Marginal Utility Quotes

Psychologists call this habituation, economists call it declining marginal utility, and the rest of us call it marriage.

Americans often wonder how this moment could have spawned such extraordinary men as Hamilton and Madison. Part of the answer is that the Revolution produced an insatiable need for thinkers who could generate ideas and wordsmiths who could lucidly expound them. The immediate utility of ideas was an incalculable tonic for the founding generation. The fate of the democratic experiment depended upon political intellectuals who might have been marginalized at other periods.

When a business utilizes resources wisely, it becomes better able to widen the margins between revenues and expenses.

One additional unit of income can do a hundred times as much to the benefit the extreme poor as it can to benefit you or I [earning the typical US wage of $28,000 or ‎£18,000 per year]. [I]t's not often you have two options, one of which is a hundred times better than the other. Imagine a happy hour where you could either buy yourself a beet for $5 or buy someone else a beer for 5¢. If that were the case, we'd probably be pretty generous – next round's on me! But that's effectively the situation we're in all the time. It's like a 99% off sale, or buy one, get ninety-nine free. It might be the most amazing deal you'll see in your life.

Looking back on the fifty years since I first became aware of its flaws, the word that summarizes my feelings about Neoclassical economics today is that it is, as Marx once described the proto-Neoclassical Jean-Baptiste Say, ‘dull’ [...] Its vision of capitalism at its best is a system manifesting the harmony of equilibrium, where everyone is paid their just return (their ‘marginal product’), growth is occurring smoothly at a rate that maximizes social utility through time, and everyone is motivated by consumption – rather than accumulation and power – because, to quote Say, ‘the producers, though they have all of them the air of demanding money for their goods, do in reality demand merchandise for their merchandise’ [...] What a bland picture of the complex, changing world in which we live!

It’s the same situation as gold and gold mining. The marginal cost of gold mining tends to stay near the price of gold. Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange. I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used. Therefore, not having Bitcoin would be the net waste.

The marginal utility of money to any individual, i.e., the marginal utility derivable from the goods that can be obtained with the given quantity of money or that must be surrendered for the required money, presupposes a certain exchange-value of the money; so the latter cannot be derived from the former. 1 Those who have realized the significance of historically-transmitted values in the determination of the objective exchange-value of money will not find great difficulty in escaping from this apparently circular argument.

The richer we get in a consumer society, the more acutely we become aware of how many grades of value--of both leisure and labor--we have climbed. The higher we are on the pyramid, the less likely we are to give up time to simple idleness and to apparently nonproductive pursuits. The joy of listening to the neighborhood finch is easily overshadowed by stereophonic recordings of "Bird Songs of the World," the walk through the park downgraded by preparations for a packaged bird-watching tour into the jungle. It becomes difficult to economize time when all commitments are for the long run. Staffan Linder points out that there is a strong tendency for us to over-commit to the future, so that when the future becomes present, we seem to be conscious all the time of having an acute scarcity, simply because we have committed ourselves to about thirty hours a day instead of twenty-four. In addition to the mere fact that time has competitive uses and high marginal utility in an affluent society, this overcommitment creates a sense of pressure and harriedness.

Before it was usual to acquire goods in the market, not for personal consumption, but simply in order to exchange them again for the goods that were really wanted, each individual commodity was only accredited with that value given by the subjective valuations based on its direct utility. It was not until it became customary to acquire certain goods merely in order to use them as media of exchange that people began to esteem them more highly than before, on account of this possibility of using them in indirect exchange. The individual valued them in the first place because they were useful in the ordinary sense, and then additionally because they could be used as media of exchange. Both sorts of valuation are subject to the law of marginal utility.

