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sufficient theory to their particular purposes). As a result,
ENGEL’s discovery has remained until our own day at the
state of an empirical law, almost entirely isolated from the
body of demand theory.
It is not my purpose, of course, to engage in a theoretical
investigation on demand here. However, since the tendency
that ENGEL discovered plays a central role in the subsequent
analysis, I shall discuss at least two theoretical aspects of it,
and make to current demand theory (otherwise insufficient
for our purposes) a few essential additions.
The first basic point I should like to make refers to the
nature of human preferences. This point applies even if we
supposed that individual preferences can be represented by per-
fectly known utility functions. It would be misleading to
ignore, it seems to me, what we do know on the subject, na-
mely that the utility that any commodity can give depends on
the previous consumption of other commodities. For, the acti-
vity of consumption is a process in which there is a very definite
order of succesive steps to be taken. For example, the decision
to buy a motor-car presupposes that the consumer has already
bought — and is permanently in the condition to buy — an
adequate quantity of food, clothes, dwelling space, etc. The
motor-car would not have for him the same utility if he were
not well-fed, well-clad, etc. (1). In other words, the utility itself
of the motor car depends on the type and quantity of com-
modities which have been consumed already. To talk of these
problems evidently means talking of the shape of consumers’
preferences considered as a whole (i.e. of the whole utility func-
tion); it means talking of absolute levels of utility (and not
only of marginal utilities). Let me point out that there are in
particular some basic human needs (like eating and breathing)
for which the commodities that are necessary may be said to
have an infinite level of utility: without them men would die!
) This interdependence was first pointed out to me by Mr. N. KALDOR.
10]
Pasinetti - pag. 62
