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Source link: http://archive.mises.org/3230/mistake-in-translation-of-mises-economic-calculation/

Mistake in translation of Mises’ Economic Calculation

February 26, 2005 by

In English translation of Economic Calculation we read a sentence:

“Marginal utility does not posit any unit of value, since it is obvious that
the value of two units of a given stock is necessarily greater than, but
less than double, the value of a single unit.”

It seems like Mises thought about measuring utility.

In German the sentence is as follows “…da bekanntlich der Wert zweier
Einheiten. aus einem gegebenen Vorrat nicht doppelt so groß ist als der e i
n e r Einheit, sondern notwendig größer sein muß.”

So it seems that the sentence should be: “it is obvious that the value of
two units of a given stock is not the double of the value of a single unit,
but its total value is necessarily greater than value of one unit” or
something like that.

One student is translating Economic Calculation into Polish, he checked the
German version and brought my attention to it.


Pete Canning February 26, 2005 at 2:07 pm

I seen no mention of measuring utility, and both sentences seem appropriately marginalist / subjectivist.

mateusz machaj February 26, 2005 at 2:13 pm

“double, the value of a single unit”

If You want to double the value of single unit, you have to have this “value of single unit” expressed in some cardinal terms. Otherwise what are you going to double?

Pete Canning February 26, 2005 at 4:22 pm

He says you can’t double the value.

Juliusz Jablecki February 26, 2005 at 4:26 pm

Of course, he says this in the German version, not in the English one, though.

Don Lloyd February 26, 2005 at 4:28 pm


“If You want to double the value of single unit, you have to have this “value of single unit” expressed in some cardinal terms. Otherwise what are you going to double?”

A similar problem exists with regards to “total value”.

It’s difficult to entirely avoid something that may have cardinal implications.

But the quote isn’t necesssarily correct, in any case. For a single driver with a single parking space, two automobile units are not necessarily worth more than one.

Regards, Don

Juliusz Jablecki February 26, 2005 at 4:50 pm

Mr. Lloyd, it follows from the whole passage in German that Mises was trying to convince the reader that utility is something that cannot be measured. The English translation suggests, however, that value can in fact be “doubled” – which clearly requires some sort of value measurement.

Regards, Juliusz

N. Joseph Potts February 26, 2005 at 4:50 pm

I don’t find the distinction substantive between the two translations. I DO read German, and both quotes seem consistent with the original. Yes, twice the value would be edging toward cardinality, IF he had suggested that it WAS twice the value of one.

mateusz machaj February 26, 2005 at 5:23 pm

German version says
1st and 2nd > 1st

English version says

1st and 2nd > 2*1st

There is a difference.
German statement is possible to explain in ordinal terms. Two units are better than only one, because thanks to second unit we can satisfy our second need that would have not been satisfied if the 2nd unit did not exist.
There is no measuring utility in this case. Mises does NOT speak about doubling utility of one unit, because it is simply impossible to ground this thesis in the action axiom. Action axiom tell us that if we have one unit more, this means that total utility is higher, because we can attain one additional end.
It is entirely different case in English translation. Here we have a nonsense “doubling the value”. Of course, Mises says (in English i.e. wrong translation) that it is NOT double the value, but smaller. He does not say in this sentence that total utility it not “double of one”, because “double of one” is nonsense. He says as if it would be comparable. And in order to compare something to “double the value of one unit” we would need cardinal numbers.
Statement 1st and 2nd > 2*1st is only possible if we can multiply. It doesn’t matter for the purpose of analysis if the symbol is “=” or “>” in this case, because either way we would need cardinal numbers.
In praxeological analysis we can value first unit only ONCE, because we act upon in only once. So this thesis cannot be grounded in action axiom. The term “double the value” is nonpraxeological ergo nonsensical. Doubling something is a strictly arithmetical thing.
To sum up: 1st and 2nd > 2*1st is a highly anti-Misesian statement, because You cannot double the value of one unit (and in English sentence we do not have a statement that doubling is impossible – in fact in order this sentence to be true we would need the concept of “doubling the value” to be true)

Logan Buck February 26, 2005 at 6:48 pm

The second translation is definitely much more consistent Thank you for clarifying.

