Praxeology - Episode 10 - The Law of Diminishing Marginal Utility

[Jfisher5820]

These videos are great, you are really helping me understand Paxeology, but I am still struggling with the term "marginal".

I get Utility, and I understand why utility diminishes as the number of the good is increased in ownership.

But I still struggle with what you say "is on the margin"

Any good answers please e mail jfisher@shire.com

Jim

[jeffiek]

@Jfisher5820 Allow me a crude example - alcohol. Some people will drink no matter what the price is ( alcoholics ), some will never drink ( religious reasons ). These are the black and white end points, between which are continual shades of grey. In the middle some where are people which will change the amount they drink depending on price.

These people are "on the margin".

[infoseekrs]

praxgirl??? are you single?



[praxgirl]

@infoseekrs yup

[th86stone]

6:02 all that to TRY to debunk supply & demand, not buying it

[liberaustrian]

@th86stone She is not trying to debunk supply and demand. She is simply showing how supply and demand does not decide a mans decisions; marginal utility does. Each person is willing to pay a certain amount for something based the the marginal utility of that item, not based on the supply. So, while Supply and demand may set the universal price, it does not set the price any given individual is willing to pay. 

[HeyItzMeDawg]

@th86stone ...Wait, what?

Marginal utility is entirely consistent with Supply and Demand. If you think that MU tries to debunk S&D, you have a very naive and/or mistaken view of Supply and Demand.

[farsiiiii]

thank u beautiful praxi !

India

[farsiiiii]

thank u beautiful praxi !

[LibertarianChristian]

Whoa, I just realised my human action of preference is why i'm watching this video.

(currently ranking the utility of watching this video greater than sleep)

Whoa it even applies to me writing this comment!

mind = blown.

[grimslider75]

shouldn't the logic of praxeology encompass not only the natural sciences, but what's learned from all other disciplines as well since they all point in the direction of what human action is and the context?

[Septeus7]

Your so called "subjective" cannot be defined without the objective physical effects of the universes reaction to you actions and thus the subject must exist within the objective and vice visa.. Read Comte and Roger Bacon on the scientific method. You can also read Cusa,Liebniz, Guass, and Riemann. I really suggest Riemann as he formally refuted all logical systems based on axioms in Über die Hypothesen welche der Geometrie zu Grunde liegen.

The physical sciences have refuted Economics.

[sidspop]

@Septeus7 You're trying too hard.

[WorBlux]

@Septeus7 Yet the physical science has not explanation of economics, nothing that explains without the language of intent and purpose. We don't have any standard of measure that can be used. As far as we can comprehend action is not a physical process. And if we were to comprehend it as such, the explanation would be alien to us until translated into the language of methodological subjectivity (intent and purpose), and as such is a valid intermediate representation.

[Septeus7]

The Law of Unity hold true. There is one universe and I exist and act within it and the universe acts and and exists containing my action and mind. I act on it and it acts on me equal and opposite in unity.

The Austrian school denies the first law of motion and you dare to call yourself a science. It's not a science it's a pile of lies and deception and sophistry.

Your Brain will not allow any animal to reject the physical reactions that their actions cause and you cannot negate the effect.

[Audiofalcon7]

@Septeus7 The Austrian school does not fucking deny the first law of motion. What the fuck are you talking about? The physical sciences have refuted nothing. We all know that the neurons in your head and the environment can effect what you prefer and what you don't prefer. You're a fucking retard, however, to assume that consciousness has been at all explained by the physical sciences. It has not, and there is not a single theory that has been 100% accepted. At all.

[Audiofalcon7]

@Septeus7 Not one Austrian will deny any of the natural sciences. None of the natural sciences have ever refuted logic whatsoever. Reimann did not do anything substantial to refute all logical systems based on axioms, either. He added onto the systems and fundamentals. The physical sciences has refuted nothing, and you're a fool for being so ignorant as to believe it has.

[Septeus7]

If all valuation is subjective then valuation the effectiveness of ends is also subjective and any means could produce any ends in my valuation which is not making any valuation at all by definition. You just eliminated my freedom to make choices about reality that I need to survive.

Value is both subjective and objective because the human being is unity with physical world and his mind. The Objective doesn't exist without subject observer and the subjective observer without the objective.

[Septeus7]

So I value something without regard to any real world effect it may have based on the technological utility simply because he believes it. The Green Lantern principle of value. It has value by the power of my Will! Value manifest like objects from my magically green Ring!

If I don't value a objective technological use then I can't have human action because I wouldn't be able to judge if any means is better than any except objectively. (continued).

[JesseForgione]

@Septeus7

If you're going to offer criticism of something, you might want to find out what it is first, so you won't make a fool of yourself by writing a lot of irrelevant nonsense.

