gossen economic theory

The creator, human conduct and themaximisation of utility in Gossen’seconomic theory

Philippe Steiner

1. Introduction

Mankind, once you have recognized completely and entirely the beauty of this plan ofthe Creation, steep yourself in adoration of the Being, which in its incomprehensiblewisdom, power, and goodness has been able, by means apparently so insignificant, tobring about on your behalf something so enormously and incalculably beneficial.Make yourself worthy of all that this Being has showered upon you, organizing youractions for your own benefit in such a manner that this most desirable result isbrought about as quickly as possible. (Gossen 1995 [1854]: 299)

The book Hermann Gossen published in 1854 – Entwickelung der Gesetze desmenschlicher Verkehrs und der daraus fliessenden Regeln fur menschlichenHandeln – is a unique text in political economy, not only because of thislast paragraph quoted above. According to his nephew and biographer,Hermann Kortum (1881), Gossen only took one course in CameralisticScience at the University of Bonn – later, whenever he remembered histeacher he could not help laughing – and a course in political economy(Staatswissenschaft) at the University of Berlin.1 Gossen’s formal economictraining was thus very limited; and his book does not refer to one

Address for correspondencePhilippe Steiner, University of Paris-Sorbonne, Mason de la recherche, 28 rueSerpente, 75006, Paris. France; e-mail: [email protected] Taught respectively by P. K. Kaufmann and Johan G. Hoffmann (Georgescu-

Roegen 1983: xxviii–xxix). Gossen read Rau’s textbook Lehrbuch der politischenOekonomie, a very diffuse work on which some notes by Gossen have beenfound (Georgescu-Roegen 1983: lxxii–lxiii). See Tribe (1988) for an accountof the transformation of German economic discourse during Gossen’sformative years, and on the role of Rau in the diffusion of political economyin Germany.

Euro. J. History of Economic Thought 18:3 353–379 August 2011

The European Journal of the History of Economic Thought

ISSN 0967-2567 print/ISSN 1469-5936 online � 2011 Taylor & Francis

http://www.tandf.co.uk/journals

DOI: 10.1080/09672567.2011.588000

economist. On the other hand, he did have a solid grounding in appliedmathematics, something quite rare for the time, specialising in astronomy;and this background was put to good use in the actuarial calculations hemade for the life assurance company that he founded in Cologne in 1849(Georgescu-Roegen 1983: l–li).

The book seems to have been a complete flop since, two decades later,those who rescued this essay in the mathematisation of political economyfrom utter obscurity had great trouble finding any copies. This is perhapsno great surprise if one considers that another very original writer, Antoine-Augustin Cournot, met with almost no response to his own fundamentalessay in mathematical economics, despite his being much better connectedwith the world of education, mathematics and philosophy (Cournot 1974[1838]). Nonetheless, Gossen was one of those authors who, as FriedrichNietzsche so fittingly remarked, experience a posthumous birth; in thiscase, thanks to William Stanley Jevons and Leon Walras, two marginalisttheoreticians seeking their predecessors in the mathematisation of politicaleconomy. Walras even went so far as to translate the work into French, butit took more than a century before this translation was actually published.2

Once Gossen had been taken in hand by these godfathers he came to theattention of mathematical economists, and then economists in general,especially for his demonstration of the laws of economic behaviour –particularly ‘Gossen’s second law’, which established that the agentmaximised his utility by equalising marginal utilities weighted by theprices of specific consumed goods.

But all the same, reading this book can be surprising for a reader awareof the hiatus separating the increasing number of commentators whofollowed in the tracks of Jevons and Walras (Edgeworth 1896; Hayek 1927;Bagiotti 1955; Bousquet 1958; Georgescu-Roegen 1983, 1985; Niehans1987; Van Daal et al. 1995) from the marked theological dimension of thework (Kurz 2009 being an exception).3 This dimension was eliminated inseeking to establish Gossen’s originality, his status as a ‘precursor’, hiscapacity to think ahead of his times (Georgescu-Roegen 1983: xi).4 True,

2 The translation was completed in 1879 by Walras and Charles Secretan.3 We know almost nothing on Gossen’s religious beliefs: he was raised in the

Catholic faith by a mother who was a strong believer, but then broke with thisfaith (Bousquet 1958; Georgescu-Roegen 1983). Recently, scholars have shownthat a connection between religious thought and economic thinking was quitecommon throughout the nineteenth century (see Bateman and Banzaff 2008).

4 Towards the end of the nineteenth century, Francis Y. Edgeworth came round toJevons’ (1965 [1879]: xxxv) own view that: ‘These [religious] speculationsappear to be, as Jevons says, of inferior merit. Gossen is guilty of a fallacy towhich mathematical economists are peculiarly liable: what may be called the

Philippe Steiner

354

faced with this wonderful example of a multiple discovery – to use RobertMerton’s terminology – readers like Jevons and Walras, especially Jevons,must have been surprised to see how their own findings had beenformulated nearly two decades previously by an entirely unknown self-taught economist. They needed therefore to put in perspective theirrespective work so that they might establish an history of the project for amathematical formalisation of political economy, and hence mark off theirown originality – Walras (1885, 1990 [1896]) was especially mindful of thispoint. Mathematics had expunged the Creator from Gossen’s book –which, as we shall see, runs entirely counter to Gossen’s own conceptions.

It is possible to follow Walras and place the work of Gossen alongside thatof Cournot, both writers contributing to the transformation of economicdiscourse into mathematical form. But this would ignore exactly what setsGossen’s work apart from Cournot’s: the obsessive presence of religiousreference in Gossen’s book. Contrary to the commentators cited above, wewill not treat Gossen’s religious rhetoric as inconsequential, but rather as anessential ingredient of the message that he seeks to convey.

Consequently this essay begins with a brief presentation of Gossen’sreligious rhetoric, placing emphasis upon its connections with themathematisation of political economy and the rules of conduct for therational agent (Section 2). Following this, a justification will be advancedfor the historical nature of the importance that should be given to thereligious rhetoric employed by Gossen, recalling a founding moment ofmodern rationality to be found in the writings of Leibniz (Section 3). Inconclusion, a justification of the theoretical nature of this rhetoric will beoffered. Gossen’s rhetoric does not just betray the age of a text in which anoriginal genius was able to ‘think in advance of his time’; nor is it just a

‘‘illicit process’’ from the principle of utility in economics to utilitarianism in thephilosophy of conduct. The logical error is aggravated in the case of Gossen by acertain pedantry and want of humour. His strength lay only in the moremechanical portions of his mathematical theory’ (Edgeworth 1896: 233). Morerecently Niehans has echoed the same judgement on the rather disconcertingaspects of the Gossenian sermon: ‘Competitive equilibrium was for him muchmore than an economic theory or an ideology; it was the gospel, revealing theperfection of a benevolent creator. For him, the ‘‘invisible hand’’ was not adidactic metaphor, but religion itself. Today, this apotheosis of competition, inlanguage closer to revival meeting than to scientific discourse, strikes one asbizarre’ (Niehans 1987: 551). This strategy of relegation can be contrasted withone that simply maintains a studious silence in regard to the religious dimensionof Gossen’s thought (Walras 1990 [1896]; Hayek 1927; Schumpeter 1954;Georgescu-Roegen 1983; Van Daal 1993; Van Daal et al. 1995). A partialexception is to be found in the way that Georgescu-Roegen asks whether theCreator follows the rules of Gossenian optimisation (Georgescu-Roegen 1985).

Creator, human conduct and utility in Gossen’s economic theory

355

mode of expression that one can safely erase in placing Gossen in the sameplane as Cournot. This rhetoric presents a central characteristic of politicaleconomy as a human science: what Michel Foucault (2004 [1978] and 2004[1979]) called the culture of self-typical of modernity (Section 4).

2. The Creator, Utility and Human Conduct

Religious rhetoric is a constant part of Gossen’s text, especially in theintroduction (the preface and first chapter) and concluding the third (theclose of Chapter 18) and fourth parts (Chapters 24 and 25).5 These finalpassages carry the rhetoric to quite florid heights where nothing less thanthe transformation of the world into paradise is at stake.

