Marginal Utility Puns

The law of diminishing marginal utility essentially states that that the more of something you have, the less use for it you get. Wealth is no exception to this.

Consider that the utility of money is this: u(x) = x ^ (1/2), where x is money. This can actually be considered solid argumentation in support of progressive taxation. Because, taking 10000 from someone who earns 50000 hurts a lot less than taking 1000 from someone that earns 5000, which most would agree with.

On the other hand, the law of diminishing marginal utility does also lead to the conclusion that the current differences in the levels of monetary utility are not as big as claimed.

Consider billionaire Bill and middle class Mike. Bill's net worth is 100 billion and Mikes is 100 thousand. Comparing these values directly would give result in Bill having 1 million times more utility, which often translates into quite populistic statements like "It isn't fair that Bill has 1 million times more than Mike", but this completely disregards diminishing utility (not to mention net worth etc.). Using the utility function above, we get that the difference is "only" a factor of 1000.

Conclusions

The choice of utility function may be discussed to the moon and back, but it most certainly should be diminishing. Maybe the most acceptable solution would be to reverse engineer the utility function based on some nations progressive taxation, but I don't have the time to do it now.

However, regardless of the choice of utility function, the differences in the utilities of wealth is not as high as some leftists claim. And even if they were just comparing the actual monetary amounts (which could in some contexts be considered technically correct, at least if we assume no bad faith) they would miss the most important point of all:

It is never about wealth, it is always about the utility of wealth.

I thought of a funny thought experiment based on how utility is modelized by many economist.

Sorry if this is not clear but english is not my native language and this is a bit technical so ill provide a link to detail the utility concept https://courses.lumenlearning.com/boundless-economics/chapter/the-demand-curve-and-utility/

Utility is a 'score' that an economic actor gives a commodity, the actor then chose to trade commodities, so that to maximise his utility gain (the agents are considered to be rational).

The goal of a utilitarian economist should be to maximise the 'total utility' (sum of all utilities from all commodity owned by each actors)

Now utility is generally though as diminishing, having 1 house is great, having 2 house is cool, having 3 is meh, having 4 is tiring etc

Generally we would represent utility with a bell curve or a logistic function, lets say in our example we use

utility(x) = (5/(1+e^(-1x))-(5/2)

OK now for the funny part lets say we have two actors A with 100X and B with 0X, the total utility would be f(100)+f(0) ~= 2.5, if we redistribute X and transfer 10X from A to B the total utility would be f(90)+f(10) ~=5.0

So this very simple example seems to show that redistribution might be the way to go according by how the economy is modelized by economist, and in a hope to maximise total utility.

Happy to read about it if anyone know counter points to this, as I guess this point has been made before

A law in economics which states that as the amount of satisfaction provided by the consumption of every additional unit of good decrease as we increase the consumption of that good.

Shows that you like, media that you look forward to, becoming stale one day. Could be the reason anime looks stale, in general and movies seem like decomposed matter.

Does the Marginal Utility Theory necessarily assumes that people are rational utility maximizers?

Socialists seem to enjoy pointing out that "the right" always misrepresents Marx's LTV, and they make criticisms which do not demonstrate an accurate understanding of Marx's theories.

So, to defenders of the LTV, I ask: Can you give an accurate explanation of the marginal utility theory of value (or the subjective theory of value) and explain why it is wrong?

When you've reached the highest peak of your happiness, the only way is to go down. At least that's what the law states or what I understood.

This world really has a fair share of loneliness. It's like losing the value of something/someone when it is always and readily available.

But yeah, it is what it is and we can only hope that we can find that "peak" again and be happy again.

So, can we try to reach that peak? HMU!

The law of value seems to be something that I have a hard time wrapping my head around, if its supposed to be some general abstract regulatory principle of exchange value or just goods and services that are products of human labor. So I could very well be wrong here, and if so correct me if I am indeed wrong. However, it seems to me from my admittedly limited exposure to mainstream economics and my further exploration of Marxist economics that the law of value just seems to me that its another name for what most mainstream bourgeoisie economists would call maraginalism or marginal utility which serves as a significant theoretical underpinning within their intellectual discipline.

