The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Ophelimity

  • Nicholas Georgescu-Roegen
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1641

Abstract

Ophelimity is a term coined by Vilfredo Pareto (Cours, I) from the Greek ωϕελìμoς (beneficial) to denote ‘the attribute of a thing capable of satisfying a need or a desire, legitimate or not’. His reason, invoked by others as well (e.g., Fisher 1906), was that ‘utility’ usually opposes ‘perniciousness’ which economic value does not exclude: weapons, addictive drugs, and the like are commodities. But his action had a root in the interminable controversies that surrounded the economic significance of ‘utility’ ever since the naturalization of that term in political economy.

Ophelimity is a term coined by Vilfredo Pareto (Cours, I) from the Greek ωϕελìμoς (beneficial) to denote ‘the attribute of a thing capable of satisfying a need or a desire, legitimate or not’. His reason, invoked by others as well (e.g., Fisher 1906), was that ‘utility’ usually opposes ‘perniciousness’ which economic value does not exclude: weapons, addictive drugs, and the like are commodities. But his action had a root in the interminable controversies that surrounded the economic significance of ‘utility’ ever since the naturalization of that term in political economy.

Utilitas (utilitatis) with its original Latin meaning of usefulness, benefit, advantage, had been used throughout the Middle Ages by political and philosophical writers. In the early 16th century David Hume in a few places used ‘utility’ as a correlation of pleasure. But in economics, utilità was first used by Ferdinando Galiani in his admirable 1751 Della moneta with the specific meaning of ‘the aptitude of a thing to procure us felicity’. Galiani thus conceived utility as a physicalist attribute. The introduction of ‘utility’ as a technical term in English political science was the lifetime work of Jeremy Bentham (1838, in Works, I). Like Galiani, he first defined it as ‘that property of any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness’. But in the same breath he equated ‘utility’ with happiness, a psychic attribute, through his fundamental principle of utility – namely, the greatest happiness of the greatest number. Ultimately, Bentham was disturbed by this terminological tangle and protested that he did not find ‘a sufficiently manifest connection between the idea of happiness and pleasure on the one hand, and the idea of utility on the other’. Significantly, late in life he even admitted that ‘utility was an unfortunately chosen word’, and blamed Etienne Dumont (his former French promoter) for it, saying that he was ‘bigoted, old, and indisposed’ to novelty. On this Bentham was both unjust and ignorant: in French (as in Italian, too) there is only utilité for both utility and usefulness. The difference between the physicalist and the psychic concept was admirably pinpointed in the rather forgotten 1833 lecture of W.F. Lloyd, who argued that ‘the utility [usefulness] of corn is the same after an abundant harvest as in time of famine’ whereas value [utility] expresses ‘a feeling of the mind [which] is variable with the variations of the external circumstances’.

After Lloyd at least, the Anglophone economists lost a great opportunity to remedy the muddle originating from the French language. Instead, as if virtually everyone had believed with Plato’s Cratylus that every thing has a ‘natural’ name, they kept proposing one term after another with the hope of hitting upon it. Expressions of dissatisfaction with ‘utility’ were de rigueur. Senior (1836), for example, rejected the suggestions of ‘attractiveness and desirableness’ as even more objectionable than ‘utility’, by which he proposed to denote a feeling of the mind. Most instructively, as late as 1898 Marshall judged that ‘Ophelimity,… Agreeability, Enjoyability, Desirability, etc., are not faultless [but] it seems best for the present to adhere to Utility in spite of its faults.’

In his review of Pareto’s Cours, Fisher also did not fail to criticize ‘utility’ for its resilient ambiguities, yet defended its use on the basis of its long tradition. But the best proof that the epistemological skeleton was still there is Fisher’s own motions of ten years later. In his epochal 1906 monograph he finds fault with ‘utility’ because ‘useful’ is the opposite to ‘ornamental’, because of the awkward ‘disutility’, and because of the extraneous phrase ‘public utility’. In the end he decided to use ‘desirability’ in preference to ‘utility’. But in a later paper Fisher (1918) revealed how absorbing was that baptizing preoccupation. After arguing that his preferred ‘desirability’ would not, any more than ‘utility’, do away with the ethical incongruity of including ‘undesirable articles, such as whiskey and prostitution’, he cast a strong vote for a word he just coined: ‘wantability’. And there is no little piquancy in his final proposal, ‘wantab’ for the unit of wantability.

The fate of ‘ophelimity’ itself in the hands of Pareto has been tortuous and inconsistent, yet greatly beneficial to the development of economic thought. Pareto was the greatest culprit for those accidents. However, Pareto’s principal reason for this terminological innovation was to distinguish by ‘ophelimity’ the attribute of things possibly desired by an individual from the attribute of things beneficial to society, to the human race, for which he proposed to retain the old term, ‘utility’. To wit, a gun belongs to the first, but not to the second category (save in special circumstances), whereas the air, the sunlight though useful to the human race have no ophelimity. Pareto did not discard ‘utility’. In its new sense, the term is a pillar of his monumental Mind and Society (1916). The snags emerged rather on the economic track.

