAL act to maximize the satisfaction of their own wants. This observation is abstracted into as assumption that people do act to maximize the satisfaction of their wants. Economizer 07:23, 10 March 2007 (UTC)

I'm following your every dodge. Above, you claimed that the giving of water wasn't altruistic. If it was, then we see that one can talk about marginal utility without assuming self-interest. So you've been challenged to show that your argument for the “self-interest” of giving will apply to any giving, and you can't think of a case.

If you don't think of a case, then your claim that “self-interest” is an intrinsic assumption of marginalism per se falls apart. So meet the challenge, or admit that, whatever rôle the assumption of self-interest (non-trivially defined) might be in economics generally, it is orthogonal to the logic of marginal utility. —SlamDiego 07:33, 10 March 2007 (UTC)

I claimed that giving water wasn't altruistic, speaking from the perspective of marginalism. I don't KNOW whether it's altruistic or not. I'll tell you that it doesn't usually appear to be. The theory of maringal utility is not compatible with an assumption that people seek to do those things that they think has the most utility for others by neglecting what they think is useful for themselves. That would be totally incoherent given the concept of marginal utility. Economizer 07:39, 10 March 2007 (UTC)

You claimed that it wasn't altruistic because it attempted to satisfy a desire; all deliberate action does this. And, more importantly, the logic of marginal usefulness held for the watering example. So if it might be an altuistic act, then marginalism may be applied to altruistic acts. Again, the hypothesis that people are generally self-interested (non-trivially defined) has played an extremely important role in economics, but it is not an intrinsic part of marginalism. If you paid more careful attention to the article, you would have seen that it didn't need the assumption to get diminishing rates of marginal substitution, &c. You wanna throw self-interest into economic theory Good idea! Butnot here. —SlamDiego 07:48, 10 March 2007 (UTC)

I did not claim "that it wasn't altruistic because it attempted to satisfy a desire." I simply claimed that it was not altruistic. I simply assumed it. There is no reasoning at all behind that. It's simply the assumption that marginalism is based upon. That is an intrinsic part of marginalism. There is no such thing as a theory of marginalism compatible with the assumption that people act to satisfy the wants of others rather than their own. It's not coherent at all. Economizer 07:53, 10 March 2007 (UTC)

And I will indeed "throw self-interest" in this article. There are sources. If you delete them you are being disruptive. Economizer 07:55, 10 March 2007 (UTC)

Ah, no. One does not say

You're not following through with your thoughts.

because one has “simply assumed” something else. The reason that you claimed that it wasn't altruistic was because I showed that the logic of marginal utility applied to it.

And, again, your definition of “altruism” as

people being motivated to increase the well-being of others instead of the well-being of themselves.

and “self-interest” as acting to satisfy one's wants (no matter what one wants) then it is your claim that some acts might be altruistic which is incoherent. “Self-interest” couldn't then ever not hold.

The Watering example showed that the logic of marginal utility holds for altruistic behavior. If we examined any other act of charity, it would be likewise. And, because it holds, we see that self-interest is going to be irrelevant to the article. If your only excuse for including “self-interest” is that you define it to mean any desire, then you are now just going to edit in bad faith the article for reasons of ego. —SlamDiego 08:17, 10 March 2007 (UTC)