In explaining the way that trivial, if diverting, pursuits like Guitar Hero provide an easy alternative to meaningful work, Horning draws on the writing of political theorist Jon Elster. In his 1986 book An Introduction to Karl Marx, Elster used a simple example to illustrate the psychic difference between the hard work of developing talent and the easy work of consuming stuff: Compare playing the piano with eating lamb chops. The first time one practices the piano it is difficult, even painfully so. By contrast, most people enjoy lamb chops the first time they eat them. Over time, however, these patterns are reversed. Playing the piano becomes increasingly more rewarding, whereas the taste for lamb chops becomes satiated and jaded with repeated, frequent consumption. Elster then made a broader point: Activities of self-realization are subject to increasing marginal utility: They become more enjoyable the more one has already engaged in them. Exactly the opposite is true of consumption. To derive sustained pleasure from consumption, diversity is essential. Diversity, on the other hand, is an obstacle to successful self-realization, as it prevents one from getting into the later and more rewarding stages. “Consumerism,” comments Horning, “keeps us well supplied with stuff and seems to enrich our identities by allowing us to become familiar with a wide range of phenomena—a process that the internet has accelerated immeasurably. . . . But this comes at the expense with developing any sense of mastery of anything, eroding over time the sense that mastery is possible, or worth pursuing.” Distraction is the permanent end state of the perfected consumer, not least because distraction is a state that is eminently programmable. To buy a guitar is to open possibilities. To buy Guitar Hero is to close them. A

In fact, the nature of Western systems of indoctrination is typically not understood by dictators, they don’t understand the utility for propaganda purposes of having “critical debate” that incorporates the basic assumptions of the official doctrines, and thereby marginalizes and eliminates authentic and rational critical discussion. Under what’s sometimes been called “brainwashing under freedom,” the critics, or at least, the “responsible critics” make a major contribution to the cause by bounding the debate within certain acceptable limits―that’s why they’re tolerated, and in fact even honored.

Echoing right-wing racist rhetoric, liberal organizations routinely smear "illegitimate," nonpacifist resistance as senseless and the work of irrational "thugs." And yet it is precisely marginalized groups utilizing these tactics--poor women of color defending their right to land and housing; trans* street workers and indigenous peoples fighting back against murder and violence; black and brown struggles against white supremacist violence--that have waged the most powerful and successful uprisings in US history. It is extremely advantageous to the powers that be for these groups to be deterred from the risks of militant self-defense, resistance, or attack. We refuse a politics that infantilizes nonwhite and/or nonmale groups, and believes that the are incapable of fighting for their own liberation, as the old saying goes, by any means necessary. Original pamphlet: Who is Oakland. April 2012. Quoted in: Dangerous Allies. Taking Sides.

This resulted in a model of the macroeconomy as consisting of a single consumer, who lives for ever, consuming the output of the economy, which is a single good produced in a single firm, which he owns and in which he is the only employee, which pays him both profits equivalent to the marginal product of capital and a wage equivalent to the marginal product of labor, to which he decides how much labor to supply by solving a utility function that maximizes his utility over an infinite time horizon, which he rationally expects and therefore correctly predicts. The economy would always be in equilibrium except for the impact of unexpected ‘technology shocks’ that change the firm’s productive capabilities (or his consumption preferences) and thus temporarily cause the single capitalist/worker/consumer to alter his working hours. Any reduction in working hours is a voluntary act, so the representative agent is never involuntarily unemployed, he’s just taking more leisure. And there are no banks, no debt, and indeed no money in this model. You think I’m joking? I wish I was.

If someone publishes an essay, or tells a joke, or performs a play that forwards a problematic idea the U.S. government generally wouldn't try to stop that person from doing so. Even if they could. If the expression doesn't involve national security the government generally doesn't give a shit. But, if enough vocal consumers are personally offended, they can silence that artist just as effectively. They can petition advertisers and marginalize the artist's reception and economically remove that individual from whatever platform he or she happens to utilize simply because there are no expression based platforms that don't have an economic underpinning. It's one of those situations where the practical manifestation is the opposite of the technical intention. As Americans we tend to look down on European countries that impose legal limitations on speech. Yet as long as speakers in those countries stay within the specified boundaries discourse is allowed relatively unfettered, even when it's unpopular. In the U.S., there are absolutely no speech boundaries imposed by the government. So the citizenry creates its own limitations based on the arbitrary values of whichever activist group is most successful at inflicting its worldview upon an economically fragile public sphere. As a consequence, the United States is a safe space for those who want to criticize the government, but a dangerous place for those who want to advance unpopular thoughts about any other subject that could be deemed insulting or discomforting. Some would argue that this trade off is worth it. Time may prove otherwise.

