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 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.

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