Thünen has much in common with Gossen: both authors published in German, and both authors applied differential calculus to economic analysis. Moreover, both authors were ignored by their contemporaries, and did not live to see the positive comments made about their innovative works by later marginalists such as Jevons (see chapter 4) or Marshall (see chapter 7).

But whereas Thünen investigated the supply side of the economy, Gossen turned his attention to demand. We will start by investigating his Development of the Laws of Human Intercourse and the Consequent Rules of Human Action, which was completed in 1853 and published in 1854. In this work, Gossen investigates how consumers make choices – or rather, how they should make choices – by comparing the pleasure that is provided through the consumption of different goods. In order to acquire these goods, individuals must provide labour to earn income with which to buy them, and that labour is usually painful and must therefore also be taken into account. Whereas Gossen’s “doctrine of enjoyment” relies on pleasure (and its opposite: pain), later marginalists would use the term “utility” (and “disutility”) to describe the potential that an object has to provide pleasure (or pain) for an individual consumer.

The second part of this chapter therefore analyses this important concept. The term “utility” was already widely used by French economists (“utilité”), but it lacked a proper definition until it was provided by Jules Dupuit (1804–66), who also elaborated on how “utility” should be properly measured.

Gossen’s laws of human enjoyment

The background to Gossen’s analysis is a positivistic and religious world view. According to Gossen, an individual being should organize his/her life in such a way that the total sum of all enjoyment over his/her lifetime is maximized. In other words, individuals should try to maximize their pleasures over the total duration of their lifetime.

This does not imply that individuals should simply consume as much as possible, since the achievement of some pleasure (“Genuss”) in the present may be followed by some pain (“Entbehrung”) in the future. For instance, the enjoyment of excessive amounts of food and drink may be enjoyable tonight but will probably generate pain tomorrow morning.