As Peter Drucker observes, “The supply of time is totally inelastic. No matter how high the demand, the supply will not go up. There is no price for it and no marginal utility curve for it. Moreover, time is totally perishable and cannot be stored. Yesterday’s time is gone forever and will never come back. Time is, therefore, always in exceedingly short supply.

By giving the double dose to the more seriously injured person, we bring about a situation in which there is less difference in the degree of suffering felt by the two victims than there would be if we gave one dose to each. Instead of ending up with one person in considerable pain and one in no pain, we end up with two people in slight pain. This is in line with the principle of declining marginal utility, a principle well-known to economists, which states that the more someone has of something, the less she will gain from an additional quantity of it.

Among life's cruelest truths is this one: Wonderful things are especially wonderful the first time they happen, but their wonderfulness wanes with repetition. Just compare the first and last time your child said "Mama" or your partner said "I love you" and you'll know exactly what I mean. When we have an experience _ hearing a particular sonata, making love with a particular person, watching the sun set from a particular window of a particular room on successive occasions, we quickly begin to adapt to it, and the experience yields less pleasure each time. Psychologists call this habituation, economists call it declining marginal utility, and the rest of us call it marriage.

Diminishing marginal utility என்று ஒரு கோட்பாடு உண்டு. ஒரே தடவையில் தொடர்ந்து உண்ணும்போது முதல் ஆப்பிள் வழங்கும் அதே ருசியை மூன்றாவது ஆப்பிள் வழங்காது. எண்ணிக்கை கூடிக்கொண்டே செல்கையில், வெறுப்பாகவும், நஞ்சாகவும்கூட அது எதிர்மறையாகத் திரும்ப வாய்ப்பிருக்கிறது.

Diminishing utility. Sometimes, newly introduced performance metrics will have immediate benefits in discovering poorly performing outliers.5 Having gleaned the low-hanging fruit, there is tendency to expect a continuingly bountiful harvest. The problem is that the metrics continue to get collected from everyone. And soon the marginal costs of assembling and analyzing the metrics exceed the marginal benefits.

Diminishing utility. Sometimes, newly introduced performance metrics will have immediate benefits in discovering poorly performing outliers.5 Having gleaned the low-hanging fruit, there is tendency to expect a continuingly bountiful harvest. The problem is that the metrics continue to get collected from everyone. And soon the marginal costs of assembling and analyzing the metrics exceed the marginal benefits. Rule cascades. In an attempt to staunch the flow of faulty metrics through gaming, cheating, and goal diversion, organizations institute a cascade of rules. Complying with them further slows down the institution’s functioning and diminishes its efficiency.

To fight the patriarchal environment that prevails in the Indian courtrooms, there are women who are making their mark and are utilizing the law and the legal system to make a dent in patriarchy. These courageous women are standing up against the powerful institutionalized structural imbalance and asserting their rights while showing that the Constitution, the law, and the courtrooms do not belong to a handful of judges and lawyers but belong to the people, the litigants, the poor, the marginalized, the women – to the people of the country. The system may be powerful or corrupt but people are more powerful than the system and have the power to smash the loopholes within it.

common error is to suppose that the principle suggests that the wealthier people are, the less important money will be to them. Someone in the grip of that misconception might think it supplies grounds for thinking that the wealthy will be less likely to resist redistribution than Bentham feared. In fact the principle of diminishing marginal utility has no such implication. The principle says that the wealthier you are, the less new utility you will derive from each additional dollar. This suggests that the more money you have, the larger the dollar increments that will be required, at the margin, to increase your utility. The better analogy is to a heroin addict who needs increasing amounts of the drug to achieve the same “fix” : the more you have, the more you want.