P.M.Lawrence February 26, 2005 at 11:09 pm

This is much like the problem Peano had in defining numbers without using concepts that already had numbers buried within them.

He used set theory. His axioms often get misrepresented as using “the smallest set such that…”, when for clarity is better to use “the intersection of all sets such that…”, since people might misread “smaller” as signifying what they have come to expect from the concept “number”.

Mises’ original clearly makes more sense than the first translation, since it is possible to think of examples where twice as much is more than twice as “valuable”, e.g. half the fuel you need to reach land vs. all the fuel you need.

However, although it is clear that usually twice as much is worth at least as much, since you can discard what you don’t want, there is a catch. There may be a cost to discarding. Consider industrial waste, for instance.

Juliusz Jablecki February 27, 2005 at 4:01 am

The whole point is that it is a misunderstanding to speak of non-meausrability of value and then to measure it – which is exactly suggested by the statement that “doubled value” of a single unit is greater than the value of a stock of two units.

We cannot say anything about the “doubled value of a single unit” since, for start, we have no clue whatsoever how to do the multiplying. We can only compare values — not measure them. As Matt suggested comparing the value of two units and one unit has praxeological basis. As to “doubling” the value, we don’t really know — and indeed, don’t need to know — what that means.

gene berman February 27, 2005 at 7:02 am

As long as the reader of the word “units” is aware (as should be normally obvious both from the sentence as it written and from the context in which it occurs) that reference is to the subject of valuation (whether dollars, shares of stock, or supplies of fuel), nothing whatever is amiss with the original translation (nor with its suggested correction, for that matter).

We can know just three things about the extent of another’s valuation of the additional unit in question and that of the concomitant total: first, that as long as the additional unit is regarded as an economic good, its value is greater than nil; secondly, that its value must lag behind that of the next-last (because its position precludes its employment in the satisfaction of an as-urgently felt need as its predecessor; and, lastly, that the sum of those values must necessarily exceed that of the first considered alone (because a positive quantity added to a positive quantity must result in a greater quantity), though lagging behind the unattainable limit of twice that quantity.

I know nothing whatever of German nor of linguistics from an academic viewpoint; it is my suspicion, however, that the origin of concern in the matter is precisely that originally alluded: the clarity of the connection between the word “units” and its referent (confusion potentially arising from connecting it with “value”). This is a common problem in language–probably all languages–and probably arising more frequently in spoken than written expression. Its root is efficiency–the desire or need to express in fewer words–and cannot be completely avoided without lengthy (and frequent) reiterations. It probably occurs less frequently in languages in which the potentially confusing referents are obviously differentiated by being different in gender; in English, proper interpretation is conveyed primarily by word order, though not always entirely satisfactorily.

That’s my opinion an’ I’m stickin’ to it. I could be wrong (it’s always “Miller time” at my place.)

Juliusz Jablecki February 27, 2005 at 7:20 am

“the sum of those values must necessarily exceed that of the first considered alone (…), though lagging behind the unattainable limit of twice that quantity.”

Values cannot be added or multiplied, they can only be compared. This is exactly the meaning of the word “ordinal” which describes utility; ordinal meaning arranging into a scale, but not positing any unit of value whatsoever.

gene berman February 28, 2005 at 12:16 pm

Thank you, Mr. Jablecki, for something I couldn’t have accomplished alone: you’ve crystallized what is even more obviously now a misunderstanding of a concept.

First, let us clear away a complicating feature of your comment: “cannot be added or multiplied.” Let’s just drop any consideration of “multiplied”–it’s subsumed in the term “added,” just as “divided” stands in the same relationship to “subtracted.”