Robert Nozick, a twentieth-century american philosopher, coined the term "Utility Monster", where he has described a hypothetical being, which he calls the Utility Monster. The Monster receives much more utility from any resource that he consumes than anyone else does. This is calculated for per unit of the resource.

In the thought experiment, for instance, eating a cookie might bring only one unit of pleasure to an ordinary person, but could bring hundred units of pleasure to a Utility Monster. According to Nozick, if such a monster exists, he would end up consuming everything in the world because he will never allow anyone else to consume anything. Why? Since the resources of consumption will always be limited, and the monster couldn't possibly be able to share resources with others (since he values them so much more)! This will, by default, reduce the quantity of any resource.

In this article, we will describe another hypothetical being that is inspired by Nozick's Utility Monster. We are calling it the Utility Demon. The Utility Demon comes out when a person finds utility in anything, and it feeds on others' utility evaluations. For instance, if eating a cookie brings one unit of utility to Alice, then it'll bring hundred units of pleasure to the Utility Demon. But if Alice gets no pleasure in eating the cookie, the Demon gets nothing too. So, for the Demon, the value of his pleasure will always depend on someone else.

Now, we will draw a classic scenario of Microeconomics in the 'darkness' of the Utility Demon. The Law of diminishing marginal utility goes like this: as a person consumes an item or a product, the satisfaction or utility that they derive from the product diminishes as they consume more and more of that product. This is one of the pillar theorems of Microeconomics.

The question is in this case is intriguing. What happens to the Utility Demon in the case of diminishing marginal utility? Let's examine a situation.

Alice bought a bar of dark chocolate on a Monday, and she ate it after her dinner. The dark chocolate bar satisfied her so much that she decided to buy another one tomorrow. The Utility Demon fed on Alice's satisfaction at the highest level. The problem started when Alice bought the choco bar again, and she tasted it after dinner on the next day. It generated satisfaction, but it was lesser than the previous day. The Utility Demon became anxious as the diminished unit of utility became amplified for him. Since a one un

i just started studying economics, so please bear with me for not knowing what these are. i just couldn’t understand the terms and the difference and just everything. i asked our professor to explain with more details but he gave me a pizza example only confusing me more.

As the title says, I’m curious on the Marxist views on marginal utility, supply & demand, and price ceilings/floors. These are mostly what we’ve gone over so far in my AP microeconomics class this year and a lot of it has been obviously very pro-liberal so I’m curious of other views on these subjects.

For marginal utility, I do find it fundamentally flawed as I find it strange to try applying a nominal value to something like pleasure or satisfaction, which is extremely abstract and can’t really be accurately measured by dollar amounts. Though I do sometimes see capitalists arguing that the theory of marginal utility, as well as the law of supply and demand, contradicts the LTV. However, from what I understood reading Wage Labor and Capital, Marx seemed to state that LTV is used to calculate the full value of a product, though the price for that product (differentiated from value) would be augmented or diminished with changes in supply and demand. Therefore, it appears to me that the LTV and the law of supply and demand seem to complement each other, not disprove one another.

Is this incorrect? Is there actually contradictions between LTV and supply and demand which I am not seeing? Additionally, does marginal utility theory actually have any ground to it and does it have any place in Marxian economics, or is it just some theory trying to apply dollar amounts to something that can’t really be measured?

Apart from that, we watched this video today on price ceilings and floors and how they are generally set with good intentions but will always (besides for minimum wage) lead to inefficiencies in the market and generally harm everyone, because it is best just to avoid interfering with the market and things will always drift towards equilibrium on their own. In my mind, this only seems to apply to a perfect and idealistic world, but I think there are so many examples of how market economics really aren’t self-correcting in favor of both the producers and consumers. Could anyone touch more on this or clear it up?

