Gunnar Myrdale's critiques of utility theory. Some implications

Abstract

This essay provides an ordered review of all the criticisms to the marginalist theory of utility contained in The Political Element of Gunnar Myrdal. Firstly, Myrdal’s criticises the marginalist hypothesis on human behaviour (human beings are attracted by pleasure and repelled by pain), arguing that it is an interpretation which precedes observation, and seeks to demonstrate its groundlessness by drawing on advances in psychology. Also, in Myrdal’s opinion, the theory of value based on utility is affected by a circularity of reasoning and contains an untenable assumption on the continuity of psychological functions and on rationality. Myrdal, also because of these criticisms, developed a distinctive view of economic science close to that of classical economists, and anticipated the analytical risks that the discipline might incur if it failed to allow for the contributions of other social sciences.