The Front Range Voluntaryist Issue #5.pdf
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What We Can Learn From Crusoe on an Island, a Stagecoach, and Your Favorite Meal: A
Review of Man, Economy, and State, Chapter One, article by Scott Albright
[This is the beginning of what will be a 12-part series on Rothbard’s economic treatise]
After finishing chapter one of Man, Economy and State , by Murray Rothbard, the two
prominent concepts that I learned more about are those of marginal utility and time
preference.
Murray Rothbard elaborates on isolationist economics to elucidate upon the discovery of
economic principles that are derived from the actions of Robinson Crusoe (a fictional
character used for illustrative purposes) who is stranded on an island.
To simplify the matter, Rothbard uses two goods that Robinson desires as his most highly
valued ends, that of consuming berries and leisure. If Robinson can pick 20 berries an hour
and works 10 hours a day, he can consume 200 berries a day and 14 hours of leisure.
If he decides to construct a stick, so that he can pick the berries more efficiently, increasing
both his total output of berries and output per unit of time (say, per hour), he can only do this
at the expense of forgoing some of his production and consumption of berries, and allocating
time to produce the stick. This means that he must lower his time preferences, preferring to
save some of his berries for the time period that he will be constructing the stick, in that he
will either have to pick more than he normally consumes, to have for the production of the
stick, or to eat less of it than he normally does, or a combination of both.
Either way, this simple isolationist story elucidates on the principle of capital accumulation in
society and what is logically necessary for its accumulation; the exercise of foresight, restraint
of appetites, anticipation of future demand, and a lowering of time preferences, foregoing and
delaying the consumption of some goods and/or leisure in order that you can consume more
in the future, hence the saying that "savings is delayed consumption." It does show us
fundamental principles of human action and allows us to build upon them, starting at the
individual level and moving towards society.
"The restriction of consumption is called saving, and the transfer of labor and land to the formation of
capital goods is called investment." [1] This is (in this story) what can free up time for either more
berries, leisure, or another good, say, shelter, clothing, or building a fire.
Whether Crusoe pursues the production of this stick will be determined by his value scale.
Does he enjoy the work involved in picking berries? How much leisure does he desire to
consume, how many more berries, what other goods does he prefer?
"Thus, for each person and type of labor performed, the balancing of the marginal utility of the product
of prospective units of effort as against the marginal disutility of effort will include the satisfaction or
dissatisfaction with the work itself, in addition to the evaluation of the final product and of the leisure
forgone." [2] In other words, the marginal utility of what Crusoe will obtain by producing the
stick (say, the ability to pick 50 berries an hour instead of 20) will have to be higher than the
value of what he gave up in order to produce it (say, 10 hours worth of a combination of
leisure and berry picking) or else he will not produce the stick.
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