> I wrote: > > The problem with lower income doesn't really have directly to do with > > lower levels of consumption. Below some minimum, a lack of income > > will mean exclusion from normal social interaction. To take a simple > > example, in Ireland not being able to buy one's round in the pub can > > result in social isolation. The stress this puts on family relations > > can lead to domestic violence and child abuse. The unhappiness that > > potentially results from this situation is not due directly to lowering one's > > consumption of beer. Indeed, exclusion from normal social > > interaction rather than some absolute level of deprivation is the > > sensible definition of the poverty level. Tavis replies > > I'm not sure I understand the difference inasmuch as theory is > concerned. Neoclassical utility theory merely requires that people > derive utility from goods. It doesn't require that they enjoy them, just > that the utility is derived from the goods causes them to make allocation > decisions. Whether one enjoys the taste of beer or the social belonging > that one gets from buying a round, one is still deriving utility from beer. I suppose there may not be much difference as far as neoclassical utility theory is concerned. To do what Tavis suggests you have to put social belonging in the utility function. This could be done but- 1) it almost never is. I will bet a significant portion of my future utility that noone has ever illustrated indifference curves in intro classes by trading off widgets and social belonging. What claims scientists make when under interrogation by other experts (always use the passive voice, never make an unqualified statement, etc) is different from what they say in less formal contexts. When they "get down" neoclassical theorists really do think that happiness=consumption goods is a useful and not too distorted description of human psychology. 2)when you start putting all these other things in the utility function, as Jim D pointed out, the theory becomes completely tautological. People do what they do because all things considered they prefer to do it over the next best alternative. I can agree with this statement, I just don't think is says anything particularly meaningful. - I wrote, > > Secondly, the unequal distribution of income (and property) leads to > > social inequalities which disempower the lower income groups to the > > benefit of the upper income groups. This has numerous and manifest > > consequences (among which is the promulgation among academic > > economists of the idea that happiness = consumption and the > > unhappiness that this ideological conviction causes). Tavis replies > > No disagreement here, I don't think. Again, though, I'm not sure that > this is inconsistent with utility theory. For example, it is a fairly > general result that under Walrasian equilibrium, the tastes of rich > people are weighed much more heavily than those of poor people > (specifically, that the equilibrium is equivalent to a weighted > maximization of everyone's utility function, with the weights being the > inverse of the marginal utility of income). In order to criticize the > theory, I think one has to be more specific. My point was that the consequences extend beyond differential consumption between rich and poor. I wrotes > > The relationship between prices and wants is dialectical (mutual and > > simultaneous determination). There are some base human needs (food > > and shelter) but they are expressed only in specific cultural > > contexts and are probably seldom directly relevant to the question of > > the allocation of resources. Tavis replies > > I'll buy the first sentence, though again, the endogeneity of income to > wants is not necessarily deadly for utility theory. For example, one > could have a multi-period model where one period's tastes are determined > by the previous period's consumption. All of the neoclassical results > would then hold for a given period, given the previous period's economy. The initial period would consist of a consumption basket determined by producers or perhaps blind custom or perhaps history. Consumer sovereignty is lost in the model Tavis proposes and it consequently has no political point from the perspective of bourgeois ideology. It will not get a hearing within neoclassical economics. Tavis writes > > As for the second sentence: Do you really think that the need for > commodities is "seldom directly relevant" to the quantities produced? Is > it merely coincidence that our society produces a great deal more bottles > of wine than stuffed animals or gallons of milk than bottles fo Vitamin > C, even though these goods have similar production costs and prices? This > seems like a surprising position. Please elaborate. The first bottle of wine or gallon of milk may have to do with subsistence but the last bottle most likely does not. The total quantity of milk and wine produced has to do with customary consumption not universal human needs. It would be easy to find societies that do not produce wine or milk at all despite the capacity to do so and the need for the caloric intake. > I don't buy it. I'll grant that we live in a society obsessed with > consumption, but as a consumer I also can say that, having options > between different bundles, there are definitive ones that I prefer and > cannot afford as often as I want to: Going to movies vs. renting them; > buying CDs vs. taping them off friends; eating in good restaurants. > Granted, all of these are socially constructed tastes, but then movies, > CDs, and fancy food are all socially constructed phenomena. This doesn't > mean that they are constructed by those in peower for their own benefit. > For me, the pleasure derived from these goods is physical and transcends > any discourse or interaction with society in the process of their > enjoyment (my big beef with post-structuralism is that it doesn't really > allow any place for transcendental thought). I don't think the process of enjoyment is extra-social. People with lower income are much less likely to demand fancy food. They are also much less likely to enjoy it when given it, prefering food they are accustomed to. Tavis writes > The goal of the above is not to champion NC utility theory, but more to > suggest that many of the critiques of it made on this list are not > damning to it. Moreover, I don't think it's a valuable exercise to > criticize a theory without pointing to how its difficulties might be > overcome. One possible response is to pose a more plausible theory: the composition of consumption is determined by custom. Custom is constituted historically. The historical process is (over) determined by ______ (fill in the blank. I write in class struggle, but I think there are few on this list who will write in individual preferences and nothing else.) Terry McDonough
