Gunnar Myrdal’s critiques on utility theory. Some implications,

This essay deals with the array of criticisms to the theory of utility contained in The Political Element. These criticisms take up the whole chapter IV and are hard going for the contemporary reader, as for that matter is the entire book. The essay provides an ordered review of all the critical issued raised by Myrdal. Firstly, Myrdal’s criticism concerned a logical error in the economic reasoning of the utility theorists. This error was important because it helped him to disclose the presence of an ideological element in the development of economic theory. Although its importance, Myrdal did not considered this argument decisive in challenging the marginalist theory of value and concentrated on other critical issues instead. He criticised the marginalist hypothesis on human behaviour (that human beings are attracted by pleasure and repelled by pain), arguing that it was an interpretation which preceded the observation itself, and he sought 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 the criticisms set out in chapter IV, developed a distinctive view of economic science close to those of the classical economists, and he anticipated the analytical risks that the discipline might incur if it failed to account of the contributions of the other social sciences.