The fourth and final section of the work is aimed at economic and socialapplications which seek to demonstrate that the demands of socialists andcommunists can be met by following the rules of conduct deduced from thetheorems outlined in the preceding sections. It is also at this point thatgovernment appears in a text that, until then, had only talked of individualsand the Creator. Economic institutions established by the government arethe means by which the individual is confronted with his Creator, presentedhere in the form of laws of nature, something quite rare in the text as awhole, but quite in keeping with the initial presentation:

The measures proposed in this book [education, monetary policy, rational use oflands] can remove from the individual who is attempting to conduct his life inaccordance with the laws of nature all the obstacles that cannot be removed by oneperson’s strength alone. Once these measures become effective, each person needonly make the most appropriate use of his own capabilities in order to obtain both thelife pleasure corresponding to his services to the community and also his largestpossible life pleasure. This will become apparent when we contemplate theconsequences of the measures set out. (Gossen 1983 [1854]: 296)

The measures in question, and particularly the repurchase of land bygovernment through the appropriation of the rent of land, turn on the wayin which individuals have a very special position with respect to thecommunity. Not being able to invest in land, the surplus in the possessionof individuals is employed instead for the purchase of annuities; that is, toprovide for insurance against old age. Furthermore, as soon as the true

5 Gossen’s original text was not divided by chapter or part. The Frenchtranslation on which this essay is based was made by Walras and Secretan, whodivided the text, a procedure followed by the English translator a centurylater.

Philippe Steiner

356

religion of the Creator becomes known, the aspiration of passing on apatrimony at death disappears, for: ‘according to the true religion of theCreator, it is the duty of each individual to obtain income by his own work’(Gossen 1983 [1854]: 297). The community that Gossen thinks of in hiseconomic theology6 has no other source of inequality than that arisingfrom individual characteristics and the effort put into their cultivation,while gains are nothing but the just rewards of contributions made to thecommunity:7

[. . .] each individual will be rewarded according to the services that he has provided formankind. And thus we discover that [the] law which determines the maximum of life pleasure forall mankind, is carried to the point where this maximum now also agrees with the varyingservices performed by individuals for the welfare of all. We observed, moreover, that eachindividual will voluntarily increase the quantity of his work to a maximum if he isplaced in a position in which he must obtain, and also can obtain, by its own effort hispotential life pleasure. Hence once the situation described is brought about, theentire quantity of means of enjoyment produced by the human race, and thecorresponding quantity falling to each individual, reaches its maximum. Then there isnothing further wanting in the world to make it a perfect paradise. (Gossen 1983[1854]: 298; original emphasis)

The final chapter returns to the factor that lies at the heart of this entireconstruction, which, to say the least, lacks nothing in scale. Like naturalorder, human order has its own law: the wisdom of the Creator hadforeseen the law of gravity in respect of matter, and the law of diminishingscale of pleasure for the individual (Gossen 1983 [1854]: 299) – thelatter has been called ‘Gossen’s first law’. This law has the effect ofgenerating a rule of egoism such that God employs this for the good of thecommunity:

In its beautiful fashion did the Creator know how to remove the obstacle that egoismseems to oppose to the welfare of society and to bring about through this egoismexactly the opposite; He made egoism the sole and irresistible force by which humanity mayprogress in the arts and science for both its material and intellectual welfare. (Gossen 1983[1854]: 299; original emphasis)

6 This expression borrows from Carl Schmitt’s (1988 [1922], 1972 [1932])concept of ‘political theology’ and it has here a similar meaning: it is intended todemonstrate a structural homology between two domains of discourse.

7 That is reinforced by Gossen’s proposal to nationalise the land so that its usemight be optimised for the human community. Once governments exist that arecapable of ruling according to the laws of human nature that Gossen expounds,once individuals are properly shaped, then only the physical location ofindividuals will impede the optimal use of human and social forces; Gossen alsosuggested the repurchase of land by the government and its allotment to thoseoffering the highest rent for its employment (1983 [1854]: 287).


357

This explains why Gossen directed his criticism of moralists to theirerroneous understanding of egoism; moralists, he argued, consideredegoism to be a force that menaced the very existence of society, and washence a force that must be denied (1983 [1854]: 207). Hence they ascribedto:

. . . the Creator of the universe such dilettantish work as ever a human machine makerwould be ashamed to deliver. A human machine maker would not think ofconstructing a machine that – after his completion – would have no source of powerto put it into operation. (Gossen 1983 [1854]: 207)

Gossen could not support a position of such absurdity from the theologicalpoint of view; for him, creation is perfect (set in bold characters), so much sothat he dismisses all revelation other than that creation is itself ‘a book of lawopen to each individual’ (1983 [1854]: 208). There follows a series ofanalogies in which Gossen maintains that the dogma of this religion is givenby the laws of nature; the moral principle is that of the maximisation ofpleasure on earth; worship entails the obligation to gain knowledge of theselaws and acquire the capacity to conform to them; sacraments areexperiences in which the truth of these laws is demonstrated; and thepriests of this religion are those men who have succeeded in discovering anew law.

The exhortation with which Gossen closes his text, and which we placedin the epigraph heading this essay, has therefore to be taken quiteseriously. To understand how such an exhortation could be presented,and, above all, to understand what is at stake in this economic theology, weneed to review the introductory pages of Gossen’s book, and his theorems.

Gossen introduces his subject in a manner entirely characteristic for theperiod, yet also marking his great originality in reforging a connectionmade for the first time by Leibniz at the beginning of the eighteenthcentury, but which had since unravelled: mathematics and a precise visionof rationality as the maximisation of a function, utilitarianism and asystematic conception of human conduct.

In his preface, Gossen names Copernicus, Kepler and Newton (1983[1854]: cxlvii).8 These references have many ramifications, but mostimmediately it serves to make a link between the contribution theserenowned thinkers made to the study of astronomy and his own in thesubject of political economy. With the image of Copernicus – with whomGossen compared himself, hence leaving space for more profound

8 Gossen does not cite one economist in the entire text, which it would have beenof benefit to do, for it has been said that some of them anticipated his ownresults, in particular Condillac.

Philippe Steiner

358

thinkers – Gossen sought to discover the law that made human societypossible:

I believe I have accomplished for the explanation of the relations among humanswhat a Copernicus was able to accomplish for the explanation of the relations ofheavenly bodies. I believe that I have succeeded in discovering the force, and in itsgeneral form also the law of the effect of this force, that makes possible thecoexistence of the human race and that governs inexorably the progress of mankind.And just as the discoveries of Copernicus have made it possible to determine thepaths of the planets for any future time, I believe that my discoveries enable me topoint out to man with unfailing certainty the path that he must follow in order toaccomplish the purpose of his life. (Gossen 1983 [1854]: cxlvii)

There is nothing especially original in this reference since it had beenmade more than half a century previously as the emerging social sciencessought for themselves the success that Newton had had with his universallaw of gravitation: the works of Henri Saint-Simon (1966 [1803], 1966[1808]; see as well Gouhier 1964, 2) and, above all, Charles Fourier (1967[1808], 1973 [1829]) exemplify this infatuation in the first half of thenineteenth century. Gossen instead chooses to compare himself withCopernicus, a superseded scientific figure; nevertheless, he places himselfwithin a scientific revolution. What this Gossenian revolution might be, ifrevolution it is, has yet to be specified.

The first chapter gives the impression that Gossen had some illusionsabout his originality. His point of departure is none other thanutilitarianism, a utilitarianism less exact and less sophisticated than thatof Jeremy Bentham (1948 [1789]), lacking the initial assertion in Principlesof Morals and Legislation that links the behaviour of the individual and thatof the legislator, and which leads to a close examination of the techniquesof government (legislation) likely to produce the desired social effect ofutilitarian behaviour on the part of individuals. At the same time Gossenmakes no reference to that current of eighteenth-century thinking whichhad linked religion and utilitarianism, in the work of William Paley (1810[1786]) for example.9 The Gossenian individual will therefore be utilitarianin so far as it is defined by a search for pleasure, subtracting the troublesand privations brought about by this search, as is stated in the firstparagraph of the first chapter of the text:

Man wants to enjoy life and makes his goal to increase pleasures enjoyed throughoutlife to the highest possible level [. . .] In order to measure the true magnitude of a

9 For an account of this, see James E. Crimmins (1998) and B. Schneewind (1998).Jacob Viner (1972) had already drawn attention to this point in his essays onprovidence and social order.


