You seem to be assuming that your U(x) is per-person, so that each person p would have a separate U_p(x) = x_p + log y_p (or whatever), where x_p is how much x that person has and y_p is how much y that person has.
You then imply a universal or societal “overall” utility function of the form V(x) = summation( U_p(x) ) over all p.
Your fallacy is in applying the log transform to the individual U_p(x) functions rather than to the top-level function V(x) as a whole.
You seem to be assuming that your U(x) is per-person, so that each person p would have a separate U_p(x) = x_p + log y_p (or whatever), where x_p is how much x that person has and y_p is how much y that person has.
You then imply a universal or societal “overall” utility function of the form V(x) = summation( U_p(x) ) over all p.
Your fallacy is in applying the log transform to the individual U_p(x) functions rather than to the top-level function V(x) as a whole.