Oskar Engländer, Gleichförmigkeit von Preis und Nutzen (1920)

Oskar Engländer’s German-language article challenges the claim that relative prices necessarily correspond to relative marginal utilities. Directed principally against Schumpeter’s equilibrium equations and Liefmann’s doctrine of equalized marginal returns, it asks whether economic rationality entails such proportionality. Its argument distinguishes choosing the best available action from equalizing returns, emphasizing discontinuities in wants and different meanings of economic costs.

The opening analysis separates the economic principle from a supposed tendency toward equal marginal returns. Rational conduct avoids a lesser advantage when a greater one is available; it need not produce equality among the returns from different activities. Engländer locates the relevant valuations within the acting household:

Sie besteht darin, daß beim wirtschaftlichen Prinzip nur auf die innerhalb der eigenen Wirtschaft verwirklichten Werte und Unwerte Rücksicht genommen wird.

English translation: It consists in the fact that, under the economic principle, account is taken only of the values and disvalues realized within one's own economy.

This perspective encompasses more than pleasure: knowledge and other primary values can also motivate the acquisition of means of satisfaction. Examples involving labor and household production distinguish advantageous action from a requirement that final returns coincide. Engländer identifies a stronger condition that would lead to equality:

Es würde vielmehr nur das Streben, keinen Reinertrag anzustreben, der nur unter Verzicht auf einen höheren Reinertrag erzielt werden könnte, tatsächlich zu gleichen Grenzreinerträgen führen.

English translation: Rather, only the endeavour to seek no net yield that could be attained solely by forgoing a higher net yield would in fact lead to equal marginal net yields.

The distinction matters because opportunities for substitution are not indefinitely divisible. Wants can change rank abruptly or cease altogether. The last portion of bread consumed may remain highly important even when an additional portion would have little value. Buying another good therefore need not imply equality between its utility and that of the last bread purchased. Some higher-ranked satisfactions can be compensated by quantities of lower-ranked goods; others resist compensation. Such discontinuities block a general inference from rational choice to equal utility relative to labor expenditure.

The discussion of monetary consumption develops this objection through an analysis of costs. Money is valued through the goods a particular sum can obtain, rather than through an independently measurable utility of the monetary unit. Nor does every unsatisfied desire constitute suffering. Choosing a book instead of a theater visit can be a choice between positive satisfactions, not necessarily an exchange of one pain for a smaller one.

Engländer accordingly distinguishes genuine sacrifices, such as the disutility of labor, from alternative benefits forgone. An action must promise an advantage over genuine costs to motivate its performance. It need not yield a positive surplus over every forgone alternative: equally valued consumption opportunities can still be rationally chosen. This undermines deductions that treat consumer returns as necessarily positive differences between satisfaction and opportunity cost. His engagements with Dietzel, Wieser, Kraus, Liefmann, and Kellenberger show how shifting meanings of sacrifice and forgone benefit affect theories of value and return.

The later analysis directly addresses proportionality between prices and marginal utilities, including its formulation as equal marginal utility per monetary unit. Drawing on Brentano’s psychology, Engländer treats preference as ranking rather than measurable intensity. Uneven changes in consumption as income increases, together with comparisons between necessities and entertainment, challenge universal proportionality.

Continuous substitution could support a relation between prices and quantities that compensate for one another at the margin. Engländer’s objection is that this condition cannot simply be presumed. Gaps in wants permit different price ratios to coexist with rational choice. Substitution thus establishes limits on prices without fully determining them; quality differences and alternative uses do not necessarily remove those gaps.

The concluding discussion distinguishes diminishing satisfaction from successive income increments from diminishing utility within a particular good. It also separates discontinuity of wants from discontinuity of demand and rejects numerical measures of psychological intensity. Approximate equalization may occur within particular categories of earnings, especially interest on money capital, without extending to heterogeneous incomes or consumer returns. The central distinction remains:

Wirtschaftliches Prinzip und Streben nach Ausgleich der Grenzerträge jedenfalls nicht äquivalent.

English translation: Economic principle and the striving for an equalization of marginal yields in any case not equivalent.

The article’s contribution is methodological as well as theoretical: mathematical equalization requires substantive assumptions about valuation and substitution that the economic principle alone cannot supply.