359

specific pleasure, not only must account be taken of its magnitude, but also all thesacrifices imposed by its enjoyment must be subtracted from it [. . .] In other words:Enjoyment must be so arranged that the total life pleasure should become a maximum. (Gossen1983 [1854]: 3; original emphasis)

This rule applies to all individuals, differentiated only by their estimationsof the scale of different pleasures, differences that Gossen related to theirdegree of education and to the obstacles that they had overcome to obtainthis or that pleasure. Gossen differed from Bentham in not contrastingasceticism to utilitarian behaviour. On the contrary, he saw in asceticism anextreme instance of utilitarian conduct, albeit the ascetic person tries tosatisfying himself with other pleasures than those supporting life on earth.Thus Gossen placed utilitarian egoism at the heart of religious thought:

All positive religions of which we have historical knowledge regard this law as anaxiom so incontestably established that they consider it even superfluous to proclaimits existence explicitly when they endeavor, by the promise of punishments andrewards in an afterlife, to keep men on the path that appears right to them. Theyattribute to these punishments and rewards an eternal duration in order to make itabsolutely clear that the total life pleasure to be derived from following the right pathwill truly become a maximum. (Gossen 1983 [1854]: 4)

Gossen concludes from this that the force leading to the desire for utilitycomes from the Creator. Somewhat ingenuously, he dismisses as an error adisregard for this founding reality, together with the associated view thatthe pursuit of welfare and utility is harmful – an error that confounds thepursuit of a maximum of well-being with the damaging consequences ofexcess. This audacious argument allows him to ‘go to the limit’ and in adirect reference Newton and the law of gravity he makes the pursuit ofutility the prime ordering law of humanity:

In the same way that He established order among His worlds [the planets, throughgravitation and its law], He has established order among His human beings [. . .] Inthis way, He made sure that once man comprehends the laws pertaining to theoperation of this force, every individual concerned exclusively with his own personalwelfare must bend his efforts to the benefit of all men in a manner that is best for thewelfare of all mankind. This, therefore, is the force that holds human societytogether; it is the bond that ties all men and forces them by advancing their ownwelfare through mutual exchange to further at the same time the welfare of others.(Gossen 1983 [1854]: 5; original emphasis)

Egoism is therefore made the behavioural principle of the individual, forthat individual and also for the entire human collectivity – this totalisingvision of humanity is one of the characteristics of Gossen’s thinking. Wetherefore have here a conception of the springs of human action very closeto that of Adam Smith, where the argument of the Wealth of Nations deals

Philippe Steiner

360

with the manner in which the individual, to satisfy his own interests, reliesupon the brewer and the baker.10 The language of the egoistical pursuit ofutility is the expression of an anthropological force stemming from thebenevolence and wisdom of the Creator. Gossen even takes advantage ofthe position in which he finds himself. If this benevolent force has a divineorigin, it is odd that humanity had to wait for Gossen to point this out. Todeal with this difficulty, Gossen takes one of the characteristics of the forcein question: just like gravity, egoism is an effectual force independent of theknowledge people might have of it, and evolutionism combined withcustom and innovation permit humanity to arrive at knowledge of that law(1983 [1854]: 155). The Gossenian exhortation therefore simply states that,henceforth, man has only to search for the laws of humanity’s creation, as isprinted in bold characters in the prologue to the first chapter:

Man! Explore the laws of My creation and act in accordance with these laws! (Gossen1983 [1854]: 6)

This exhortation recurs, and is developed in the course of the book: inChapter 7 dealing with exchange and its advantages; in Chapter 17, whichlinks need, pleasure and income; and then in the final two chapters, whichcan be treated as a conclusion.

Finally, the originality of Gossen’s economic theology lies in the limit heperceives within something that seems quite limitless: egoism and thepursuit of utility or of welfare.11 Contrary to those who wished to opposeegoism to some other passion – philanthropy in the case of Saint-Simon(Saint-Simon and Comte 1966 [1821]) or altruism in the case of Comte’sSysteme de politique positive (Comte 1890 [1851–1853], 2) – Gossenimmediately states the principle that utility declines as consumptionincreases. Ever since, this has been known as Gossen’s First Law, as if he wasthe first to have thought of it, although it is in fact a principle known for

10 It is true that Smith associates the interest in and the appetite for domination intaking account of the individual’s motives; Gossen’s anthropology is lesssophisticated and he has no place for such subtleties. The only passage wherethis kind of complexity develops is where he deals with child labour – whichblocks the education necessary to realise the law of human perfection – which issaid to be the outcome of ‘misguided selfishness’ (Gossen 1983 [1854]: 189).

11 This argument is important in the following, since it directly echoes the well-known definition of the spirit of capitalism. As we know, Weber did not regardthe love of gain as anything especially specific to capitalism; on the contrary, hewrote that the specificity of modern capitalism lay in the rational moderation ofirrational impulses with respect to the pursuit of gain (Weber 2002 [1904–1905]:259–60; 2004: 105–6). In this respect Gossen’s argument concerning the dailybehaviour of the egoist is similar to Weber’s regarding the behaviour of thebourgeois capitalist.


361

more than a century (Daniel Bernouilli) but that hitherto had beenrestricted to technical uses (the calculation of expectations in games andthe determination of insurance premiums) without application to politicaleconomy.12 Gossen takes the trouble of elaborating this essential principlewith respect to two of its features, features vital to his whole argument. Firstof all, he writes, the continuous repetition of the same pleasure results in thedecline of its magnitude until satiety is reached; secondly, the laterresumption of this pleasure will result only is a lesser amount of pleasureand a duration likewise diminished (Gossen 1983 [1854]: 6). Learning andculture might modify the magnitudes and durations in question, but willalter nothing in the phenomenon of diminution through repetition. One istherefore presented with a law of great generality, its decisive importancefor an economic theology consisting in its establishment of a boundarymarker and, as a result, a guide for a good and desirable life on the part ofboth individual and community. Gossen states this clearly before moving onto the calculations proper:

The law of the decrease of the magnitude of pleasure thus applies without exceptionto all pleasures, intellectual as well as material. Just because the Creator made the capacity toenjoy, the desire for enjoyment, subject to this law. He made it possible for this desire to bringabout such results as have been suggested in some detail. (1983 [1854]: 8–9; originalemphasis)

It is at this point that calculation assumes its great importance, and we willnow turn to this aspect of Gossen’s thinking.

3. The mathematics and rationality of conduct

Here it will be helpful to reconsider the reference to astronomy madeabove. Gossen dealt with this in an idiosyncratic way, since unlike Fourier orSaint-Simon he used this analogy to introduce the idea that had givenastronomy such a decisive role in the elaboration of modern science – themathematical formalisation of the laws of nature.

Gossen knew that the idea of elaborating political economy inmathematical form would be provocative, the more so since few economistshad a mathematical training (1983 [1854]: cxlvii–cxlviii). The foundationof an economic science on the lines of the Copernican Revolution thatGossen claimed for himself was oriented to this training, even if he

12 Joseph Schumpeter (1954: 303–4) does not fail to link Bernoulli to Gossen’sFirst Law. But the difference in the significance of the two propositions remainsgreat.