At times a particular method may stand out as the most appropriate. Net present value would be most applicable, for example, in valuing a high-return business with stable cash flows such as a consumer-products company; its liquidation value would be far too low. Similarly, a business with regulated rates of return on assets such as a utility might best be valued using NPV analysis. Liquidation analysis is probably the most appropriate method for valuing an unprofitable business whose stock trades well below book value. A closed-end fund or other company that owns only marketable securities should be valued by the stock market method; no other makes sense.

of climate change. What was needed was a massive nudge in the right direction. In the past, the stick of regulation and the rod of taxation were the methods that environmentalists believed could break the fossil fuel economy. But the Inflation Reduction Act doesn’t rely on such punitive tactics, because Manchin culled them from the bill. Instead, it imagined that the United States could become the global leader of a booming climate economy, if the government provided tax credits and subsidies, a lucrative set of incentives. There was a cost associated with the bill. By the Congressional Budget Office’s score, it offered $386 billion in tax credits to encourage the production of wind turbines, solar panels, geothermal plants, and battery storage. Tax credits would reduce the cost of electric vehicles so that they would become the car of choice for Middle America. But $386 billion was an estimate, not a price tag, since the legislation didn’t cap the amount of money available in tax credits. If utilities wanted to build more wind turbines or if demand for electric vehicles surged, the government would keep spending. When Credit Suisse studied the program, it estimated that so many businesses and consumers will avail themselves of the tax credits that the government could spend nearly $800 billion. If Credit Suisse is correct, then the tax credits will unleash $1.7 trillion in private sector spending on green technologies. Within six years, solar and wind energy produced by the US will be the cheapest in the world. Alternative energies will cross a threshold: it will become financially irresponsible not to use them. Even though Joe Biden played a negligible role in the final negotiations, the Inflation Reduction Act exudes his preferences. He romanticizes the idea of factories building stuff. It is a vision of the Goliath of American manufacturing, seemingly moribund, sprung back to life. At the same time that the legislation helps to stall climate change, it allows the United States to dominate the industries of the future. This was a bill that, in the end, climate activists and a broad swath of industry could love. Indeed, strikingly few business lobbies, other than finance and pharma, tried to stymie the bill in its final stages. It was a far cry from the death struggles over energy legislation in the Clinton and Obama administrations, when industry scuppered transformational legislation. The Inflation Reduction Act will allow the United States to prevent its own decline. And not just economic decline. Without such a meaningful program, the United States would have had no standing to prod other countries to respond more aggressively to climate change. It would have been a marginal player in shaping the response to the planet’s greatest challenge. The bill was an investment in moral authority.

In retrospect, The General Theory would set the intellectual agenda for Friedman’s entire career, but when it appeared, he barely noticed. As Keynes’s ideas were making landfall in American universities, Friedman offered a course through the Columbia University extension school that was a throwback to the early 1930s. Focused on individual demand curves, individual marginal utility, and individual economic decision-making, Friedman’s course, Structure of Neo-classical Economics, made no mention of business cycles, national income, or current economic conditions. Drawing on the approach pioneered by Knight and Simons, it placed the question of “how free enterprise system solves economic problem” front and center.45 At the same time, Friedman did offer an implicit critique of the fiscal revolution, particularly Hansen’s concept of secular stagnation. Picking up a theme from Knight, Friedman told his class, “Once wants are satisfied, new wants are going to be formed; the process of want formation is part of the basic drive.”46 There were two critical implications. First was that perpetual wanting would keep economies always in motion: “Impossibility of completely satisfying all wants. If the greatest want is the desire for new wants … the notion of satiety is silly.” It was more than a philosophical point. Not only was it impossible for the economy to stagnate, but it would be impossible to design a government program that would adequately satisfy wants, which tended to continually increase. Friedman drew out the second implication in another comment. “Attitude toward all policies will be affected by our ideas concerning wants,” he argued.47 In a letter to Arthur Burns, he was more direct. Reflecting on a road trip to visit Rose’s family, he wrote, “The whole West, particularly California, and more particularly Southern California, gives you the feeling that the frontier is not yet gone and makes you feel like telling the stagnationites to come out and take a look.”48 Although he worked for the New Deal, Friedman was not a New Dealer. Nor was he a Keynesian. He thoroughly rejected the ideas that would most profoundly shape economics in the years ahead.