[RuddODragonFear]

I predict that praxgirl will overtake Stef (stefbot) in average views per video very soon. Stef just can't muster the movement of the shoulder and the surreptitious wink. Sorry, Stef! :D

This comment has been an example of human action.

[Momolovesliberty]

You said that prices are set by goaling seeking choices of individuals, not mechanically by supply and demand. But isn't that sort of the same thing? The goal of the supplier in the market is to sell his product, and the goal of the person with the demand is to get rid of his uneasiness by buying a product from a supplier. In the market, their immediate goals meet up and the price is set above the seller's reservation price and below the buyer's reservation price.

[WorBlux]

@Momolovesliberty

The reservation price is what happens when a seller does not want to sell any more, and when the buyer does not want to buy; but is an abstraction only . The buyer and seller don't actually reserve a price, they rank things in the order that they are valued which may at any given moment be re-ordered. Prices aren't a measurement, but are a ratio of what was traded for what just a moment ago; all prices are historical data. Every moment the balance is forged anew.

[angelmarine1292]

Smart girl.

[TREACLE97]

Good video! - you forgot 'artificial scarcity' - eg. as applied to diamonds...diamonds are more abundant than coal but sell for more because they are artificially made scarce by the diamond mine operators (monopoly syndicate) - oil is the same and most things that are mined and retailed - another e.g. new products like phones are made scarce otherwise someone might buy the whole stock up and retail them at twice the price - if you had a trillion diamonds would you ebay them as one lot?

[CleverDjembe]

wow, horizontal pink stripes really suit you, beautiful woman chick girl <333333

[grimslider75]

Another comment...

is there any use for logic in an illogical world?

[Audiofalcon7]

@grimslider75 What do you mean by "illogical world"?

[grimslider75]

I guess I'm human and can't help but find "praxgirl" attractive. At the same time, since I've made a false belief that states "if a person is very attractive, they are more likely to become vain and hence unintelligent", I find this video not only aesthetically favourable, but favourable relative to how I perceive "praxgirl's" attractiveness is compared to her apparent intelligence.

[grimslider75]

Doesn't goal seeking rely on many factors? And besides, humans are not logical and it isn't logical to present the idea that humans act according to their preference only. What if they make a decision which conflicts with their preference? I don't think that The Law of Diminishing Marginal Utility explains everything since it doesn't rely on inductive logic and science.

I say everything with doubt of my certainty, so point me to my errors if any.

[rustyrusky]

@grimslider75 Praxeology doesn't make any statement about the soundness of someones conclusions.

The Law of Diminishing Marginal Utility ist logically deduced from the the axiom of action: Achieving ends through means. The conclusion is logically sound, therefore what you should be asking is whenever the axiom is true or false.

Praxeology is like mathmatics: By abstracting the world we live in to the bare bones (axioms) we can build a system that, if logically sound, is necessary true.

[grimslider75]

@rustyrusky

thanks, I guess I wasn't thinking in terms of logic....

[gergenheimer]

@grimslider75 According to the tenets of praxeology, it is not possible to make a decision that conflicts with your preference, because your actual preference is demonstrated by your actions. For example, I may say repeatedly that I prefer Heineken to Bud Light. However, if I always end up buying Bud Light because it is cheaper, I am demonstrating that I actually prefer the cheapness of Bud Light over the taste of Heineken.

[WorBlux]

@grimslider75

Preference is something evidenced in the expression of action.

A person might say he has some preference, but never acts towards it, then it means he has some other more urgently felt preference which is in conflict for resources.

[stauguastine]

Great video Praxgirl. The law of diminishing marginal utility explains why government social programs that address drug/alcohol addiction never work and actually increase the drug/alcohol problem in our society. As long as the government meets the basic human needs of addicts food, water, clothes, and housing; then the addict is free to pursue other behaviors, getting high, rather than taking "action" to meet those needs themselves.

[CeltoSaxonKnight]

You have fallen into the most primitive error of loving your own verbosity. If you actually knew anything as confidently as you express then whence the problems of the world? Luckily I realise all you want is a few fans in adoration of you – which I am sure you will get – thus enjoy...

[gergenheimer]

@CeltoSaxonKnight Do you have a point to make? An argument to refute the theory of diminishing marginal utility? You question praxgirl's motives, but provide no evidence to counter her argument, which is a restatement of one of the foundational principles of economic science.

[CeltoSaxonKnight]

@gergenheimer

I can make whatever comment I like. Have a nice day.

[gergenheimer]

@CeltoSaxonKnight Yes, feel free to make whatever comments you like - I'm a Libertarian, so I fully support your right to make pointless comments in a public forum.

[CeltoSaxonKnight]

@gergenheimer

As I don't yours...

[Audiofalcon7]

@CeltoSaxonKnight ....the fuck are you blabbering about?