Philippe Steiner

362

explained that the form (mathematics) should not put off the readerinterested in the contents (economics), since the numerical calculationsprovided enabled the reader to follow the algebraic exposition. Gossenconceived society as a system of forces, and he justified his approach byanalogy with astronomy and physics:

For the justification of this [mathematical] framework, it suffices to observe thateconomics concerns itself with the interplay of a variety of forces and that it isimpossible to determine the resultant effect of these forces without calculus. For thisreason it is impossible to present the true system of economics without the aid ofmathematics – a fact that has long been recognized in the case of pure astronomy,pure physics, mechanics, and so forth. (1983 [1854]: cxlvii–cxlviii)

Just like Cournot (1974 [1838]: 87–96) had done when he claimed thatnon-numerical mathematics were needed to the progress of politicaleconomy, Gossen (1983 [1854]: 10) explained that calculation did notrequire the possibility of measuring empirically the intensity andmagnitude of pleasures. Mathematical analysis is useful since ‘it sufficesto find, from the specific characteristics of space, means by which its partscan mutually relate’ (Gossen 1983 [1854]: 10).

Gossen played down the height of the technical barrier he set up for themajority of his readers,13 which did not make things any easier. Straight-away he presented one particular mathematical tool, the determination ofthe extrema of a function, at that time still part of higher mathematicaleducation. But once more Gossen refused to admit that this might prove animpediment for the reader:

Only on a few occasions, when a maximum or a minimum had to be determined, wasit necessary to depend on more advanced mathematics [than that taught in secondaryschools]. But this will in no way affect the comprehension of the exposition; thereader need not be able to follow in detail the calculation of this maximum orminimum, for in such cases an effort was then made to show its existence in adifferent manner. (1983 [1854]: cxlviii)

Gossen made repeated reference to numerical calculations illustrative ofthe algebraic results. But in spite of his efforts, understandable though theymight be, one can doubt the reliability of such statements. On the onehand, this tool went back to Newton’s mathematics (and also thatof Leibniz, since in Continental Europe it was the Leibnizian formalismof differential calculus that was adopted, and not the Newtonian calculus of

13 Gossen suggested putting the teaching of mathematics on a par with thelearning of natural language: for it was in this very precise language that the truereligion of the Creator could be understood (1983 [1854]: 215–17).


363

fluxions), and not to Copernicus’s mathematics. On the other hand, areading of the book quickly shows that the study of extrema is notredundant or adventitious, but is an essential foundation for the author’seconomic logic, and for the rationalisation of the conduct of theindividual’s economic life.

But why introduce a calculation requiring the study of extrema? We needto stop here and consider the problem that makes this mathematicaltechnology necessary. This amounts to the fact that at the base of the law ofdiminishing pleasure Gossen put an individual who chooses underconstraint on the one hand, but who is capable of development on theother. This is shown quite precisely in the three theorems stated in the firstchapter:

1. With each specific pleasure, there is one definite manner of enjoyingit, determined chiefly by the frequency of the repetition of thatenjoyment, that will lead to a maximum of pleasure. Once thismaximum is attained, the total pleasure decreases with either moreor less frequent repetition.

.2. In order to maximize his total pleasure, an individual free to choose

between several pleasures but whose time is not sufficient to enjoy allto satiety must proceeds as follows: However different the absolutemagnitudes of the various pleasures might be, before enjoying thegreatest pleasure to satiety he must satisfy first all pleasures in part insuch a manner that the magnitude [intensity] of each single pleasureat the moment when its enjoyment is broken off shall be the same forall pleasures.

3. Man has the possibility of further increasing his total life pleasurewhen prevailing circumstances permit him to discover a newpleasure, however small by itself, or to increase an already knownpleasure by developing himself or, alternatively, affecting theexternal world. (Gossen 1983 [1854]: 13, 14 and 25)

The first two theorems define the individual with respect to choice: achoice between the ways of enjoying the same good according to the mostfitting temporal order, or a choice between different available goodsconstrained by time. In the first case, the constraint bears upon availableenjoyments (there is only one) and the aim is to employ the good toprocure enjoyment in such a way that repetition and interruption over timeprovide the greatest enjoyment possible. In the second case, closer to theinterests of the economist, choice is made with respect to different goods in

Philippe Steiner

364

order to procure the enjoyment of absolute magnitudes under a timeconstraint, which implies that one cannot arrive at condition of satiety in allenjoyments within the time available. The aim is therefore to choose goodsin such a way that one derives the greatest possible enjoyment, knowingthat one will not be able to draw all possible enjoyment from all of thegoods.

So far this presupposes a static state: the faculty of enjoyment, availablegoods and time are all givens. The third theorem introduces an element ofdynamism by increasing the prospect of modifying the capacity ofenjoyment through the individual’s own efforts, by a ‘culture of the self’,or through the range of goods made available through work, which involvesthe action of the individual upon nature. It is this last point that makesGossen a nineteenth-century thinker, in that he integrates in his intellectualconstruction the idea of individual and collective progress via educationand industry. This feature opens the door to the reflections in Chapter 2and to those theorems bearing upon the composition of work – which is apleasure in respect of the activity it secures but then also a pain with respectto the fatigue that the repetition of activity brings. Following the same logicfor the choice between two pleasures, Gossen states:

In order to maximize his life pleasure, man must distribute his time and energyamong various pleasures in such a way that for every pleasure, the intensity ofpleasure of the last atom produced shall be equal to the magnitude [intensity] of thediscomfort experienced by him at the very last moment of his expenditure of effort.(1983 [1854]: 53)

The general principle advanced here by Gossen is therefore as follows:the use of goods generates pleasure, up to the point of satiety throughrepetition; such uses should be combined in such a way as to draw themaximum possible pleasure, given either that the number of goods islimited (also taking account of the possible augmentation of this numberthrough labour), or because time is limited (likewise taking account of thefact that this duration can be extended thanks to the greater intensity ofpleasure acquired through education). The problem cannot therefore bereduced to one or the other form of addition of goods and pleasures –rather, a combination in the use of goods has to be determined such that noother combination yields a greater sum of pleasure. This is a problem offinding a maximum, involving the techniques required for finding extrema,the search for the best position among all those that are good anddesirable, the opitimum optimorum. Since Gossen does not study second-order conditions the problem is solved through the cancellation of the firstderivative, or the partial first derivatives, of the mathematical functionrelating pleasure to the goods employed by the individual.


365

It is for this reason that maximisation is not a purely accidental elementin the book, but is rather rendered a constitutive element by the fact thattheorems are mostly – not the case with theorems 1–3 – expressed in termsof marginal quantities. It is especially true that that the theorem known asGossen’s Second Law, passing from the conduct of the isolated individualto that of the individual in society, makes use of money and then price instating the rule of conduct:

As everything is exchangeable for money, money becomes the common yardstick forthe determination of the various p in our notation [the length of time necessary tobring pleasure for their initial value to 0]. Man obtains the maximum of life pleasureif he allocates all his earned money E between various pleasures and determinates thee [length of time for enjoying a given pleasure] in such a manner that the last atom ofmoney spent for each pleasure offers the same amount of pleasure (Gossen 1983[1854]: 108–9; original emphasis)

There is, from this point of view, perfect continuity between thebehaviour of the isolated individual and social behaviour: we could alsosay that social behaviour is only an extension of the maximisingbehaviour of the individual based upon the law of diminishingpleasure.

This understanding of conduct underlying political economy leadsGossen to address himself to economists – which is uncommon in hisbook – to demonstrate their errors to them, and the means for theiravoidance. Gossen understands the utility of a good as an entitycontextualised by the moment of consumption, and not as an inherentproperty of the good, permitting him to conclude that there is no suchthing as absolute value, contrary to what economists believed whenever theydeigned to make any calculations. Value is like the ‘evanescent quantities’used in higher mathematics:

In the matter of value, economists have found themselves in a still worse situationthan mathematicians found themselves with respect to the number of natural forcesbefore the invention of differential and integral calculus. Not only does mathematicalanalysis per se cause insuperable difficulties for most economists, but here they wouldbe obliged to work with a magnitude that constantly keeps changing in their hands,and that would therefore slip too frequently away from them, or disintegrate intonothing just when they thought they had taken hold of it (1983 [1854]: 108–9;translation modified)

Seen in this light, Gossen’s approach is a hymn to the technique ofmaximisation founded upon differential and integral calculus. But this typeof mathematics, linked directly to the scientific revolution of the laterseventeenth century, was given a powerful metaphysical significance by one

Philippe Steiner

366

of its inventors, a significance that Gossen picks up precisely through hisreligious rhetoric.