In general, a true science is open to change and counter-examples, is intent on discovering new ideas even if they contradict currently accepted ones, is open to and encourages criticism and alternative explanations, focuses on replication of results, is humble in its findings and generalizations, and utilizes objective measurement. Conversely, a pseudoscience or faith-based ideology relies on fixed ideas and marginalization of opposition, selectively attends to favorable “discoveries” while ignoring alternative explanations, suppresses criticism and relies on personal attacks and claims of conspiracy, amasses non-verifiable or replicable results, exaggerates claims, and relies on subjective measurements and tautological (circular) reasoning. The mental health field certainly has no shortage of problems concerning conflicts of interest, suppression of dissent, lack of replication, and exaggerated claims.

Rich” ... is the point at which the marginal utility of an additional dollar for personal consumption and investment is effectively zero. I think that this is a good definition for a couple of reasons: One, because people have different preferences, that point comes at very different wealth and income levels for different people, which is why there are so many people of relatively modest means who dedicate some non-trivial portion of their incomes to charity rather than to their own personal desires. Second, it accounts for the fact that while the value of an additional dollar for personal consumption may be zero, the value of deciding for one’s self how any additional dollars are to be disposed of is not zero. That is why there are so many people who work diligently to minimize their tax bills while giving away millions or billions of dollars to charitable ends. The position is not, contra the protestations of our progressive friends, an inconsistent one.

This suggests that the more money you have, the larger the dollar increments that will be required, at the margin, to increase your utility.

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Activities of self-realization are subject to increasing marginal utility:

The eugenics roots of minimum wage laws. Excerpt from *Principles of Economics*(1911) by Frank Taussig: "We have not reached the stage where we can proceed to chloroform them once and for all; but at least they can be segregated, shut up in refuges and asylums, and prevented from propagating their kind.... What are the possibilities of employing at the prescribed wages all the healthy able-bodied who apply? The persons affected by such legislation would be those in the lowest economic and social group. The wages at which they can find employment depend on the prices at which their product will sell in the market; or in the technical language of modern economics, on the marginal utility of their services. All those whose additional product would so depress prices that the minimum could no longer be paid by employers would have to go without employment. It might be practicable to prevent employers from paying any one less than the minimum; though the power of law must be very strong indeed, and very rigidly exercised, in order to prevent the making of bargains which are welcome to both bargainers.

When we have an experience—hearing a particular sonata, making love with a particular person, watching the sun set from a particular window of a particular room—on successive occasions, we quickly begin to adapt to it, and the experience yields less pleasure each time. Psychologists call this habituation, economists call it declining marginal utility, and the rest of us call it marriage.

Utilizing both of the heart and the mind is crucial for that the absence of one of them will cause man to turn into an animal, however, if it were the heart that which were disabled then the conversion gets accelerated. And with the absence of the mind, man is given a window of time to revert the process in case he/she awakens; a free-fall margin for any prospective reaction.

but the truth is that comparing what private equity firms used to be—and where the perception of private equity still sits in many quarters—to what they are now is like comparing a Motorola cellphone from the 1990s to the latest iPhone. There’s a world of differences; it’s not even close. For pension funds and other investors in private equity funds, the firms they back gives them access to investment opportunities they can’t find or execute themselves. What’s more, they get consistent investment returns out of these opportunities, whether they include leveraged buyouts, credit investments, infrastructure assets, essential utilities, real estate transactions, technology deals, natural resources projects, banks, insurance companies, or life science opportunities. They can buy companies, carve out businesses, build up companies through acquisitions and organic growth, spin off businesses, take companies private from the public market, buy businesses from other funds they manage, draw margin loans to finance dividends, and refinance the capital structure pre-exit. And more besides.

