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  
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.