6 replies to this topic

[Murphy]

Would Menger classify oxygen as a good?

[Rune]

To the extent that oxygen in some cases could be scarce, he would classify it as goods. James Elliott and Alexander McAvity patented the “oxygen reservoir for divers” in 1839 and Menger therefore probably knew that oxygen also from a practical (not only theoretical point of view) could be scarce in some situations.

[Murphy]

Okay this was a bit of a trick question and I think you fell for it. I think many modern Austrians would endorse your position, and indeed I think Rothbard himself in MES says something to the effect that air isn't a good unless we're talking about conditioned air which is scarce and hence a good.

However, in Menger's approach, something can be a good even if it isn't scarce; in that case it just isn't an economic good. The following is taken from Mises.org's [a href="http://www.mises.org/content/mengerbio.asp"]bio[/a] on Menger:

Menger draws a further distinction: between those goods whose available quantity exceeds the amount necessary to satisfy all human wants for them and those available in a quantity that is insufficient to fully satisfy human wants for them. The former Menger designates "non-economic goods" and the latter, "economic goods." In the case of non-economic goods, because of their superabundance relative to wants, people need take no definite action with regard to them. With regard to economic goods, however, an individual must undertake to economize them in order to satisfy his wants for them as fully as possible.

In other words, the attributes that something needs to possess in order to count as a good for Menger do not include a caveat that "the available supply must not be able to satisfy all human wants for it." But you're right, in the modern Austrian approach I think these things wouldn't be classified as "non-economic goods" but rather as "background conditions of human welfare."

[Joanne]

Murphy, on Sep 4 2005, 02:41 PM, said:

Would Menger classify oxygen as a good?

In his classification system, it would be a non-economic good. This is because oxygen is so plentiful that we are not compelled to act to transact it in any way. We don't have to consciously ration it or worry about scarcity.

Menger could not foresee many of the current uses of pure oxygen in the medical or engineering fields where there is packaging and trade in oxygen, so in these contexts, it would be an economic good. As a postscript, there would be some who would argue today that oxygen as part of the atmosphere is an economic good.

[Murphy]

Joanne, on Oct 30 2006, 04:43 PM, said:

In his classification system, it would be a non-economic good. This is because oxygen is so plentiful that we are not compelled to act to transact it in any way. We don't have to consciously ration it or worry about scarcity.

Menger could not foresee many of the current uses of pure oxygen in the medical or engineering fields where there is packaging and trade in oxygen, so in these contexts, it would be an economic good. As a postscript, there would be some who would argue today that oxygen as part of the atmosphere is an economic good.

Right, this is what I was looking for when I wrote the question. As I said to Rune, it is a bit of a trick because modern Austrians don't classify goods the same way Menger did.

[Murphy]

Mart Grams, on Jul 6 2008, 08:34 PM, said:

Only if polluted. Scarcity would then kick in and the economic value would emerge for "consumers."

I think I know where you are coming from with this answer, but strictly speaking it doesn't make sense. It sounds like you are saying polluted air is a good, while clean air isn't.

You're right that Rothbard would say something like: "In normal situations the air we breathe isn't scarce and so doesn't count as an economic good. However, we can imagine a world where massive pollution requires people to buy clean air from companies [like in the movie Spaceballs I think--RPM] and then it would be a scarce, economic good."

However, that's not the way Menger handles this. For him, there can be free or non-economic goods, and the air we breathe is one of them.