Karel Engliš, Das Liefmannsche Gesetz des Ausgleiches der Grenzerträge in der Konsumwirtschaft (1917)

Engliš’s German-language article examines Robert Liefmann’s claim that consumers allocate resources by equalizing marginal returns, conceived as utility exceeding subjective costs. Moving from monetary expenditure to labor allocation and the foundations of economic knowledge, Engliš argues that Liefmann obtains plausible results while conflating distinct measures of utility, sacrifice, and return. His criticism reconstructs the reasoning behind those results rather than simply rejecting them.

The central objection concerns the valuation of money. Once needs, prices, and the available money stock are specified, the subjective value of a monetary unit cannot be introduced as another independent assumption. It depends on the consumption opportunities determined by those conditions. Liefmann’s procedure therefore risks presupposing a valuation that can be established only through the allocation it is supposed to explain.

Dann wurde aber die Wertschätzung einer Mark unrichtig im Hinblick auf den Geldvorrat angenommen.

English translation: But in that case the valuation of one mark was assumed incorrectly with regard to the stock of money.

This criticism frames Engliš’s numerical analysis. A mistaken monetary valuation need not change the order of purchases, because that order can be established by comparing utility per monetary unit. The apparent success of Liefmann’s examples consequently does not validate their conceptual explanation.

Engliš distinguishes absolute utility, the surplus of utility over subjective sacrifice, and relative utility or return. Relative magnitudes require an explicit denominator; a monetary unit, a technical labor unit, and a unit of experienced disutility are not interchangeable.

Um den relativen Nutzen oder Ertrag zu erhalten, brauche ich nicht immer den absoluten Nutzen oder Ertrag (Lustgefühl) auf gleichartige Kosteneinheit (die des geopferten Unlustgefühles) zu beziehen.

English translation: In order to obtain the relative utility or yield, I do not always need to relate the absolute utility or yield (feeling of pleasure) to a cost unit of the same kind (that of the sacrificed feeling of displeasure).

The distinction explains why expenditure can be ordered without first translating money into subjective suffering. Foregone utility must instead be assessed through the alternatives obtainable with the price of a purchase. It cannot automatically be identified with a uniform subjective sacrifice attached to each monetary unit.

Damit ist schon teilweise erklärt, daß man zur Bestimmung der erwähnten Geldaufwendung die Wertschätzung der Geldeinheit nicht zu kennen braucht.

English translation: This already explains in part why, for determining the monetary expenditure mentioned, one does not need to know the valuation of the monetary unit.

The positive reconstruction replaces marginal-return equalization in monetary expenditure with an equalization of minimum relative utilities per price unit. Consumers allocate their budget according to the utility obtainable for money; where satisfaction can be extended successively, expenditure approaches a common utility-per-money boundary. Indivisible purchases require attention to the alternatives displaced by the whole transaction.

This reasoning also challenges the direct transfer of valuations based on hypothetical loss to decisions about acquisition. Engliš treats the valuation of changes as primary: a purchase must be judged by comparing the situation resulting from it with the situation without it, including alternative uses of the money. Objects acquire economic significance through the processes in which they serve desired ends.

The discussion of labor both extends and limits the monetary critique. Reworking Liefmann’s example, Engliš identifies a production arrangement yielding the same absolute surplus with less labor and subjective sacrifice. His reconstruction orders productive activities by utility per technical labor unit, while increasing labor disutility determines the stopping point. He thus retains a role for Liefmann’s return principle and marginal-return equalization, but insists on the technical unit connecting output utility with effort.

Earning and spending must nevertheless remain distinct. Labor involves experienced disutility, whereas distributing money already possessed involves choosing among useful alternatives. Treating both labor suffering and foregone consumption as additional costs risks counting the sacrifice twice. An excluded alternative may explain a decision without constituting a further experienced burden.

The conclusion situates these corrections within a broader account of economic inquiry. Engliš distinguishes phenomena considered as existing, as willed, and as obligatory, corresponding to causal, means–ends, and normative explanation. Utility and cost become intelligible through a specified purpose. Although Liefmann rightly relates subjective economics to desired welfare, Engliš rejects the confinement of economic activity to psychological deliberation: production too is economic when understood as a means toward an economic end. The article clarifies the denominators and alternatives governing allocation while grounding economic interpretation in purposive relations without reducing its subject matter to mental events.