An income tax cannot be shifted to anyone else. The taxpayer himself bears the burden. He earns profits from entrepreneurial activity, interest from time preference, and other income from marginal productivity, and none can be increased to cover the tax. Income taxation reduces every taxpayer’s money income and real income, and hence his standard of living. His income from working is more expensive, and leisure cheaper, so that he will tend to work less. Everyone’s standard of living in the form of exchangeable goods will decline. In rebuttal, much has been made of the fact that every man’s marginal utility of money rises as his money assets fall and, therefore, that there may be a rise in the marginal utility of the reduced income obtainable from his current expenditure of labor. It is true, in other words, that the same labor now earns every man less money, but this very reduction in money income may also raise the marginal utility of a unit of money to the extent that the marginal utility of his total income will be raised, and he will be induced to work harder as a result of the income tax. This may very well be true in some cases, and there is nothing mysterious or contrary to economic analysis in such an event. However, it is hardly a blessing for the man or for society. For, if more work is expended, leisure is lost, and people’s standards of living are lower because of this coerced loss.

Outer happiness has Diminishing Marginal Utility; the more it grows, the satisfaction decreases. Resort to inner happiness.

Mises and Hayek Beginning with Ludwig von Mises and F.A. Hayek, the links between liberalism and the Austrian School become intense and pervasive, since these two scholars were themselves at once the outstanding Austrian economists and the most distinguished liberal thinkers of the twentieth century. The American academic world, however, deemed none of this sufficient for them to be accorded the kind of positions to which they were clearly entitled.50 They, and in particular Mises, were also responsible to a greater degree than is generally appreciated for the upsurge of the free-market philosophy in the second half of the century.51 But since the views of the two great men are so often amalgamated, it should be emphasized that not only did they differ to an extent on economic theory (Salerno 1993; see also Kirzner 1992c: 119–36), but, more pertinently to the theme of this essay, they exhibited a sharp distinction in the degree of their liberalism. What follows refers to Hayek’s political attitudes, not to his contributions to economic science. These were highly significant and valuable in the earlier part of his career, as he together with Mises built the theoretical foundations of the modern Austrian school.52 While Mises was a staunch advocate of the laissez-faire market economy (Mises 1978a; Rothbard 1988: 40; Hoppe 1993; Klein 1999), Hayek was always more open to what he saw as the useful possibilities of state action. He had been a student of Wieser’s, and, as he conceded, he was “attracted to him . . . because unlike most of the other members of the Austrian School [Wieser] had a good deal of sympathy with [the] mild Fabian Socialism to which I was inclined as a young man. He in fact prided himself that his theory of marginal utility had provided the basis of progressive taxation . . .” (Hayek 1983: 17). Early in his career, Hayek stated that the lessons of economics will create a presumption against state interference, adding: However, this by no means does away with the positive part of the economist’s task, the delimitation of the field within which collective action is not only unobjectionable but actually a useful means of obtaining the desired ends. . .the classical writers very much neglected the positive part of the task and thereby allowed the impression to gain ground that laissez-faire was their ultimate and only conclusion . . . (1933: 133–34) This remained Hayek’s standpoint throughout his long and richly productive scholarly life. It is regrettable, but typical, that a great many confused commentators continue to characterize him as a advocate of laissez-faire.53 In fact, he

The winners of any game are the people who are so addicted they continue playing even as the marginal utility from winning declines.

In the last chapter of the /General Theory, /quoted above,^35 he [Keynes] falls into the fallacy of supposing that there is some kind of /neutral /policy that a Government can pursue, to maintain effective demand in general, without having any influence upon any particular demand for anything. The Government has to undertake “the task of adjusting to one another the propensity to consume and the inducement to invest” but everything else is best left to “the free play of economic forces.”^36 This is a metaphysical conception as unseizable as /abstract labour /or /total utility. /What is a policy which /merely /adjusts the demand for investable resources to the supply? To increase effective demand when it threatens to flag, various means can be used: to reduce taxation or to shift the burden from those most likely to increase their consumption to those most likely to reduce their savings; to foster competition so as to reduce profit margins; to increase subsidies or outlays on social services — all means which tend to reduce inequalities in consumption. Or Government expenditure on investment can be increased, directly or through nationalized industries, or reductions in taxation and credit policy can be used to encourage private investment. Contrariwise, when effective demand seems excessive, taxes to discourage consumption, credit restriction and reduced Government expenditure can be brought into play. And all this has to be worked out so as to preserve the balance of trade at some level or other, as well as to preserve employment. What is a /neutral /policy? What mixture of these means is it that leaves private enterprise unaffected in content and acts only on the quantity? [pp. 89-90]

