Income-price-cost to explain change in "tastes" - not ultimate tastes.

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Probably not new.

The famous article, 'De Gustibus non est Disputandum' by George Stigler and Gary Becker (SG) uses the idea in a very different way from the way that Austrians would use it. For SG it is a recommendation about how to do theory and research - 'one should not dispute about tastes". They suggest the appropriate methodology for economic research is to start with the assumption that all tastes are the same and, at least, unchanging. This because it is too easy to explain observed differences in economic behavior as reflecting differences in tastes, something that is impossible/difficult to disprove. One should look rather to the staple 'economic variables' prices, incomes and costs, in the face of homogeneous unchanging tastes (preferences) for explanations. I have great sympathy for this approach as a research strategy, though I have come to appreciate the dangers of downplaying the importance of 'cultural' differences (which, in turn, might have something to do with historical price-income-cost conditions, but at any moment in time are exogenous facts).

It occurs to me though that for Austrians this phrase means something different, equally if not more valid. Understood as 'it is futile to dispute about tastes'. This is because tastes are subjective; they are 'values' in the broadest sense of the word. And they are diverse. Conscientious subjectivists see human action playing out in a disequilibrium of inconsistent plans that get resolved through the market process and look for explanations in those terms.

SG and the neoclassicals in general would not disagree as a matter of principle. But the research strategies of the two schools of thought differ in ways related to the two interpretations of this idea. Don't you think?

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