As mentioned at the outset, according to Pareto’s earliest definition ophelimity was a physicalist attribute. Moreover, it was a quantitative one, subject to all the laws of quantity. This idea somehow remained in a fold of his mind even after he came to reject measurability completely. Denoting by one word a relational phenomenon (between a mind and an object), Pareto inevitably fell in the same pitfall as Bentham: without much ado he described ophelimity ‘as a properly subjective and fundamental’ attribute. And he went on to define ophelimity in a completely analogous way with Jevons’s final degree of utility, and followed with a surprising, yet instructive footnote (1896: § 25n). Arguing in continuation that the increment of ophelimity corresponding to an increment dxi of commodity Xi is the quantity fi(x1, x2,…, xn), he noted that a function fi(x1, x2, …, xn) such that ∂F/∂xi = fi, for all i’s does not always exist. If F exists, as it does if fi is a function of xi alone, then it measures total ophelimity. To this mathematical remark Fisher (1896) strongly objected, even though it was in perfect order. Its sin was other: it foisted general mathematics upon a particular structure. If total ophelimity is a quantity then the existence of F is part and parcel of that postulate. Pareto, however, carefully observed that if F does not exist, ‘the ophelimity enjoyed by the individual depends … also on the possible combinations’, in this way anticipating by ten years the issue of integrability (Pareto 1909, App. §14). Abiding throughout the Cours by the cardinal (purely quantitative) nature of ophelimity, Pareto defined weighted elementary ophelimity by fi/pi, where pi is the market price of Xi and then established the famous theorem for the maximum of consumer ophelimity first proved by H. H. Gossen.

But in a letter of 28 December 1899 to Maffeo Pantaleoni (1960), Pareto set forth a novel idea that was to transform radically not only economics but also the other disciplines of man. It was the idea that an individual or any organized group of individuals always chooses as a matter of fact from accessible alternatives that which is preferred to any other, that which has the greatest ophelimity. An important link in this conception is the case of an individual completely unable to choose any alternative. Apart from a delightful drawing of the so-called Buridan’s ass between two plates of fruit, Pareto did not elaborate upon this point. Like virtually all after him, he took for granted that between ‘preference’ and ‘non-preference’ there must be ‘indifference’. Yet the existence of indifference in this case ought to have been explicitly postulated (Georgescu-Roegen 1936), for Pareto’s new edifice of indifference curves was founded on it.

Edgeworth proceeded from considerations of pleasure and its measure to arrive at the indifference curves. I go the reverse way; the indifference curves [which] are the result of experience are my starting point. I proceed from known to unknown (1966, VIII),

a neat description of his new theory that was repeated in all essays after 1900. And he rightly pointed out that the issue of whether or not the utility, the rareté, and even the ophelimity (!) are measurable is now idle: there are no more such things that must be measured. In Manuel (App.) he showed that we can give arbitrary (but increasing) indices to the indifference varieties, each index serving for ordering the ophelimities of the involved commodity combinations. He could thus stress that he moved from utility, to ophelimity, and finally, to indices that free economic theory of all ‘metaphysical’ ingredients. But then f(x,y,…,z) being an index, an increasing function F(f) of it would serve as well.

What followed has been hard to understand. In all his later theoretical contributions Pareto continued to treat ophelimity as a cardinal entity, just as utility was by his predecessors. In Manuel (App.) as well as in the two Encyclopedia articles (1966, VIII) he assumed that any second partial derivative of an ophelimity index has an invariable sign. Curiously also, this peculiar error was detected only years later by Sir John (Hicks and Allen 1934), who simply observed that
$$ {\partial}^2F(f)/\partial x\partial y={F}^{\prime}\left({\partial}^2f/\partial x\partial y\right)+{F}^{{\prime\prime}}\left(\partial f/\partial x\right)\left( df/\partial y\right) $$
(1)
hence, the signs of δ2F/∂xy and ∂2f/∂xy are not necessarily the same. (An analogous statement is true for ∂2F/∂x2.)
Economic theorists have ever since been more respectful of this indeterminacy, albeit not in every case. The exception concerns another innovation of Pareto, the maximum of ophelimity of a community, which he first defined directly with the aid of his box and the now famous condition of Paretian optimum (1906, iii, §116, vi, §32). For the mathematical condition (App. 89) he proposed
$$ \left[F\right]=\left(\Delta {F}^1/{F}_i^1\right)+\left(\Delta {F}^2/{F}_i^2\right)+\dots +\left(\Delta {F}^n/{F}_i^n\right)=0, $$
(2)
where Fk is the total ophelimity of the individual k and Fik is the elementary ophelimity of Xi The leading idea was that all terms of (2) are homogeneous, each representing an increment of Xi that would increase ophelimity by ΔF. But the operational meaning of [F] is still very obscure. Pareto’s clarifications were utterly unsatisfactory wherever he dealt with it (1909, App.; 1916; 1966, VIII). The very few commentators have not improved the situation. None seems to have raised the issues of ophelimity indeterminacy which would naturally come up in connection with [F]. The claim of M. Allais (1968, p. 405) that he has computed d2 [F] is unavailing, for he has not considered the functional transformation F(f). However, if [F] is applied to every commodity, the ophelimity indeterminacy is eliminated. Consider the case of two individuals and two commodities; from [ϕ(x, y)] = 0, [ψ(w, z)] = 0 and x + w = a, y + z = b, it follows
$$ {\phi}_x/{\phi}_y={\psi}_w/{\psi}_z, $$
(3)
which is the equation of the contract curve – the locus of Paretian optima. It may be well to note that his procedure cannot be applied for the optimal distribution of a single commodity. For Bananaland the optimal distribution of bananas requires cardinal and additive utility, a curious result.

See Also

Bibliography

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Nicholas Georgescu-Roegen
    • 1
  1. 1.