Bernard Shaw's Remarkable Religion: A Faith That Fits the Facts

158 Bernard Shaw’s Remarkable Religion
jargon for “desirability” and represents an attempt to quantify what is
essentially subjective. It also varies considerably according to circumstances.
It refers to the amount an individual would be willing to pay for an
item if there were a choice between paying that price and doing without.
You do not have to think about it much to realize that for most of us a
gallon of unpoisoned water has far greater Utility than a flawless twentycaret
diamond. Or at least it would if we did not have any water. If we
already have an unlimited supply (or even a very large supply) the case is
altered. If water is so plentiful that it can be had for the asking, its price
(and in this technical sense, its Utility) is nothing. So there really is no
such a thing as a fixed, “intrinsic” value for anything, because desire for
something varies as circumstances vary but certain things (like drinkable
water) are more likely to have greater Utility than others.
Utility is the highest price you would pay if you had no other choice and
is clearly a better indication of the importance of a commodity (or service)
than is its price, but it is also fluid and variable. It varies not only between
individuals but also from moment to moment for a single person. A loaf of
bread has more Utility to a starving man than to the gentleman who has
just gotten up from a huge Thanksgiving dinner. But once that starving
man has devoured his first loaf of bread, the next will have less Utility and
the one after that even less. If he keeps getting more bread, eventually
even the (once) starving man will reach the point at which he cannot stand
so much as to look at another loaf of bread. It now has no Utility at all. And
this change in the Utility of an item does not follow a smooth, continuous
line. Think about what Utility a particular item, say an umbrella (to adapt
an example Shaw uses), has for you. If it looks like rain, and you do not
have one, you might be willing to pay, say, ten dollars for an umbrella. A
second umbrella is much less attractive: you might give a dollar. It might
be nice to have a spare. But a third one would not rate more than the smallest
of small change—perhaps a nickel.
Utility is exceedingly important because it is the basis of the “law of
supply and demand” that the capitalist economists are always citing. To
understand it is to understand that supply and demand is not the simple
matter the capitalist would like us to imagine. I will illustrate with a purely
hypothetical example. Let us suppose that you are walking about town,
doing weekly shopping, and you notice that it looks as though it might
rain. So you head for the nearest mall to buy an umbrella and miraculously
find there are three umbrella stands that reflect the different Utilities
that an umbrella might represent to you personally. One has a sign