Leibniz gave maximisation a metaphysical role in his Theodicy since, forhim, higher mathematics presented the rationality of divine behaviour in anew form. Confronted with the classical problem of evil existing in a worldcreated by an infinitely good and far-seeing God, Leibniz explains that,among the infinity of possible worlds that God could create, there is onewhere evil was minimised for the sake of the good produced according to asmall number of general laws, without God being obliged to intervenethrough miracles. According to Leibniz, this theological problem is similarto the search for the maximum (or minimum) of a function.14 In doingthis, Leibniz defines a new form of rationality of behaviour (Steiner 2005/2011: 209–12): all behaviour is rational, good and desirable that can beconstrued in this mathematical form, and which is therefore analogous tothe mathematical search for an extremum.

It is clear to Leibniz that this behaviour is not limited to the descriptionof God’s behaviour. For Leibniz, the new doctrine of rationality applies toevery wise man, and more generally to all action that is wise (that of thelegislator, the judge, and so forth) or instrumental (that of the goodarchitect, the good artisan), as is shown by the analogies presented in theTheodicy. Leibniz went on to radicalise this thesis in the metaphysicalwritings composed at the end of his life, especially in his Monadology. Thissecures the generalisation of this form of rationality by rendering men‘little gods’ (monads) differentiated from the Creator only by their limitedcognitive capacity.

In this respect Gossen’s thinking can be considered an application ofLeibniz’s vision, where the essentially religious world of the seventeenthcentury in which that great thinker moved had become, since theeighteenth century, a world progressively dominated by an economic

14 The key passage in which Leibniz explains what he calls ‘the principle of thebest’ (Leibniz 1969 [1710]: 44) or ‘principle of suitability’ (Leibniz 1986 [1714]:51 and 103) is the following: ‘However this supreme wisdom, joined to agoodness no less infinite, cannot fail to choose the best. For just as a lesser evil isa species of the good, a lesser good is itself a species of evil if it obstructs a greatergood; and it would be something needing correction in the actions of God, ifthere were ways of making improvements. And as in mathematics, when there isno maximum nor minimum, nothing can be distinguished, everything is madeequal or when that is not possible, nothing results at all; one can say the samething about perfect wisdom, which is no less regulated than mathematics, hadHe not found the best (optimum) among possible worlds, God would haveproduced none’ (Leibniz 1969 [1710]: 108, x8).


367

vision.15 Gossen’s book is therefore a systematic presentation of theeconomic rationality characteristic of the modern individual. Two furthercomments, of differing levels of importance, can be added to this.

Firstly, in making reference to industry, and in theorising the industriousbehaviour of the individual rather than simply exchange behaviour, Gossenbrought into modern economic rationality the dimension that had beenintroduced in the 1820s by Saint-Simon, the Saint-Simonians and AugusteComte, and which led to the idea of progress. Two examples of this may becited. Right at the beginning Gossen notes that the maximum happiness ofhumanity increases as the quantity of labour necessary for this falls, for lesseffort is required to produce the goods that procure the desired pleasure.16

Following this, Gossen, who relies upon custom for the empiricalunderstanding of the proper allocation of expenditures between differentgoods, obliges the individual to follow custom – for this tells the individualwhat to do to achieve the maximum happiness – but also to improve upon itso far as his is capable of so doing (1983 [1854]: 217–18). Once more, thisindustrial dimension is very clear, for Gossen goes on to write:

But even such an individual should be allowed to attempt to improve the custom onlywhen progress in the understanding of the natural laws makes likely the success ofsuch an attempt. (1983 [1854]: 218)

In this sense, Gossen’s economic theology takes over the new dimension ofreligiosity in the nineteenth century; that is to say, the ascendance of theindividual thanks to science and industry, leading to a philosophy ofprogress intended as the realisation of the Creator’s will.

Secondly, as shown by the section where Gossen deals with the socialdimension and human life, economic rationality is, both in Gossen and inLeibniz, closely related to the idea of justice. In the case of Gossen, thisjustice stems from the fact that the social outcome achieved by the searchfor happiness distributes to those parties involved in exchange andproduction remuneration in proportion to the contribution:

After this discussion, the theoretical solution of the problem of how much of eachcommodity should be produced in order that the greatest sum of pleasure begenerated for all mankind, presents no difficulty. This maximum comes about whenexchange takes place according to rule [7.4: equality of the pleasure of the marginal commodityreceived for all individuals] ad when, furthermore, the production of the various commodities is

15 The transition from a religious vision to political economy is dealt with elsewhere(Faccarello and Steiner 2008).

16 ‘Because of this ever present effort [to minimize the amount of work thanks toan improvement in the skill of the workers] humanity has succeeded in makingso many discoveries in the natural sciences and startling inventions for the moreefficient use of the available natural resources’ (Gossen 1983 [1854]: 181).

Philippe Steiner

368

so organized that the last atom produced of each object affords to each individual an amount ofpleasure equal to the corresponding efforts of its production. The proof of the correctness ofthis conclusion lies in the fact that with any other distribution of human effort, lesspleasure, and, hence, less value is created. With the fulfilment of these conditions notonly is a maximum of value created in the end but also each individual receives from thistotal exactly that part for which he can make a fair claim. (Gossen 1983 [1854]: 105; originalemphasis)

Gossen sees in this the practical achievement of the wishes of socialists andcommunists:

The foregoing investigation also reveals that because of the specific construction ofthe laws of enjoyment, the efforts of each individual to maximize his life enjoymenthas the following result after the introduction of money: Upon the removal of all obstaclesthat interfere with not only each person’s purposive use of money but also his choice of productiveactivity that, under the circumstances, is most advantageous to him, each person will receive aportion of the means of enjoyment that corresponds exactly to the burden assumed by him in theproductive process. (1983 [1854]: 114; original emphasis)

Gossen draws the final conclusion from this new theorem, for he addsthat individual remuneration might perhaps be very high if thecontribution is validated by the ensemble of humanity via marketpurchases, or very low if the opposite is the case. In other words, thecatallactic proportion17 between contribution and remuneration can takethe form of ‘producers . . . being put in a position to amass millions like aCatalani or a Paganini’; or, on the other hand, of the Silesian weavers‘succumbing to the typhus brought by misery’ (Gossen 1983 [1854]: 114).Gossen therefore maintained right to the end the idea that commutativejustice was at the heart of the modern world, which implied, as othereconomists said at the time (Dunoyer 1845), and which has since beenrepeated (Hayek 1980 [1973]), a complete break with any social policythat sought to alleviate situations created by the market. In the case ofGossen’s economic theology, there was no place at all for pity andcompassion in the human conduct of the industrial and commercial cityin accordance with ‘the magnificent calculations of the Creator’ (1983[1854]: 157). But, said Gossen, returning to a formulation sometimes usedto condemn the social system, this result was veiled (on account of thecomplexity of the process and the distance separating individuals fromone another) and only implicated each individual in an imperceptiblysmall part of the process:

17 The terminology of Richard Whately, archbishop of Dublin, is taken over andadapted here – catallactics is the term he put forward for the science ofexchange (Whately 1966 [1832]: 6).


369

It is inherent in the magnificent calculations of the Creator that the infinitelybeautiful results desired by Him can be achieved only if the sympathy that He instilledin man as a holy feeling has no influence on the distribution of [the producer’s]remunerations. Because of this, He took care to put a distance between individualsand the consequences of the distribution of remunerations. Either the results of thedistribution of the remunerations escape the individual’s recognition entirely or,where this is not the case, the immediate effects of his personal conduct are soinsignificant in relation to the whole that they do not induce him to act differently.(Gossen 1983 [1854]: 114–15)

Finally, Gossen’s economic theology provides the formula capable ofsatisfying the need for sociodicy, or justification for the situation and well-being of the commercial individual:

[. . .] the Creator has crowned each individual pleasure by giving to each individualthe following awareness: What you enjoy, you deserve to enjoy because the value youhave created for others amply outweighs the trouble caused them by the productionof the means of enjoyment obtained by you. (1983 [1854]: 116)

Gossen’s approach has many profound implications. He is one of thefirst to apply systematically to economic activity (pace Cournot and severallate-eighteenth-century Italian engineers) the modern idea of rationalitystemming, as part of their natural philosophy, from the differential andintegral calculus introduced by Newton and Leibniz at the end of theseventeenth century. Having done that, Gossen extended the powerfulrationalisation of the religious view of the world that Leibniz put forwardin his Theodicy, ending up with a hymn to maximisation by whichmodern economic rationality is defined as an efficacious and just rule ofconduct.