[CeltoSaxonKnight]

@Audiofalcon7

Are you talking to me or the twirly-girly in the video? If the twirly-girly then I agree. If, like anyone else, the twirly-girly knew anything worth knowing then the world would be better than it is... No? If me, then

[Audiofalcon7]

@CeltoSaxonKnight Then what? Chitter-chatter away? You honestly don't think this isn't worth learning, when millions are suffering without a job, where socialistic policies have caused mass suffering all over Central America, where the only way our standard of living has increased with the application of the material this woman is teaching? You must be the worst fucking troll I have ever seen.

[CeltoSaxonKnight]

@Audiofalcon7

1) Listen there is no science of the behaviour of human beings... Though if there were you would watch the first part of the series & ask yourself why this Twirly is beset in a push up bra & red lipstick! The pneumatic thrust of the in & out focussing of the camera, fake smiles... How much more obvious could it be? She has nothing of worth for anyone – if she did then please actually answer the question – why is the world the way it is + not better?

(cont'd)

[Audiofalcon7]

@CeltoSaxonKnight Hah, you have got to be the biggest troll I've seen in a while. If I wanted to explain your post on economic terms, it'll be simple: You desire to speak negatively upon this video and you used your computer, time, energy, and other things to do so. None of this is reductionist, by the way; it's an objective analysis of costs and how money, interest, markets, etc. are formulated. It's purely theoretical and NOT reductionist, and in no way has anything to do with psychology.

[Audiofalcon7]

@CeltoSaxonKnight You rebuke nothing with ethics because ethics is a non-sequitur to economic theories and analysis. Economics does not have any say in ethics - only in objectively analyzing what the costs per action may be, and whether the costs are effective and worthwhile or not if that is the end they want to achieve. It's a means-based analysis and CRUCIAL in understanding market formations and how society organizes itself and not goes off killing each other.

[Audiofalcon7]

@CeltoSaxonKnight It is also not in any way materialist - it calls for methodological dualism, and you CAN arrive at that materialistically (as Hayek did), philosophically, (as Mises did), or even apply God (as I believe Bastiat did a few times). It's not materialistic, but deductive and calls for a holistic approach rather than a pure reductive approach. If it was reductive, we'd speak of neurons, but neurons does not explain cost benefits at all, even if we could. It'll just explain ends.

[CeltoSaxonKnight]

@Audiofalcon7 Methodological dualism? Yes.. Sure, but all methodology is dualistic. That is implied in the notion of method, ie one thing acting upon another! Yet this is not ontological dualism which may or may not deny materialism. Nor is dualism the opposite of materialism.

Most of what you say doesn't apply to the twirly, who expounded praxeology (which is Marxist in base) as being economic reductionist in her 1st video.

Oh by the way any science of anything must be materialistic.

[Audiofalcon7]

@CeltoSaxonKnight Did you...honestly call praxeology Marxist?...I'm sorry, I would love to reply to everything else...but...what?...

[CeltoSaxonKnight]

@Audiofalcon7

OK admittedly I jumped the gun, clearly not understanding this subject to any credible degree I also conflated the girl's rhetoric conceptually with Marxism via 'perceived' economism. I've actually done some reading on the subject, and whilst I think at heart my objections were intuitively sound, they were also somewhat addled as a coherent criticism.

[Audiofalcon7]

@CeltoSaxonKnight I will be happy to discuss your criticism and concerns with this in a private message. Just drop me one, I'll be happy to discuss everything with PDF books and everything. I've been studying Austrian Economics for many years now. I've been through the ringer of doubts and criticisms via psychology and natural sciences to know where AE lies and why it's 100% important to know.

[CeltoSaxonKnight]

@Audiofalcon7

Thank you – that's jolly decent of you! Though I have an enormous reading pile at the moment so if I could be so bad mannered to ask merely for the best introductory PDF you may have to this topic that would be very fine... Thank you!

[grimslider75]

@CeltoSaxonKnight

I don't want to attack you by undermining your ideas because they are indeed YOURs, but, why would you say that anything scientific is materialistic? My point is that since science arose about from "natural philosophy" and philosophy itself if not materialistic and neither are thoughts, then science cannot be fundamentally materialistic.

As for your other claims, you seem to be trolling against materialism and the capacity for scientific meaning in action

[CeltoSaxonKnight]

@grimslider75

Thank you for that: the compliment of individualism being a dagger in my back! LOL.

You make good points. Yes natural science evolved from natural philosophy... My point is the success of the scientific method in natural science pertains mainly to that which we would describe as material: matter, energy, forces... There has been no reasonable science of mind, just a denial of it. No?

Trolling? No.

[grimslider75]

How far can a human interview their own thoughts?

Material is immaterial since all ideas are composed of thoughts grown from the beds of perception. In other terms, The mental associations made within the brain are born of our senses, but our senses do not prove the existence of what we sense, they only give us clues.

While it all seems like materialism, it is only a label, just like any other one, not to be taken seriously when speaking of its importance.

