Utility, the Paradox of Value and ‘all that’ and Classical Economics

Abstract

Since I wrote Nassau Senior and Classical Economics more than thirty years ago, I have altered in various ways my views both about the development of utility theory in the first half of the nineteenth century, and about the views and influence of Adam Smith. This is because I have learnt a little more about Adam Smith’s predecessors and contemporaries and about the classical period itself. In this essay I have tried to set out what now seems to me to be a more correct interpretation of the history of utility theory from Adam Smith to Dupuit in certain respects.

Utility: The quality of being serviceable or beneficial to mankind. The utility of an object has generally been considered as proportioned to the necessity and real importance of these services and benefits.

Malthus ¹

Some of the material used in this study was used in a summarised form in my paper ‘The Predecessors of Jevons — the revolution that wasn’t’. (Manchester School March 1972, Special Jevons Centenary Number). That paper considered certain developments in utility theory for a rather different purpose to that of the present study. A few paragraphs from that paper have been incorporated in the study with only minor alterations. See notes 29 and 34 below. I am grateful to the editors of the Manchester School for permission to reprint them.