SEMAINE D'ÉTUDE SUR LE ROLE DE L’ ANALYSE ECONOMETRIOUE ETC.
633
Yet, once these needs are satisfied the marginal utility of successive
increments of those commodities may fall dramatically
and very quickly even become negative. Obviously, before this
happens, demand will shift to other commodities. But the property
that those basic needs saturate rapidly in no way alters
the fact that they must be satisfied first of all.
Now, current demand theory (especially — I must say —
after its recent elegant refinements) has focussed our attention
exclusively on what happens at the margin — on marginal
substitution among commodities if a price change, or on equalisation
of marginal utilities. Such an approach may have a
justification in a static world, where everything which may happen
cannot but happen at the margin (which always remains
the same). But in a world where per-capita incomes are
moving, there is very little help we can get from marginal
atilities, unless they are specified over the whole range of the
atility functions, i.e. unless we pass from them to absolute
levels of utilities. It is the absolute level of utility of each commodity
that will tell as which of the various commodities comes
next into the range of consumer’s preferences, even if the corresponding
want will then rapidlv saturate.
To conclude, we may say that, owing to a fundamental
property of human nature, there exists a very definite order
of priority in consumers’ wants. The less basic a want is,
the higher will be the number of wants that must be saturated
before it can be afforded consideration. This order of priority
is especially strong at low levels of income, where satisfaction
of some wants is a conditio sine qua non, even to the appearance
of all the others. But the order persists at a higher level
as well, where the process of decision becomes more complicated
only because the order itself may no longer be so obvious,
and needs first to be discovered. This takes me to my second
point. :
The second addition to demand theory that I should like
to make refers to the nature of the behaviour of human beings.
to] Pasinetti - pag. 63
