Some notes on Gossen’s “submerged and forgotten” approach to consumption and time

Abstract

Hermann Heinrich Gossen has traditionally been considered a forerunner of the neoclassical theory of demand. With the long-awaited publication, in 1983, of the English translation of Gossen’s book, its editor, Nicholas Georgescu-Roegen, saw in The Laws of Human Relations and the Rules of Human Action Derived Therefrom the roots of a wholly different theory of consumption choices than that generally accepted, one in which the flow of time plays a non-trivial role. However, Georgescu-Roegen’s interpretation did not object to Gossen being a precursor of the subjective theory of value. The paper argues, with evidence from the works of Gossen, Jevons, Menger and Walras, that, contrary to this interpretation, the theoretical connection between Gossen and the marginalist school is unwarranted in that Gossen, contrary to the early marginalists, was not concerned with adding to the theory of exchange the demand side which the classical British tradition had neglected. In fact, Jevons and Walras, concerned with building a demand-and-supply theory of price and with their relative merits as discoverers of the new approach, “elected” Gossen as their common precursor, despite the fact that Gossen explicitly rejected the idea that his laws of pleasure could bear any implication for the theory of exchage.