Satiation is the decrease of an output's beneficial health effects as greater quantities are consumed within a period of time.

For example, if you drink numerous glasses of tomato juice over the course of an hour, each of the first two glasses may increase your health by roughly the same amount. However, after this point the beneficial health effects of each glass will likely diminish. Eventually these effect will become zero, and if you continue drinking your health will likely suffer.

Similarly, the effectual value of a warm coat in a cold climate is very high, but the effectual value of a second such coat for the same consumer over the same period is extremely low.

The following figure depicts this effect.

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Satiation refers to the decrease in effectual value caused by the human body’s limited consumption capacity. In the figure, satiation begins at quantity Q1. For outputs that are assimilated, such as food, drinks, and drugs, effectual value can eventually become negative.

Satiation reflects the human organism's inherent limits in absorbing positive health effects through consumption, as well as its tendency to be damaged if consumption goes too far.1

The point where satiation begins and health damage occurs will vary with the output and the consumer, but the satiation effect itself is biologically inevitable and places a universal limit on our capacity for health-increasing consumption.

The fact that satiation is rooted in the human body’s consumption capacity implies that, as the number of human bodies increases, total consumption capacity will rise, and therefore total effectual value will rise as well. Thus, when we are dealing with aggregate effects, it is necessary to specify the population to which an effectual value curve applies.

What would happen if the population doubles in the figure above? There would be twice as much consumption capacity, and satiation would not start until double the quantity Q1. As well, the effectual value curve would decline more gradually than before.

If on the other hand the population were decreased by 50%, only half the consumption capacity would remain. Satiation would begin at half the quantity Q1, and the effectual value curve would decline more rapidly. We can thus picture the effectual value curve moving to the right and rotating upward as population rises, and moving to the left and rotating downward as population drops.

ENL's treatment of satiation differs significantly from the non-satiation assumption of standard economics. Although the standard discipline admits that a consumer can be satiated with respect to a specific output based on declining subjective desire, it insists that satiation is impossible with respect to outputs as a whole. This position is in fact the starting point for conventional thought. In the words of one well-known text: "The problems of economics arise out of the use of scarce resources to satisfy unlimited human wants."2

Heterodox economist Joan Robinson noted tersely that this assumption is transparently tied to business needs: "Satiation of material wants is bad for profits."3

ENL categorically rejects the standard position and accepts satiation with respect to both specific outputs and all outputs collectively. Desires may be infinite — or can be manipulated to appear so — but health is strictly circumscribed by the physical constitution of our bodies, and satiation is thus unavoidable in all cases.

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