Hayek’s introduction to the new edition of Hermann Heinrich Gossen’s Entwicklung der Gesetze des menschlichen Verkehrs combines intellectual biography, publication history, and a critical guide to the book’s argument. Its central claim is that Gossen deserves recognition as a systematic founder of modern economics, not merely as an early discoverer of diminishing utility. Hayek presents the subjective theories developed by Jevons, Menger, and Walras as the durable foundation of economic explanation. Their achievement lay less in discovering wholly unprecedented propositions than in making them the basis of coherent theoretical systems. Gossen is exceptional among their predecessors because he had already undertaken that systematic construction.
The biographical narrative explains how an achievement of this magnitude could remain ineffective. Drawn toward mathematics but directed into law and administration by his father, Gossen eventually left public employment to pursue his research. Hayek cautiously reconstructs the influence of Bentham and Comte and the religious transformation behind Gossen’s optimistic utilitarianism. The book appeared in 1854, after serious illness had impaired its author’s health, and attracted virtually no attention. Gossen died in 1858 without seeing its promise recognized. Hayek distinguishes intellectual accomplishment from historical influence: the content could have founded a school, but its presentation and publishing fortunes prevented that outcome.
Recognition arrived through a precarious chain of references and discoveries. Adamson located the book in 1878 and informed Jevons, who acknowledged its anticipation of his own work and alerted Walras. Wieser subsequently established Gossen’s name within German-language value theory. Yet posthumous fame remained selective:
Gossens Arbeit enthält weit mehr wichtige Gedanken, die später grundlegend für die Entwicklung der theoretischen Ökonomie geworden sind und heute noch Beachtung verdienen.
English translation: Gossen’s work contains many more important ideas that later became fundamental to the development of theoretical economics and still deserve attention today.
This claim supplies the introduction’s practical purpose. Gossen’s cumbersome mathematics, inadequate divisions, and lack of a contents overview had encouraged readers to stop after the opening discoveries. Hayek therefore reconstructs the sequence of the whole book while assessing its strengths and failures.
His theoretical exposition distinguishes three propositions too easily conflated under Gossen’s name. First, enjoyment declines with continued or repeated satisfaction, subject to qualifications concerning intervals, different pleasures, and learning through practice. Second, when time is limited, its allocation should equalize enjoyment at the points where the different activities cease. For Hayek, this marginal reasoning connects utility with the obstacles to its realization. Third, scarce quantities of goods acquire value according to their contribution to satisfaction:
Das Gesetz der Wertabnahme für jede hinzukommende Mengeneinheit eines Gutes, das Gossen hier aufstellt (31), entspricht dem Grenznutzengesetz der modernen subjektiven Schule und verdiente wohl, als drittes Gossensches Gesetz ebenso hervorgehoben zu werden, wie es bei den beiden anderen geschehen ist.
English translation: The law of decreasing value for each additional unit of quantity of a good, which Gossen establishes here (31), corresponds to the law of marginal utility of the modern subjective school and would surely deserve to be emphasized as a third law of Gossen, just as the other two have been.
The distinction matters because declining satisfaction concerns needs generally, whereas marginal valuation concerns particular quantities of goods. Hayek also identifies anticipations of complementary goods, productive goods, and the imputation of value. Introducing the burden of labor then extends the analysis: optimal provision balances utility against the discomfort of obtaining goods. Gossen’s geometrical treatment of that equilibrium receives particular praise. His simplifying assumption of straight-line utility curves, however, sometimes produces conclusions less general than he supposes.
The transition from an isolated individual to exchange exposes more serious weaknesses. Gossen correctly locates the motive for trade in the parties’ differing valuations, but treats their utilities as interpersonally comparable and confuses explanatory claims with prescriptions:
Die entscheidenden Sätze über den Erfolg des Tausches (85) sind daher trotz des richtigen Ausgangspunktes dieser Untersuchung ganz verfehlt.
English translation: The decisive propositions concerning the outcome of exchange (85) are therefore entirely mistaken, despite the correct starting point of this investigation.
Hayek consequently denies that Gossen supplied an adequate theory of price formation. Priority in marginal reasoning does not establish completeness of the resulting economics.
The introduction also surveys the substantial policy portion of Gossen’s book. Hayek singles out neglected monetary arguments concerning predictable money value, circulation velocity, inflation, and bimetallism. His judgments are less favorable toward public lending institutions, whose proposed operation he considers unrealistic. He explains the plan for state acquisition of land through long-term amortization financed by appreciation, while treating Gossen’s extreme liberalism as inseparable from his religious interpretation of economic laws. Crucially, Hayek rejects the inference that marginal-utility theory itself necessarily entails a particular policy program.
The conclusion places Gossen in relation to modern schools. Mathematical economics could develop more of his system, while Austrian economics shared chiefly the fundamental laws and their implications for exchange and money. Even rival theorists claimed him as a predecessor. For Hayek, this breadth of appropriation reveals a common analytical inheritance obscured by school divisions. His introduction thus advances a qualified rehabilitation: Gossen’s enduring importance rests on the systematic reach of his discoveries, without requiring acceptance of his price theory, policy prescriptions, or worldview.
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