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A theory of exchange, philanthropy and appropriation

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Conclusion

The interdependent utility model developed here should be viewed as a closer approximation to reality than the independent utility function selected by Pareto and honored Allen when he led in its adoption by English-speaking economists. The strengths and weaknesses of the interdependent model are similar to those of the traditional model.

The unique contribution is the formal inclusion of appropriation. Economists have generally ignored appropriation as an integral form of human behavior or they have viewed it from a normative point of view.5 Appropriation is a form of human behavior as important as exchange. If one assumes the structure of society given then exchange is probably the more important, but if one seeks to understand changes in the structure of society appropriation must bulk large in the analysis. Institutions are changed in specific ways through struggles between individual and groups to shape the world to their own liking. The means employed may be legitimate or illegitimate; the appropriator may use government to attain his ends or he may “offend” government and subject himself to prosecution and incarceration. Governmental accolade and/or condemnation does not change the basic nature of the phenomena.

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Authors and Affiliations

  1. Department of Economics, College of Business Administration, University of Georgia, USA

    Albert L. Danielsen

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  1. Albert L. Danielsen
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Additional information

I am indebted to Dubose Delorme, Richard Higgins, and Warren Samuels, for helpful comments but assume full responsibility for the remaining deficiencies.

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Danielsen, A.L. A theory of exchange, philanthropy and appropriation. Public Choice 24, 13–26 (1975). https://doi.org/10.1007/BF01718412

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