Oskar Engländer’s two-part journal article investigates monetary price theory, moving from demand diagrams and subjective valuation to competitive price determination and wartime distribution. Against claims that price theory is essentially complete, he distinguishes two unresolved questions: how buyers form numerically definite monetary bids, and how their conduct combines with objective economic conditions to determine actual prices.
His starting point is the distinction between willingness to pay and subjective value. A demand curve constructed from buyers’ maximum offers cannot simply be treated as a curve of valuations. Engländer identifies the contrary tendency in Menger:
Dementsprechend vertritt denn Menger in seinen Grundsätzen der Volkswirtschaftslehre entschieden eine vollkommene Proportionalität zwischen subjektivem Wert und Preis.
English translation: Accordingly, in his Principles of Economics, Menger emphatically maintains a complete proportionality between subjective value and price.
Engländer’s criticism concerns the passage from qualitative judgments to numerical magnitudes. Preferring one satisfaction to another establishes neither measurable quantities of utility nor their proportional expression in money. His analogy with aesthetic judgment clarifies how degrees can be recognized without implying measurement:
In diesem Sinne können wir von Größe der Schönheit sprechen, einer Schönheit, die einen bedeutenden Grad erreicht, ohne dabei irgendwie an in eigentlichem Sinne meßbare Größen zu denken.
English translation: In this sense we can speak of greatness of beauty, of a beauty that attains a considerable degree, without thereby thinking in any way of magnitudes measurable in the strict sense.
Following Brentano, Engländer distinguishes preference, intensity of desire, and numerical measurement. He also challenges Böhm-Bawerk’s attempt to bridge the difference through summation:
Allein im Unrecht ist Böhm-Bawerk, wenn er meint, ein solches Summieren unterscheide sich von einem eigentlichen Messen nur durch den geringeren Grad der erzielbaren Genauigkeit.
English translation: Yet Böhm-Bawerk is mistaken when he thinks that such summation differs from measurement proper only in the lesser degree of accuracy attainable.
This critique does not eliminate subjective valuation as a cause of purchasing behavior. It denies that valuation already explains a definite monetary offer. Monetary exchange cannot simply inherit the explanation of barter, since buyers do not value money surrendered in the same direct fashion as consumption goods. Substitution values that presuppose prices likewise cannot explain their formation. Income and other prices matter: maximum bids for less important goods depend partly on expenditure required for more important ones.
The second installment develops the graphical implications. A buyer may purchase the same quantity across a range of prices, so declining willingness to pay cannot simply be identified with declining marginal utility. Engländer proposes discontinuous demand figures, while deferring their complete derivation and recognizing that aggregate demand may behave differently. Under uniform unit pricing, total willingness to pay for a specified quantity is represented by quantity multiplied by the corresponding maximum unit bid, not by summing offers associated with different quantities.
This distinction supports his criticism of Marshall’s consumer surplus. Savings and additional satisfactions are genuine advantages, but monetary expenditure or savings do not measure their subjective value. Engländer emphasizes the gap between the actual unit price and the buyer’s maximum offer for the quantity purchased. That gap permits price changes without necessarily changing demand.
The inquiry then turns to definite price formation. Competition among buyers may establish boundaries without selecting a unique price between them. Sellers’ subjective use-valuations generally cannot supply the missing determinant in commercial production, while bargaining alone cannot explain systematic relationships between costs and prices. Engländer locates the tendency toward costs plus an ordinary return in entry, withdrawal, and output adjustments. Interest nevertheless remains a surplus requiring explanation; calling it compensation for waiting does not resolve the problem. Since costs themselves are prices, the connection between ultimate productive resources and buyers’ conduct remains unfinished.
The final section applies these distinctions to wartime controls. A ceiling within the permissible range of prices can reduce sellers’ gains without producing unsatisfied effective demand, provided supply remains worthwhile. A ceiling below that range encourages clandestine trade; enforcement may instead distribute goods through connections or queues. Under severe scarcity, rationing becomes necessary where market allocation would exclude poorer households from necessities. Allotments should follow need, and prices should leave even the poorest households resources for other purchases, potentially requiring subsidies.
Engländer connects the limits of utility measurement and competitive price determination with the conditions of justified intervention. He treats rationing as an emergency measure compatible with continued capitalist production and income formation, while reserving a complete positive theory of price for further work.
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