The phrase or statement that “values cannot be added” is certainly true in the sense that I mean it, that you mean it, that Mises meant it, etc. There can be no “measurement” of the amount, the quantity, the extent of value for the simple reason that such value is itself an introversive or subjective entity existing in the mind of the valuing individual; it does not inhere in the object valued. Further, “measure” implies existence of a “standard” or “unit” against which that valued may be compared objectively and its magnitude determined and expressed numerically. (And, of course, we have knowledge of attempts by various “mathematical” economists to do just that–to construct some “unit of value”.)

But that cannot preclude the “adding” or “subtracting” of which we are mentally capable, even on the subjective level. Only provided that we have not yet approached that unit whose value we would consider to be marginal, no argument can be raised against our assessment of the resultant value as “more” or “less” (or “greater” or “smaller”). Bear in mind that the “more” and “less” are, themselves, still subjective matters incapable of quantitative expression, regardless of the fact that, in cases they may be related to quite determinable physical magnitudes.

This is, at its root, truly a semantic matter. My guess is that, if humans had evolved with a genetic disposition to comprehend, in their thinking, the subjective nature of valuation, the developing societies would have, likewise, assigned different words to distinguish one type of assessments from another.

It might be worth remarking, as a slightly related matter, that the matter of which we speak has been obvious (whether they could express it in words or not) to human at least since the dawn of civilization. In interpersonal transaction, men have sought to reconcile the “higher” and “lower” of differing, entirely subjective preference with the obvious physiclal “quantitativeness” of many aspects of their existence. In establishing various commodities as “media of exchange,” they have sought out for the purpose just those which experience had shown to have the least diminution (with increasing quantity) in marginal valuation in the subjective preference of the very many; and, the further the use of such a “money” commodity became, the smaller did become, not only the degree of decrease in the subjective valuation of individual participants–but also the obvious difference BETWEEN the subjective valuations of different individuals. It might well be said (and has been, see the writings of Dr. Antal E. Fekete) that money (and he refers to gold) is that commodity which has no decrease, with increasing quantity, in its marginal utility. Dr. Fekete is not anti-Austrian; he does not deny the Law (of marginal utility)–he just regards its consideration and applicability as insignificant in the special case of money. Men seek a “numeraire” (and, for periods of time, claim to have found it) but it doesn’t exist. This should surprise us no more greatly than that many seek to speak with the departed (and that some insist that they do and offer to do so on behalf of still others); it’s the same game.

Dan Mahoney March 1, 2005 at 7:19 am

Gene Berman write:

“There can be no ‘measurement’ of the amount, the
quantity, the extent of value for the simple
reason that such value is itself an introversive
or subjective entity existing in the mind of the
valuing individual; it does not inhere in the
object valued.”

If value is an “entity existing in the mind,” as
you claim, then it can only refer to something
like strengths of feeling, degrees of want
satiation, etc. In other words, it is
*cardinal.* It can be understood, say,
pyschologically without reference to choice.

A true ordinal conception of value, as Guido
Huelsmann points out in the introduction to EPE,
necessarily entails a comparison between one good
and *another* good as the precursor of an actual
choice. In other words, value is a relation, an
ordinal ranking between two goods. There is no
value “of” a good as such, rather there is value
*relative to* another good.

The issue of subjectivity is rather irrelevant to
this debate. A cardinal entity can be
subjectively perceived by an actor, but an
ordinal relation necessarily implies a ranking
among goods that are subject to a choice. The
choice (i.e., the particular ranking) depends on
subjectivity, but it is objectively true that the
choice is always between (at least) two goods,
and this presuppses a comparison of the two goods.

gene berman March 1, 2005 at 10:04 am


Hard to know where to start. You put me at a loss for words–and that’s saying something!

I confess to not knowing what you’re saying and, relatedly, to not understanding what it is that I’ve said (despite the quoted selection) with which you differ or suggest some other, more proper explanation.

