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I

1. The common word “utility” was introduced into
the special vocabulary of the social scientist only in
the last half of the eighteenth century. By it the initia-
tors understood that inherent property of a thing which
in English is best rendered by “usefulness.” Thus, Abbot
Ferdinando Galiani (Della moneta, 1750) defined utilità
as “the power of a thing to procure us felicity.” Simi-
larly, Jeremy Bentham at first spoke of utility as “that
property in any object, whereby it tends to produce
benefit, advantage, pleasure, good or happiness” (An
Introduction to the Principles of Morals and Legislation,
1780). But the meaning of the term has shifted contin-
uously and even today “utility” circulates with various,
albeit cognate, connotations. By referring to the prin-
ciple of utility as the principle of the greatest happiness
of the greatest number, Bentham himself paved the
way for this terminological license. The ensuing confu-
sion prompted W. Stanley Jevons to insist that “Utility
is not an Intrinsic Quality,” but “the sum of the pleas-
ure created and the pain prevented” (The Theory of
Political Economy, 1871).

In the end, Bentham was disturbed by his license,
but blamed the unfortunate choice of the term for his
confusion, and the French for insisting on that choice.
The choice was indeed unfortunate, especially in the
case of those Romance languages which do not distin-
guish between “utility” and “usefulness.” But even an
English-speaking person needs some mental effort to
relate “utility” to pleasure. Moreover, “utility” can
hardly evoke a relationship between an individual and
the things and services available to him, which is the
core of every modern definition of the concept. Several
other economists have also expressed their dissatisfac-
tion with the term and made various suggestions, not
always well inspired, for a new label. Unfortunately,
even “ophelimity,” the term coined by Vilfredo Pareto
to cleanse the terminology of any vernacular overtones,
did not prevail. The prestige of Jevons added to that
of Bentham sufficed to enthrone “utility” in economics.

A passage from an Oxford lecture delivered in 1833
by W. F. Lloyd admirably illustrates how clear the
whole picture becomes if one is not entrapped by the
ambiguity of Bentham's license:

(pp. 174, 181).

Carl Menger, one of the founders of the modern theory
of utility (“Principles of Economics,” 1950; German
original, 1871), also used “value” for what others called
“utility” and even decried the use of this last term
otherwise than as a synonym of “usefulness.” Jevons
himself began by emphasizing that “value depends
entirely on utility.” And nowadays most economists
would agree with his position. All this shows that the
modern concept of utility is so intimately connected
with that of economic value that it is well-nigh impos-
sible to separate them in thought or analysis.

2. The notion of utility, in fact, goes back under
other names twenty-five centuries to the philosophers
of ancient Greece, who first raised the problem of what
endows certain things with an economic value. The
march of ideas has been unusually slow and exasper-
atingly tortuous, not only because there were numerous
genuine obstacles to circumvent, but also because at
times spurious ones were created. Nevertheless, one
can distinguish four salient landmarks.

The earliest landmark is represented by a thought
of a very modern facture. There are two elements
involved in economic value: an intrinsic property of
the commodity and the user's ability to enjoy it. As
Xenophon observed in his Oeconomicus, even though
a flute has no value for one who cannot play it, it has
a market value because others can. However, the fa-
miliar conviction that science requires a monistic ex-
planation led a long line of students to move away
from this thought in order to look for a single cause
of value.

Clearly, such a cause must be either in us or in
things, but not in both. And since in early times hardly
anyone could think of pleasure as a measurable entity,
the tenet that “the value of a thing lies in the thing
itself”—as J. B. Say was to formulate it not very long
ago—won by default. Other factors, however, account
for the long survival of this commodity fetishism, a
second landmark. There was, first, the authority of
Aristotle, from whom the idea originated (Nicoma-
chean Ethics 1133a 25-26). Secondly, any thought that
there may after all be a subjective element in economic
value was stifled by the so-called paradox of value,
which, according to Plato (Euthydemus 304), was
known even to the poet Pindar. This paradox points
out that some vitally important things (such as water)
have a very low exchange value or none at all, while
others (such as diamonds) have very little importance
and a very high exchange value. Ergo, value cannot
be in man.

Like many other traditional dogmas, commodity
fetishism suffered a setback during the Age of the
Enlightenment. And, as always, the reaction embraced
the diametrically opposite view. This view, the third

landmark, is that “a thing does not have value because,
as is assumed, it has a cost; but it has a cost because
it has value [in use],” as Étienne de Condillac sum-
marized it about 1745 (Oeuvres philosophiques...,
2 vols. [1948], 2, 246).

The fourth landmark is the modern theory which
views utility as being neither in things nor in us, but
in a relation between us and things, and which explains
value as the balance determined by the members of
an economy between utility and disutility.