Additionally, to say that the only time price floors are efficient are with minimum wages seems a little disingenuous in my opinion. By the same logic bourgeois economists use to say price ceilings and floors are harmful to all market participants in all situations, couldn’t they say the same exact thing about minimum wage (and granted some do)? So what is the Marxist view on price ceilings and floors. Are they

This was said in askphilosophy, so i guess it was my fault. does marginal retreat exist?

Marginal utility governs demand. But, if I'm not mistaken, Wieser's Law of cost postulates that marginal utility governs process of production too. How?

And my second question is about mainstream neoclassical paradigm. Is it true that mainstream economists do not see marginal utility as a force that determines supply? If it's true, do they think that supply is determined by something objective? Does it mean that, according to mainstream, subjectivity and subjective value only exists on the demand side?

"It was not long until the entire theory of marginal utility was abandoned, since it obviously rested on circular reasoning. Although it tried to explain prices, prices were necessary to explain marginal utility."

And Law of Value: the series says:

"When you are in the supermarket calculating your preference scales [...] you aren’t just considering your preferences for fish and coconuts in the abstract, as if on a desert island. You are also considering the market prices of these commodities. This market price already exists before you make your subjective value judgements. But this is problematic. Subjective valuations were supposed to explain price, but now we have to assume the prior existence of prices in order to explain subjective value judgements."

It really is that simple that marginal utility is circular resoning?

As I understand it, marginal utility suggests that a dollar in a poor person's hand confers more utility than that same dollar in a wealthy person's hand. While I understand this is true from the perspective of that person, is it also true from the economy at large? In other words, does economic output increase alongside marginal utility?

The two seem somewhat similar although distinct, and I wanted someone to flesh out the nuances to me. I find it to be important since marginal utility is such a foundational concept in mainstream Bourgeoise economics, whereas Marx does make mention of use value.

I believe many times when socialists who are familiar with marxist economics talk and interact with those mostly only familiar with mainstream neoclassical based economics, they are largely talking at each other instead of with each other in jargon and language that are only somewhat mutually intelligible to each other but much gets lost, confused, and frustrated in translation.

For example, I'm moving in an appartement where the ex tenant is selling all her furniture. She want's to sell me this those night tables for 50$, I don't really have any use for it and told her I,m willing to take them for 20$ because of that even tho they might be worth more, it's as high as I'm willing to go for those table and on her side she says they are antiques and she's not willing to go under 40$. And I'm telling her I don't mind that they are antiques because they are not my style and i don't really need them. So what's the difference between our both percieved value of the tables called? Could i say the marginal utility of those table is lower for me than it is for her hence the reason why the trade doesn't occur? in other word what's the name of the difference between the subjective value of the seller and the buyer of the same item?

There is a famous example of the marginal utility by Professor Jesus Huerta de Soto. If someone is thirsty, the individual is demanding cups of water. The first cup of water that he drinks will be the one makes him the less thirsty and would therefore be the one he values the most, why would the individual value more the second or the third cup of water if the thirst they take a way is less when compared to the first glass. Obviously the individual will value the most the first cup of water, if he is thirsty enough he could ask for a second or a third cup, and probably he wouldn’t even be able to finish the last cup he orders as he wouldn’t thirsty anymore. The thirst each cup of water satisfies would be declining by each cup the individual drinks until his thirst is gone, after his thirst is gone the individual would value another cup of water on a really low grade, probably something similar to zero. How could this be argued by leftists, why does this has to be empirical and why its not enough to be based on a priori statements. In this case, the thirst of the individual determines how much he values each cup of water, how much he is willing to give up to satisfy his thirst.

https://drive.google.com/file/d/1keV5Le3PFKhXrVnOBk2hhuUGVtt3xMiv/view What do yall think about this? And if yall could also help explain it a bit, math is hard.