Philip Pilkington — Joan Robinson’s Critique of Marginal Utility Theory

Contains a link to a free download of Joan Robinson's Economic Philosophy, a must-read for those interested in Post Keynesianism or philosophy of economics. Robinson was an exceptionally clear thinker and pulled no punches. Phil is continuing in that tradition and promises to be one of the bright lights of his generation, too.

In her excellent book Economic Philosophy (available as a PDF here) Joan Robinson undertakes an extensive discussion of marginal utility theory. Here I will be more so interested in her technical criticisms. But before going into these it should be noted that Robinson characterises the impetus of marginal utility theory in a way many might find unusual.

Basically, she claims that it is a revolutionary leftist doctrine. The reason she makes this claim is because if we apply the law of diminishing returns to income it soon becomes clear that radical egalitarianism — indeed, some sort of socialism or communism — is the best manner in which to maximise the utility of society as a whole. Robinson points out that the early marginalists — many of whom, like Walras, were socialists — recognised this full well....

Fixing the Economists
Joan Robinson’s Critique of Marginal Utility Theory
Philip Pilkington

From the point of view of philosophy, there are major issues with the utility calculus proposed by Jeremy Bentham and largely taken over by economists following J. S. Mill and developed into the axioms of rationality and utility maximization that drive conventional economics today.

First is that it equates happiness and unhappiness with pleasure and pain. Aristotle dispensed with at view in Book One of Nichomachean Ethics as confusing a part with the whole. There are also good arguments elsewhere that pain and pleasure are accidental rather than essential with respect to happiness. The pleasure-pain view based on material satisfaction-dissatisfaction is grounded in the materialistic reductionism characteristic of scientism.

Secondly, the theory holds that quality can be accurately quantified. This is a huge assumption with no substantiation and with good reason to be skeptical of. It is an aspect of the "hard problem" in explaining consciousness scientifically, unless one dismisses it as a pseudo-problem.