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an extra hundred pounds is worth a lot more to a poor person than to a rich one because the poor person’s need is far greater. This idea, which economists today refer to as the diminishing marginal utility of income,

As the magnitude of the gain increases, the amount of additional satisfaction people get out of each additional unit decreases. The shape of this curve conforms to what economists have long talked about as the “law of diminishing marginal utility.” As the rich get richer, each additional unit of wealth satisfies them less.

The price of money, like other prices, is determined in the last resort by the subjective valuations of buyers and sellers. But, as has been said already, the subjective use-value of money, which coincides with its subjective exchange-value, is nothing but the anticipated use-value of the things that are to be bought with it. The subjective value of money must be measured by the marginal utility of the goods for which the money can be exchanged.1

A common pattern observed in both academia and industry engineering teams is their propensity to optimize for tactical wins over strategic initiatives. While brilliant minds worry about achieving marginal improvements in competitive benchmarks, the nitty-gritty issues of productizing and operationalizing AI for real-world use cases are often ignored. Who cares if you can solve a problem with 99 percent accuracy if no one needs that problem solved? What’s the utility of a tool whose purpose is so arcane that no one is sure what problem it was trying to solve in the first place?

As an ideal of intellectual inquiry and a strategy for the advancement of knowledge, the scientific method is essentially a monument to the utility of error. Most of us gravitate toward trying to verify our beliefs, to the extent that we bother investigating their validity at all. But scientists gravitate toward falsification; as a community if not as individuals, they seek to disprove their beliefs. Thus, the defining feature of a hypothesis is that it has the potential to be proven wrong (which is why it must be both testable and tested), and the defining feature of a theory is that it hasn’t been proven wrong yet. But the important part is that it can be—no matter how much evidence appears to confirm it, no matter how many experts endorse it, no matter how much popular support it enjoys. In fact, not only can any given theory be proven wrong; as we saw in the last chapter, sooner or later, it probably will be. And when it is, the occasion will mark the success of science, not its failure. This was the pivotal insight of the Scientific Revolution: that the advancement of knowledge depends on current theories collapsing in the face of new insights and discoveries.

Tm merely trying to do my job. God, Scholscher, how can we talk of progress when we’re still destroying, all around us, life’s most beautiful and noble manifestations? Our artists, our architects, our scientists, our poets, sweat blood to make life more beautiful, and at the same time we force our way into the last forests left to us, with our finger on the trigger of an automatic weapon, and we poison the oceans and the very air we breathe with our atomic devices. Perhaps this madman Morel will succeed in rousing public opinion. By God, I feel I could join him in his maquis. We’ve got to resist this degradation. Are we no longer capable of respecting nature, or defending a living beauty that has no earning power, no utility, no object except to let itself be seen from time to time? Liberty, too, is a natural splendor on its way to becoming extinct. I’m speaking for myself to get it off my chest, because I haven't the courage to act like Morel. It’s absolutely essential that man should manage to preserve something other than what helps to make soles for shoes or sewing machines, that he should leave a margin, a sanctuary, where some of life’s beauty can take refuge and where he himself can feel safe from his own cleverness and folly. Only then will it be possible to begin talking of a civilization. A utilitarian civilization will always go on to its logical conclusion-forced labor camps. We must leave a margin. And besides, let me tell you . . . There's nothing to be so proud of, is there?

As you might expect, different sectors flourish whiles others languish in the same economic circumstances. For example, when the economy slows down, the technology sector may decline as the utilities sector gains ground.

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