It is therefore of significance that Gossen sought his rhetoric in thereligious domain: a mathematising metaphysics of rational action wasdeveloped there, then applied by Gossen to human action not so as topermit the individual to flee the social world, but requiring him to fullyobey the law that God had inscribed in his daily practice. The religiousrhetoric has a historical meaning, for it is this which allows Gossen toproceed so boldly. Of course, it is possible that this packaging mightperhaps be completely ignored by those who, unlike Gossen, believepolitical economy to be a positive science. Hence the interpretations ofthose economists who, since Jevons and Walras, have carefully skirted thisdimension of Gossen’s work.

One could therefore think that the exhumation of this religious rhetoricis purely a matter for the historian of ideas, for whom an appetite for deadideas carries hardly any implications for the understanding of modern life.But here again, the vigour of Gossen’s exposition requires that we examine

Philippe Steiner

370

its implications from a different angle, rejoining the consideration ofreligion, politics and economics, before in closing characterising the natureand internal practice of the modern economic subject.

4. Rational Economic Behaviour and the Conduct of a Systematic Life

Gossen’s work is important for us in grasping a dimension upon whichWeber and, more recently, Foucault, have laid emphasis in understandingthe nature of the modern subject (Demeulenaere 1996): the economicsubject, or homo œconomicus.

This book, read as a treatise of mathematical economics enunciating theprinciples of an economic science still in its very early stages, has as itsobject the ‘laws of human relations’ and the ‘rules of conduct’ that theindividual must adopt in conformity with the plan of the Creator. Theobject of the work by no means offers a limited vision of economics, butrather a profound and original reformulation of the way in which humanlife might be systematised. Might this formulation be rather too strong?After all, one could object, Gossen does not claim to have presented anaccount of aesthetics, ethics, or politics, all of them essential domains ofhuman life. That is doubtless true, even if one could retort that Gossendealt with asceticism in relation to eudaemonism, a contemplative life andan active life (education of the self and industrial action aimed at renderingman ‘master of nature’). The relevance of this third level of reading isindicated by the way that Gossen’s religious rhetoric traces the content of aconduct of life – conduite de vie recurs in the translation by Walras andSecretan – whose characteristics define the asceticism of the moderneconomic subject.

The simplest way of appreciating this is to return to the three theoremsformulated in the first chapter. What is at stake in these three statements?No less than the way in which the pleasure of the isolated individual mightbe brought to a maximum. How does one get there? By permanentlyapplying oneself to the pursuit of simple rules and for the entire durationof one’s life. In this respect it is a form of asceticism, an exercise in themastery of self, which is of worth to the individual and to society. Theindividual has to conform to the canons of this pursuit of maximal well-being to achieve his own truth, the law defined by the Creator: Here is thecentral point raised by Gossen: utilitarianism is made a form of asceticconduct of life and thus political economy is no longer the materialistgospel of sheer enjoyment and pleasure. To fully enjoy the wealth createdby their industry, men must endeavour an endless and continuous workupon themselves.


371

With the aid of the formulas obtained so far, it is easy to determine what effect achange in the conditions of life enjoyment will have on total life pleasure, and thiswill, in turn, allow us to determine the mode of action for the most completeachievement of man’s purpose in life (Gossem 1983 [1854]: 57)

The first theorem puts forward the fact that repeated use, and theinterruption of pleasures, allows to each who masters this practice ofpleasures to be taken to the maximum that the environment – whethersocial or natural is here of little importance – offers to the individual. Thesecond theorem relates this maximum of enjoyment to ways of choosingbetween different kinds of enjoyment and defines the maximum by theequalisation of pleasure at the margin. The final theorem opens theseprinciples of conduct to application in a world in which the individualbrings effort to bear upon other individuals and upon himself (through themediation of education and culture) and upon nature (industry). Thisleads into the second and third chapters on work, its distribution betweenthe different enjoyments it creates and its duration, that is, the trade-offbetween work and leisure.

Gossen’s thinking about the maximisation of pleasure as the purpose ofhuman life is systematic and bears upon the entirety of human life. It starts ‘fromthe day of birth’ (Gossen 1983 [1854]: 155) with the progressive acquisitionof the skill required to enjoy and to produce goods, a process that involvesone’s entire life, not least because a high degree of foresight is required foroptimal conduct, purchasing future revenue against the time that one’sown powers decline. It bears upon all concrete economic acts that definethe life of the individual; the rhythm of consumption, the choice of goodsconsumed, the trade-off between work and leisure, the duration of work,the choice of goods produced and their quantity, the choice of profession,and so forth. And if one takes into account Gossen’s declaration that ‘manengaged in enjoyment is completely indifferent whether the pleasure iscreated through material or nonmaterial goods’ (Gossen 1983 [1854]: 38)then it seems that this methodical asceticism encompasses social relations,for these are themselves subject to the calculation of enjoyments.

These characteristics of the conduct of social life are repeated when onemoves from the individual level to that of the social. The social levelassumes two forms in Gossen: market and custom. In the case of themarket, Gossen introduces two quite robust ideas to characterise theconduct of life. Firstly, the market provides an opportunity for the activeprinciple, with which the Creator has endowed man, to benefit the humancommunity – which for the most part Gossen treats as a unit (humanity).The market is the place where the advantages of specialisation, throughexchange, facilitates mutual benefit from the work of others; exchange

Philippe Steiner

372

leads to an increase in pleasure, and fulfils the conditions of justice sinceone can only benefit from the labour of others if one reciprocates byproviding them with the same service. Chapter 7, which deals withexchange, argues at length that the pursuit of happiness on the part of theindividual is the force that, taking account of the laws of enjoyment,renders the maximum of enjoyment to humanity. Interest is therefore whatguides the individual: guided by the Creator to the realisation of the divineplan, but also guided by himself since he has to follow rationally andsystematically the rules that will lead him to his end purpose. When Gossenintroduced education as a process that aimed at leading man to the fullrealisation of this end purpose, education becomes a component of themeans allowing realisation of the maximum possible pleasure, henceentering into the founding asceticism of modern economic man and henceinvolving a culture of the self capable of increasing the sum of thesepleasures.18 In this sense, homo œconomicus is, as Foucault says, an individualwho can be governed by leaving him to act freely in the market, and interestis in turn that which makes liberal governmentality possible. Secondly, themarket organised on the basis of choice with regard to expenditure andchoice of profession expresses the truth concerning everyone’s contribu-tion, for in the Gossenian world there are no other sources of revenue, landbeing nationalised and inheritance no longer existing. The purchasingdecisions of all those exchanging express the truth of each individual’scontribution to the totality by setting the level of his commodity income.Following Foucault’s formulation, the market is the space of ‘jurisdiction’and ‘veridiction’ (i.e. the market is an institution that brings about what is‘right’ and what is ‘true’) of modern society (Foucault 2004 [1979]: 34, 37and 258). And as we have seen, Gossen insists that this veridiction cannotconcede to pity or compassion for those who find themselves in wretchedcircumstances.

There is a second element, very important in Gossen’s text, that is moredifficult to fit into the framework that he developed. Confronted with theproblem posed by modification of the magnitudes of enjoyments andvariations in price – hence confronted with the problem of the precise wayin which the diminution of enjoyments can be determined – Gossen runsup against the fact that the extent of happiness assumes that individuals

18 In this respect, Gossen’s approach has elements in common with what becamethe theory of human capital; the relation between the allocation of time andhuman capital is made explicit in the theory developed by Gary Becker (1976[1965]). Georgescu-Roegen (1983: ci–civ) makes some acute remarks on thedifferences between Gossen and Becker – notably that Becker does not takeaccount of the time devoted to the consumption of household goods – as well asnoting their similarities.