[CeltoSaxonKnight]

@grimslider75

That is the best response I've ever got to this or any similar question. Though it is not a scientific response, perhaps you will agree? Regardless there is no science to address this type of reasoning – is there? Judging on this basis I guess you are not a scientist? Though of course you could be, though probability suggests not... Still this is not science.

[CeltoSaxonKnight]

@Audiofalcon7

2) These videos are sheer & unadulterated nonsense - pure materialist, economic reductionist pap that is instantly rebuked by any ethical or even friendly notion. They will of course appeal muchly to the slave of the current leftist materialist weltanschauung. Yet here's the challenge to the soulless twirly or to you. Explain my actions in criticising her & this video in economic terms? And please if you respond please answer my simple questions...

[HGLuter]

Understanding this concept explains many fallacies of the approaches taken by the US government, and why socialism/communism/fascism does not work.

[Lightrider4444]

If it is a man's ignorance that leads to improper values and therefore inefficient choices of utility and therefor resource efficiency, then would you agree with the Venus Project that a relevant education for all people would allow for access abundance in the form of a resource based economy?

[timonViejo]

@Lightrider4444

You mean public education? Subtracting some people's resources to pay teachers to teach other people?

Also, I still don't know what a "relevant" education is. My religious teachers didn't think Nietsche was "relevant", but I found him more "relevant" than their saints.

[RKAddict101]

@Lightrider4444 Yes, but education is subjective is well. I would find that educating people in schools that the two atomic bombs were necessary to end WWII is terribly wasteful and a negative on society because I believe it not to be true. Therefore, it would not necessarily be true that a man's ignorance always leads to improper values. Perhaps man's ignorance could lead to proper values. But this is not something that one human being could necessarily decide for another.

[dirtbagstatus]

@Lightrider4444 Perhaps,but a more interesting question(to me of course)would be,how you expect man to not try and dominate said resource based economy. Will you create the new resource based man that will only ask for what he feel he needs and work extra hard to meet the needs of others? We don't all have the same level of needs or the same abilities. That being said,how is your system not explained as "from each according to his ability to each according to his needs"?

[dirtbagstatus]

@dirtbagstatus sorry to get off the topic of praxeology on to issues that have been discussed in further detail in other videos.

[gergenheimer]

@Lightrider4444 in supposing that someone might have "improper values", you are using external, subjective criteria to judge the subjective valuations of one individual. This is not logical. Likewise, the idea of someone making "inefficient choices" rests on an arbitrary definition of what an "efficient" use of resources is - there is no objective way to define what the most efficient use of a given set of resources is, this can only be assessed by an individual based on his/her values.

[Audiofalcon7]

@gergenheimer Efficiency is not arbitrary. If my end is to burn wood, gasoline and a match may be the most efficient means of doing it. That is, it requires the least amount of labor and time. Efficiency is calculated by how well the means can reach the end - it's easier for something to happen in X fashion than in Y fashion. Nobody is saying there are "improper values" - value is solely subjective. One may not want to do it in X fashion because of their values - fine; efficiency's still there.

[gergenheimer]

@Audiofalcon7 Blanket definitions of efficiency ARE arbitrary. Your example only holds true in a static choice between "A" and "B", with no consideration of future / alternate events. Suppose my end is to burn wood, and I have gasoline and a match, but I know that I need the gasoline for my car to get me to work. Is the most "efficient" use of the gas to burn the wood (my immediate end), or to save it for my car? You can't objectively say what the most efficient use of these resources is.

[Audiofalcon7]

@gergenheimer That's not a matter of efficiency, but personal preference. You overlook the fact that economics deals with means, not particular ends. Whether or not you want to gas your car or burn wood is based on preference, in order to do each, however, the means in themselves can use efficiency. What is the best means to reach said end in terms of least amount of labor/time being used = efficiency. Whether or not you want to do it or do something else = preference. There's a difference.

[gergenheimer]

@Audiofalcon7 No. By definition, efficiency is a comparative concept - an assessment of alternative uses of time, labor and resources - but context and individual preference DO matter. You presented an ultra-simplistic choice scenario, set in isolation, and declared it an example of how efficiency is not an arbitrary assessment. But what you call mere "preference" when faced with a complex set of choices is actually "efficiency" as determined by a different set of subjective values.

[Audiofalcon7]

@gergenheimer I'm not saying individual preferences don't matter. My example only shows that in calculation of what is and what isn't efficient, you can only truly analyze the means. In no way can you analyze the efficiency of a preferential choice. They matter, but you cannot lump them together and tell them "this choice is best" (unless it's a means to an end, that is) without your own preference being in place. You can also compare means and methods to getting a job done, but not preferences.

[Spefbot]

Just aesthetically it seems abhorrent to say "true before empirical testing" the appropriate term is logically consistent.