We know nothing whatever of “choice,” beginning with whether it exists or not (and there are very many in the ranks–including thinkers of substantial reputation–who deny that it does). The “Austrian” view, as expressed most thoroughly and cogently by Mises, is that whatever we know or can say about choice is merely the product of our observation or reflection of its (choice’s) only trace in our existence: our actions and those of our fellow men. Introspection or reflection on our own acting and the thinking which often preceeds it suggests that what seems evident in at least some cases must probably, even must certainly, be associated with every other instance of such behavior. But, to repeat, the existence of choice and everything we might presume to know about it is but a facet of the fact that we act–a deduction, as it were, of the preconditional cognitive activity preceeding action. The “proof” of this is essentially truistic and negative: if it (the preceeding passage) were not so, all of what we call action would simply be automatic response to stimuli, ultimately accountable by the methods of the natural sciences. On the one hand, we cannot–ever– know whether we are correct in our basic epistemological assumptions: we can never be confident that we are not the atomistic entities that the positivists insist we are. On the other hand, if we are such entities, nothing we say or do (or think) makes any difference: we can’t help (or change) it any more than can the molecular constituents of a rock.

In acting, insofar as any commonality can be described which must link or unite EVERY instance of such phenomenon (bear in mind that, unless our conclusion is true in every case–not just most or nearly all, we have not arrived at knowledge which may be “used”–
made the basis for further deductions) in our consideration. Realizing this, it can be seen as wholly inadequate to speak of “choices between goods” or “rankings” among various
potential courses of action. These are not wrong in the normal sense; rather they simply cannot convey what is UNIVERSAL in the instances under our consideration. What is essential, universal, and implicit in “choice” has nothing whatever to do with categories such as “goods” (be they “economic” or not) nor even with any direct comparison between such objects of choice.

What “choice” (and, inseparably, action) must imply is: a comparison (of the very instant of the action, though logically prior if separate) between states of want-satisfaction at the same or differing points in the future (and time-distance from the present). It is entirely conceivable (some would insist necessary) that computational processes are involved but that is beyond the scope of either our knowledge or this discussion. And it is moot whether what we evaluate may be reduced to comparisons of “magnitude” or “intensity”–again, beyond our knowledge or present scope. We make choices (act) between what we “value” in our assessment or ranking, whether we might say we want it “more” or that it is “higher” on our “list.” And, finally, even the absence of any action (where some action might be possible) is, in and of itself, an action (with the full implication of choice contained).

The fact that we choose “more” of some thing or many things implies quantification involved in at least some valuation: “more” is more highly valued than “less” to the point we term “marginal.” Whether or not there is a greater “quantity” of satisfaction actually or contemplated, we do not know. But not the slightest harm is done to our understanding of value by observing that, in being given an ice cream cone and asked whether we’d like
a bit extra smushed on top, our “yes” to the offer increases not only the quantity placed on the cone but, at the moment , something “added” to the satisfaction anticipation of the instant preceding. I’d give you more but I’m plumb “out” for the time being.

The closest I can come, though it may be inadequate to reconcile any difference in understanding, is to offer some critique of the concept of “choice,” i.e., the concept of choice you’ve offered in your last paragraph: it seems to lie at the root of the matter.

In writing what I shall, I am aware that other opinions of the matter may and, in fact, do exist. I express only that to which I adhere but insist also that it is identical with that of Mises, and that, in that respect, it is the orthodox, fully “Austrian” view of the matter. Part of the difficulty in addressing that which you’ve raised is that it is not clear at all whether you are posing an opposition to the Austrian view as such or whether you believe me mistaken in my understanding of that view and are suggesting, in your analysis–especially the last paragraph–of what my error consists. And, finally, before getting to the matter itself, I’d observe that the process by which people communicate that which they think or believe (even when fully and frankly committed to that task) is not at all a simple matter; opportunities for error and misdirection abound, at least partly due to enormous small but cumulative imprecisions in language. In that, I don’t mean to imply error–only the ordinary complexity that inheres in the shades of meaning of the words we use.

gene berman March 1, 2005 at 10:12 am

Sorry, Dan. The last two paragraphs should follow the first. No idea how it happened.

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