373

have realised the optimal allocation precisely allowed for by the theorem inquestion (1983 [1854]: 149–50). Here Gossen leaves hypothetico-deductivemathematical reasoning and enters the domain of statistics and empiricalobservation. The idea is that statistics allows for the compensation of errorand, implicitly, that truth is to be found in the collective, the entirety ofhumanity. This is the reason why Gossen imputes to the individual the dutyof following the behaviour of his fellows to achieve his own ends, themaximisation of his happiness:

This circumstance is so advantageous for the determination of the average value ofthe various observations that it is almost superfluous to devote any special activity tothe measuring of pleasures, as this measure, made for all individual without exception,constitutes a moral law (die Sitte). (Gossen 1983 [1854]: 150; translation modified)

The precise determination of mores is therefore the most important objectassigned to statistics (Gossen 1983 [1854]: 151); Gossen here interminglesthe logic of interest and that of duty, something that is quite exceptional inhis book, which is elsewhere based upon the pursuit of happiness accordingto the motivation with which the Creator has endowed man, of knowingegoistic interest.

This is a remarkable situation for, given that the complexity of thecommodity system generates indeterminacy (choices are modified, whilepersonal interest takes account of magnitudes of enjoyments and priceswhere the latter are subject to independent variation), the solution can nolonger be found by a priori calculation – the equations – but can only bereached through statistical observation of a collective. In the absence of thecertainty that equations give, the individual has, in his own interest, toassume that the collective knows in practice what he himself is unable todetermine scientifically. The outcome is a discourse based upon duty,presented as the best way to follow one’s interest, as is evident throughoutChapter 16 (Gossen 1983 [1854]: 151–6). From this there follows animperative to follow custom, only deviating from this when knowledge ofnatural laws prompts the individual to think there is a strong probabilitythat custom might be successfully improved (Gossen 1983 [1854]: 153).Audaciously, yet logically, Gossen takes from this the idea that thedistribution of revenue between the different heads of expenditure – inthe aggregate sense with which statistics works, such as food, housing,clothing, other expenditures – because it presents the major regularities inthe expenditures made by members of the same class, which then becomesa norm to be followed by the individual, a moral law:

[. . .] the human race long ago proclaimed the moral code requiring that these resultsbe followed insofar as they are thought to be correct [. . .] This proves that the results

Philippe Steiner

374

achieved by measuring pleasures are considered, within these limits, already sosufficiently well established that one may request individuals to follow them, and thusthe results obtained also give a sufficient foundation for a moral law. (Gossen 1983[1854]: 166)

One might well be surprised by this normative dimension in Gossen’sthought, when he could well have sustained a purely individualistdimension, ensuring that the procedure of trial and error through whichactors realised their interest depended upon their subjective choices andan adjustment process through learning, without there being any need toinvoke the moral dimension of this learning process. One should not,however, overlook the consequence of the solution that Gossen providesfor this problem of bounded rationality (incomplete information andcalculative difficulty) as one would say today. The passage throughcollective and moral law in tracking collective behaviour, and thencearriving at his own interest lends, and this is the important point, a visibleand public form to the individual’s capacity to follow his own interest. There is anormative aspect to rational economic behaviour that is quite distinct fromthat which economists have constructed from the work of Vilfredo Paretoand his criterion of optimality.

Hence, given this form of visibility, Gossen’s ascetic utilitarianism is notonly a private matter, but also assumes a dual public dimension, makingroom for what we might call, following Weber, a mechanism for theaffirmation of self before one’s peers, which functions just like themechanism employed by puritan sects to deal with the problem ofadmitting only ‘pure’, ‘elected’ persons to their circle, which adepts haveconstantly to affirm their purity and elect status in front of the othermembers of the group. The first element of this public dimension involvesthe play of competition and its outcome, which is the revenue acquired inexchange for the contribution made by the individual: income received isthe visible social measure of the utility rendered to others, and freelyvalidated by them. The second element concerns the way in which theexpenditure made under different heads of consumption marks thecapacity of the individual to follow the law of the collective, which is theexpression of his own interest, unless he aspires – with or withoutjustification – to improve the collective through superior mastery of naturallaws. This last instance could become a superior affirmation of self beforethe group, as with an entrepreneur who, having changed his habit andcustom, is able to gain higher commercial revenues, which are signs of hisenhanced social utility.

And so the trajectory taken by Gossen’s thought links up, having locatedegoistic utilitarian behaviour in the individual, – the essential forceunderlying his entire economic theology – with a moral law explicitly


375

joined to a practical ethics. The systematicity of modern economic lifetherefore acquires its power from the internal asceticism that the individualimposes upon himself, which he might, or might not, take into account,nonetheless leading to the explicitly individual and social desirable aim ofall existence – the pursuit of happiness. It also gains its force from themechanism, no less constraining for being public, involving the affirmationof self before others, mediated by the comparison of contributions made tosociety (revenue), and the way that spending conforms to the observedbehaviours of others subordinated to the same imperative.

5. Conclusion

Gossen’s book has been read as a work anticipating modern mathematicaleconomics, political economy at last rendered in all scientific purity. Allthat needs to be done is to disregard the religious rhetoric which, from thispoint of view, is a useless encumbrance to the main principles. It remainsan inspired collection of theorems that later research has confirmed,corrected, or proved wrong. This is the reading begun by Walras andJevons, and continued since by many other economists.

From a perspective more interested in Gossen’s conceptual network andthe metaphorical expression of his ideas, this sidelining of the religiousrhetoric seems absurd. Gossen’s religious rhetoric can be seen as the meansthrough which he entered an entirely new field, supported by older formsof human reflection, in this case religious reflection. In this sense Gossen isnot an isolated economist, since one could say the same thing about otherinnovators in this domain. The religious rhetoric might be significant, butnot of such great importance since it depends on a context, at its limitcontingent upon the form of religiosity embraced by a single individual.

There is, however, another reading that can lend sense to this religiousrhetoric, by treating it neither as a negligible residue compared withsubstantive statements, nor a simple convenience, but instead as having ahistorical and contextual date, by means of which a particular individualwas able to express his thought. In the logic of Weber and Foucault, thisreading seeks to extract expressed ideas from the practices, whether real orinvoked, of the mass of individuals existing within modern economic society.Seen in this light, Gossen’s religious rhetoric becomes an essential elementthrough which one can understand the social consequences of the politicaleconomy in which, so exceptionally, Gossen took his place.

If we take this latter approach, then Gossen presents a precise vision ofmodern humanity, based upon the supremacy of the economic vision ofconduct: the pursuit of pleasure or of happiness can then be described as a

Philippe Steiner

376

social and individual asceticism covering all actions and all moments ofone’s life. It provides the axiological mechanism in support of moderneconomic behaviour that is no longer a dreary mechanical form of action,but an imperative and a moral law. There is more at stake in moderneconomic behaviour than Weber allowed (2002 [1904–1905]: 120–1).Gossen’s economic theology defined a new form of relationship of theindividual to his own truth, another form of ‘concern for oneself’ specific tothe modern economic subject and which Foucault touched upon inconsidering the writings of the Chicago School towards the end of a lectureseries at the College de France (2004 [1979]: lecons 9–10), withouthowever later elaborating these remarks (Steiner 2008). Gossen’s book, likemany others drawn from the tide of nineteenth-century publications inpolitical economy, could have given Foucault a textual foundation for thefurther development of his hypotheses on the genesis of practices.

Seen in this light, Gossen’s economic theology is an intellectualmilestone of prime importance in the evolution of the modern economicsubject; a marker as important for the historian of ideas as for thedevelopment of the mathematical form of political theory, which is whatpolitical economy has become.

Acknowledgements

A preliminary version of this text was presented at the colloquium ‘Sciencehumaines et religion’ organised by the French Society for the History of theSciences of Man in Paris, September 2005. The author thanks GilbertFaccarello, Jean-Pierre Potier, Jean-Marc Rohrbasser, Keith Tribe, FrancoisVatin and the referees of the journal for their comments and suggestions.

