Reply To: Basics: Value scale at p. 123 in MAS


The value scale Rothbard uses on p. 123 of MES refers to a seller of horses. In other words, Johnson has four horses and no barrels of fish. Rothbard indicates this by putting what a person does not have in parenthesis. The first horse, then, for Johnson is the least-valuable use he has for a horse. The first horse sold is at the bottom of his value scale. His supply of horses at a price of 81 barrels of fish (in Rothbard’s chart) would be 1 and at a price of 88 barrels of fish would be 2 and so on.

Rothbard goes on to develop the value scale for a buyer, Smith, on p. 125. On this scale horses are in parenthesis and barrels of fish are not. The first horse is the most valued use to which Smith would put a horse. The first horse bought is at the top of the value scale. He’s willing to buy the first horse at a price of 100 barrels of fish and at a price of 94 barrels of fish he willing to buy 2 horses and so on.

In Rothbard’s example, fish is the analog to money in developing the demand for and supply of a good from preference ranks. It isn’t necessary to determine the preference rank use for units of money (barrels of fish). To the contrary, the second law of utility, that a person prefers a large stock of a good to a smaller stock, suffices for constructing the demand for horses and the supply of horses in terms of fish (or money).