Rothard writes:
if, because of feelings of friendship or hostility, receiving berries from Crusoe takes on a different quality from that of receiving berries from Jones, the two packets of berries are no longer of equal serviceability to Jackson, and therefore they become for him two different goods. If these feelings cause him to sell to Jones for 4,000 berries rather than to Crusoe for 5,000 berries, this does not mean that he chooses a lower price for the same good; he chooses between two different goods—berries from Crusoe and berries from Jones. Thus, at all times, an actor will sell his product at the highest possible price in terms of the good received.
I'm not sure that this works, at least in the way it's written. Hypothetical: I'm on an island, The only other islander has loads of cows. I have lots of berries. We're going to trade. I can usefully keep two cows. Any extra cows beyond two will result in greater psychic cost for me than they will deliver psychic revenue (because of diminishing marginal utility vs the hassle/labour of keeping or disposing of unwanted cows). So in this case i will happily trade 1000 berries for two cows, but I won't accept three cows. I'm suspecting that Rothbard would want to claim that the third cow is somehow a different good to the first two. But I don't think this claim can be made to work. What say you?
my current take on it
each cow is a different good
the highest good you could receive is 2 cows. 1 cow is less good, 3 cows is less good. perhaps this would mean you would try and give and negotiate how many berries you give for the two cows and negotiate so you give up less berries. to me it looks like it just means a person trades the highest subjective value to that person.
here is a example that does not involve berries
if two stores sell the same shirt, one is a local store where friends hang out and i have a good relationship with the owner and they give me business, and the other in a chain global corporation that i don't have the same relationship with, i can feel better paying more for the local store. on the business flip side of this of selling product, the local store could sell to the person for less than the chain store because they know that will in turn generate more business for the store in the long run.
to me it looks like it just means a person trades the highest subjective value to that person.
Right, but Rothbard's saying something different. he's explicitly saying that a seller will try to get the highest price in terms fo the good received. And this looks to be false, unless we say that each additional unit of a good is in fact a seperate good (it has a different serviceability because of decreasing marginal utility), but this approach would mean that there could be no such thing as a supply, only individual hetrogenous goods.
it could be feelings over quantity. a lower quantity can be a higher quality depending on who buys the customer is. selling to a prefered customer is better than selling to one with less of a relationship. i'm not sure if he is talking about units at all, but who the buyer is and the relationship between buyer and seller
perhaps there is no such thing as supply, as supply holds factors constant that in the real world of trade are not constant. that could also depend on the sellers choice and buyers choice, based on the discrimination that each have when buying or selling. if it's just pure numbers, then supply can be there as all else is constant and it's just high idder that wins the sale
Rothbard talks at length about your point in Chapter 1, Section 5b, the law of marginal utility.
Key phrase: It is evident that things are valued as means in accordance with their ability to attain ends valued as more or less urgent. Each physical unit of a means (direct or indirect) that enters into human action is valued separately. Thus, the actor is interested in evaluating only those units of means that enter, or that he considers will enter, into his concrete action. Actors choose between, and evaluate, not “coal” or “butter” in general, but specific units of coal or butter. In choosing between acquiring cows or horses, the actor does not choose between the class of cows and the class of horses, but between specific units of them—e.g., two cows versus three horses. Each unit that enters into concrete action is graded and evaluated separately. Only when several units together enter into human action are all of them evaluated together.
My take on what he means: Sometimes two things that look alike may be totally different [Jones' berries and Smith's berries]. Also sometimes people that inhabit the very same body may be totally different people. [You when you have zero or one cow vs. you when you have two cows. When you have no cows you feel a certain way about cows, i.e. you want another. When you have two cows you are a changed man. The cows have not changed, you have. Your need for cows has been satiated.]
In the Smith and Jones berry case, you are the same person. nothing about you has changed. the difference must lie in the berries. In the cow story, all the cows are the same. Whichever cow was offered when you had zero ro one cows would have produced the same reaction with you. When you have two cows, again they all make you react the same way. The difference is that you are different. Your subjective need for cows has changed drastically.
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It's easy to refute an argument if you first misrepresent it. William Keizer
But if they want to give you three cows for 1000 berries, why would you accept two cows for 1000 berries, instead of trading them 999 berries for two cows? That two cows represents a greater profit to you than three cows is all well and good, but can you not maximize your profit further by haggling down the price of the two cows, that is by increasing the price of your 1 berry (to 1/1998th of the two cows you are after instead of a mere 1/2000th of them)?