References

Bagiotti, T. (1955). Nel centennale del libro di Gossen. Giornale degli economisti e annali dieconomia, 14: 236–53.

Bateman, B. and Banzaff, S. (eds) (2008). Keeping Faith. Political Economy and Religion,History of Political Economy, 40 (Annual Supplement).

Becker, G.S. (1976 [1965]). A theory of the allocation of time. In G. Becker (ed.), TheEconomic Approach to Human Behavior. Chicago: Chicago University Press, pp. 89–114.

Bentham, J. (1948 [1789]). An Introduction to the Principles of Morals and Legislation.New York: Hafner Press.

Bousquet, G.-H. (1958). Un centenaire: l’œuvre de H.H. Gossen (1810–1858) et saveritable structure. Revue d’economie politique, 68: 499–523.

Comte, A. (1890 [1851–1853]). Systeme de politique positive, 3rd ed, Paris: Larousse.Cournot, A.-A. (1974 [1838]). Recherches sur les principes mathematiques de la theorie des

richesses, Paris: Calmann-Levy.


377

Crimmins, J.E. (1998). Utilitarians and Religion, Bristol: Thoemmes Press.Demeulenaere, P. (1996). Homo œconomicus. Enquete sur la constitution d’un paradigme,

Paris: Presses universitaires de France.Dunoyer, C. (1845). De la liberte du travail. Paris: Guillaumin.Edgeworth, F.Y. (1896) Gossen, Hermann Heinrich (1810–1858). In Palgrave’s Dictionary

of Political Economy, Vol. 2. London: Macmillan, pp. 231–233.Faccarello, G. and Steiner, P. (2008) Interest, sensualism and the science of the

legislator: French Philosophie economique (1695–1830). European Journal of the History ofEconomic Thought, 15 (1): 1–24.

Foucault, M. (1997 [1977]). Il faut defendre la societe. Paris: Gallimard-Seuil.Foucault, M. (2004 [1978]). Securite, territoire, population. Paris: Gallimard-Seuil.Foucault, M. (2004 [1979]). Naissance de la biopolitique. Paris: Gallimard-Seuil.Fourier, C. (1967 [1808]). Theorie des quatre mouvements et des destinees generales. Paris:

Pauvert.Fourier, C. (1973 [1829]). Le nouveau monde industriel et societaire. Paris: Flammarion.Georgescu-Roegen, N. (1983). Hermann Heinrich Gossen: His life and work in historical

perspective. In H. Gossen, The Laws of Human Relations and the Rules of Human ActionDerived Therefrom, Engish trans. Cambridge: MIT Press, pp. xi–cxlv.

Georgescu-Roegen, N. (1985) Time and value in economics and in Gossen’s system,Rivista internazionale di scienze economiche e commerciali, 32: 1120–40.

Gossen, H.H. (1983 [1854]). The Laws of Human Relations and the Rules of Human ActionDerived Therefrom. English trans. Cambridge: MIT Press.

Gouhier, H. (1964). La jeunesse d’Auguste Comte et la formation du positivisme, 2nd ed. Paris:Vrin.

Hayek, F. von (1927). Hermann Heinrich Gossen. English trans. In F. Hayek (1991). TheComplete Works of F.A. Hayek, Vol. 3. London: Routledge, pp. 352–71.

Hayek, F. von (1980 [1973]). Droit, legislation et liberte, French trans. Paris: Pressesuniversitaires de France.

Jevons, W.S. (1965 [1879]). The Theory of Political Economy. New York: Kelley.Kortum, H. (1881). Notice biographique sur H.H. Gossen. In H. Gossen (1995 [1854]).

Exposition des lois de l’echange et des regles de l’industrie qui s’en deduisent. French trans.Paris: Economica, pp. 33–8.

Kurz, H.D. (2009). Wer was Hermann H. Gossen (1810–1858), Namensgeber des Preisedes Vereins fur Socialpolitik? Schmollers Jahrbuch, 129: 1–28.

Leibniz, G. (1969 [1710]). Essai de theodicee. Paris: Flammarion.Leibniz, G. (1986 [1714]). Principes de la philosophie ou monadologie. Paris: Presses

universitaires de France.Niehans, J. (1987). Gossen, Hermann Heinrich. In J. Eatwell and M. Milgate (eds), The

New Palgrave. A Dictionary of Economics, Vol. 2. London: Macmillan, pp. 550–4.Paley, W. (1810 [1786]). The Principles of Morals and Political Philosophy. London: J. Folder.Saint-Simon, H. (1966 [1803]). Lettres d’un habitant de Geneve a ses contemporains. In

Œuvres de Henri de Saint-Simon, Vol. 1 Paris: Anthropos.Saint-Simon, H. (1966 [1808]). Introduction aux travaux scientifiques du 19eme siecle. In

Œuvres de Henri de Saint-Simon, Vol. 6. Paris: Anthropos.Saint-Simon, H. and Comte, A. (1966 [1821]). Du systeme industriel. In Œuvres de Claude

Henri de Saint-Simon, Vol. 3. Paris: Anthropos.Schmitt, C. (1988 [1922]). Theologie politique. French trans. Paris: Gallimard.Schmitt, C. (1972 [1932]). La notion de politique. French trans. Paris: Calmann-Levy.Schneewind, J.B. (1998). The Invention of Autonomy. A History of Modern Moral Philosophy.

Cambridge: Cambridge university Press.

Philippe Steiner

378

Schumpeter, J. (1954). History of Economic Analysis. London: Allen and Unwin.Smith, A. (1979 [1776]). An Inquiry into the Nature and Causes of the Wealth of Nations.

Indianapolis: The Liberty Press.Steiner, P. (2005/2011). Durkheim and the Birth of Economic Sociology. Princeton: Princeton

university Press.Steiner, P. (2008). Foucault and Weber and the history of the economic subject. European

Journal of the History of Economic Thought, 15(3): 503–27.Tribe, K. (1988). Governing Economy. The Reformation of German Economic Discourse 1750–

1840. Cambridge: Cambridge University Press.Van Daal, J. (1993). La deuxieme loi de Gossen: trouvaille heureuse. Revue d’economie

politique, 103(5): 721–31.Van Daal, J. et al. (1995). Introduction des editeurs. In H. Gossen 1995 [1854]. Exposition

des lois de l’echange et des regles de l’industrie qui s’en deduisent, French trans. Paris:Economica, pp. 1–22.

Viner, J. (1972) The Role of Providence in the Social Order. An Essay in Intellectual History,Princeton: Princeton university Press.

Walras, L. (1885). Un economiste inconnu, H.H. Gossen. In H. Gossen, 1995 [1854].Exposition des lois de l’echange et des regles de l’industrie qui s’en deduisent, French trans.Paris: Economica, pp. 41–58.

Walras, L. (1990 [1896]). Etudes d’economie sociale, in Œuvres economiques completes de LeonWalras, Vol. 9. Paris: Economica.

Weber, M. (2002 [1904–1905]). The Protestant Ethic and the ‘Spirit’ of Capitalism and OtherWritings, English trans. London: Penguin Books.

Weber, M. (2004 [1920]). Prefatory remarks to the collected essays in the sociology ofreligion. In S. Whimster (ed.), The Essential Weber. London: Routledge.

Whately, R. (1966 [1832]). Lectures on Political Economy. New York: Kelley.

Abstract

Herman Gossen’s book is usually praised for its contribution to themathematisation of economics and the obsessive presence of religiousreferences is unduly left out. This paper takes both dimensions seriouslyand explains how the religious emphasis is crucial for a historical andtheoretical understanding of Gossen’s view on maximisation of utility andthe government of rational and selfish human beings.

Keywords

Economic theology, Gossen, homo œconomicus, maximisation of utility


379

Copyright of European Journal of the History of Economic Thought is the property of Routledge and its content

may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express

written permission. However, users may print, download, or email articles for individual use.

gossen economic theory

Documents