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Sunday, May 27, 2012

THE UNKNOWN QUANTITY - Madelyn Shepard Hyde

Foundation of Economic Education

Perhaps one of the best arguments against attempts to equalize the fruits of human labor under a collectivist society is the infinite variety of human nature. It should be obvious that each person’s desires and aspirations defy measurement—in both quality and quantity—by any other person. And since it is impossible to equate what cannot be measured, the collectivist society must fail in this announced objective.

  It is perfectly possible, of course, to divide a pound of steak equally between two persons. That is a task requiring only a pound of steak, a set of scales, and a knife—and someone to do the dividing. It is also possible to decree that the two individuals shall have a certain number of leisure hours each day. But it is quite another matter to measure the relative value that two persons will place upon steak and upon leisure, for one is certain to be more fond of steak—or leisure—than the other. What satisfies the soul of one person may have little or no appeal to another—certainly not to the same degree.

  Now suppose the purveyor of equality realizes that equal portions of steak will not accomplish this equality which he has set out to attain. He might then undertake to divide the steak unequally by weight, and to reapportion the total number of leisure hours, so that both individuals would be satisfied to exactly the same degree. By what means could he determine what quantity of leisure for one is equal to a certain quantity of steak for the other? At this point, he will have to abdicate from his collectivist throne, realizing that he has no scale by which he can measure any value for any other person.

  If it is impossible for a third party to solve even this one simple equation for two persons, it is fantastic to believe that he could solve the infinitely more complex problem of equally satisfying all the desires of all the people. This egalitarian objective could be attained only if all people wanted the same quantities of all things in life. But they do not. Our forefathers sought to preserve the freedom of each individual to pursue, to the best of his ability, the satisfaction of his own particular set of desires—known only to himself. They had the wisdom to realize that in designing a society in harmony with this variation in human wants they were working with, rather than against, a principle of nature.

  Those of us who wish to assist in a reversal of the present trend away from individual liberty must, among other refinements of the mind, understand, believe in, and be able to explain the subjective theory of value, as forbidding as that term sounds. Except as we understand and apply this correct theory of value, individual liberty is out of the question.

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