Professor,
Thank you for all of your substantive and informative answers. Tom could not have picked a better person to teach this class. I’m sure that one day, people will be citing Herbener alongside Mises, Rothbard, Hayek, Salerno, etc.
I’m wondering if you can tell me the Austrian take on the theory of the Declining Marginal Utility of Money, by which it is suggested that successive additions to one’s income produce, on average, less happiness or welfare then did earlier additions.
My business ethics textbook suggests that this is a fact,” Richard Brandt, who says that “If we double a persons income, he will spend the extra money on items he wants less, and which will give less enjoyment than will the original income. The more one’s income, the fewer preferred items one buys and the more preferred items one already has. On the whole, then, when the necessities of life have been purchased and the individual is spending on luxury items, he is buying items which gives less enjoyment.”
I can see this being used to support Marxist redistribution, and it doesn’t seem to me to be very scientific. Perhaps luxury items bring one more pleasure than basic items, like toothpaste etc.
Do Austrians accept this, and if not, which of them wrote refutations?
Thank you again
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