| Few students of economics, even in the elementary course, now escape without a warning against the error of intertemporal comparisons of the utility from given acts of consumption. Yesterday the man with a minimal but increasing real income was reaping the satisfactions which came from a decent diet and a roof that no longer leaked water on his face. Today, after a large increase in his income, he has extended his consumption to include suede shoes and a weekly visit to the races. But to say that his satisfactions from these latter amenities and recreations are less than from the additional calories and the freedom from rain is wholly improper. Things have changed; he is a different man; there is no real standard for comparison. That, as of a given time, an individual will derive lesser satisfactions from the marginal increments to a given stock of goods, and accordingly cannot be induced to pay as much for them, is conceded. But this tells us nothing of the satisfactions from such additional goods, and more particularly from different goods, when they are acquired at a later time. |