This note reproduces an unpublished paper on “Social Values in Economic Consumption” which Knight prepared for the Social Science Research Council (SSRC) Summer Conference, on Nantucket, Massachusetts in June 1931. This paper sheds new light on Knight in two important respects. First, it presents, in a more systematic fashion, Knight’s criticism of what he perceived to be the then standard theory of consumption. Specifically, Knight argued that an individual’s consumption is dictated more by his income in relation to others than by mere utility maximisa- tion—a notion now commonly known as relative income hypoth- esis. In this connection, Knight also pointed out that a general increase in income, not only leaves the individual’s relative pos- ition in society unaltered but makes her/his situation worse off due to the peculiar characteristics of the market for “personal services.” Second, this unpublished address provides further evi- dence of how, in spite of some substantial differences in terms of methodology, his research interests converged in many respects with those of the institutionalists.
Frank H. Knight on social values in economic consumption: an archival note / Fiorito, Luca; Vatiero, Massimiliano. - In: EUROPEAN JOURNAL OF THE HISTORY OF ECONOMIC THOUGHT. - ISSN 0967-2567. - 2021:28(1)(2021), pp. 126-141. [10.1080/09672567.2020.1776354]
Frank H. Knight on social values in economic consumption: an archival note
Vatiero, Massimiliano
2021-01-01
Abstract
This note reproduces an unpublished paper on “Social Values in Economic Consumption” which Knight prepared for the Social Science Research Council (SSRC) Summer Conference, on Nantucket, Massachusetts in June 1931. This paper sheds new light on Knight in two important respects. First, it presents, in a more systematic fashion, Knight’s criticism of what he perceived to be the then standard theory of consumption. Specifically, Knight argued that an individual’s consumption is dictated more by his income in relation to others than by mere utility maximisa- tion—a notion now commonly known as relative income hypoth- esis. In this connection, Knight also pointed out that a general increase in income, not only leaves the individual’s relative pos- ition in society unaltered but makes her/his situation worse off due to the peculiar characteristics of the market for “personal services.” Second, this unpublished address provides further evi- dence of how, in spite of some substantial differences in terms of methodology, his research interests converged in many respects with those of the institutionalists.File | Dimensione | Formato | |
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