The money income of the richest man is usually not sufficient to cover every outlay that he might desire. Acting economically therefore, so as to secure what Gossen calls the Grosste an Genuss, the greatest possible enjoyment, we shall distribute our expenditure so as to "make it go as far as possible," from the satisfaction of the most urgent wants down to the most insignificant. The larger the income is, the farther it will go, and the longer will it be before we need to break off our satisfaction. But the Grosste an Genuss could not be reached if the separate branches of expenditure were not adequately weighed against each other. Nowhere must the boundary-line be overstepped, which is fixed by the general circumstances of our wealth. Every overstepping in one branch will have to be paid for in another, which other, as represented by a higher degree on the scale of wants, will impose a sacrifice greater than the enjoyment got from it. To this extent it is quite possible to speak of a "level of household expenditure," of a general condition of life prescribed for every household by the peculiar amount of its demand and the peculiar amount of its means, and necessitating strict adherence to it in all its branches. It would, however, be a mistake to believe -- as almost every writer who has occupied himself with this question has done, Jevons more than any other -- that it is necessary to keep strictly in every branch of expenditure to the same degree of satisfaction, the same level, the same marginal utility. That is quite against the nature of wants, for wants have not each an equal but each a peculiar satiation scale. Were the "level of household expenditure" to be understood in this way, every addition to income would require to be laid out equally in corresponding enlargement of every branch of expenditure. As a matter of fact it is usually spent on a few individual branches, while the others remain as they were; or, if the additional income be so great as to allow of an improved condition of things all round, the extra expenditure is distributed in the most irregular manner. The satiation scales of wants are very diverse; the receptive power of one want is great, that of another comparatively small; that is to say, one is susceptible of a degree of intensity which another does not teach, or which it oversteps. The principle for the economic employment of goods of manifold usefulness is not, then, that we must, in every employment, obtain the same lowest possible marginal utility, but that in all employment as low a marginal utility be reached as is possible without necessitating the loss, in some other employment, of a higher utility.
What has just been said applies as well to the economic management of supplies of goods destined to cover periods of time. Premature and extravagant indulgence should not impose unnecessary burdens on the future. It would be best to divide the enjoyment equally over the whole period, but this is frequently made impossible by the nature of goods, which does not allow of their being kept, as also by the uncertainty of providing for changes of value in the economy in question. The limit of employment should always be of such a sort as promises the greatest amount of utilisation on the whole.(1*)A special question is here suggested: -- Are present and future satisfactions to be estimated entirely alike? Is not precedence in time also precedence in degree of importance? Is it not right that enjoyments should be considered of less value the further they are in the darkness of the future? Jevons has answered this question in the affirmative, and since him many others, some with great positiveness, though, as I think, wrongly. We cannot avoid going into this matter more closely, even though it detains us a little from the attainment of our present object, the deduction of the elementary law of value.
NOTES:
1. See Ursprung des Werthes, p. 146, and Sax, p. 371.
