Marginalist Revolution: Difference between revisions
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'''The Marginalist Revolution''' <ref name=MARGREVHET>[http://cepa.newschool.edu/het/essays/margrev/margrev.htm The Marginalist Revolution]</ref> refers to the establishment of what has been called [[Neoclassical]] economic theory. The dating of this "revolution" is commonly ascribed to 1871-74, when the concept of ''"[[diminishing marginal utility]]"'' was introduced, independently and almost simultaneoulsy, by [[William Stanley Jevons]] <ref name=JEVONSHET>[http://cepa.newschool.edu/het/profiles/jevons.htm William Stanley JEVONS, 1835-1882]</ref>, [[Carl Menger]] <ref name=MENGERHET>[http://cepa.newschool.edu/het/profiles/menger.htm Carl MENGER, 1841-1921]</ref> and [[Léon Walras]] <ref name=WALRASHET>[http://cepa.newschool.edu/het/profiles/walras.htm Marie Esprit Léon WALRAS (1834-1910)]</ref>, to analyse the character of demand -- thus the term "Marginalist". Actually the fundamental principles of marginalism had been discovered much earlier, in 1854, by the Prussian civil servant [[Hermann Heinrich Gossen]] <ref name=GOSSEN>[http://cepa.newschool.edu/het/profiles/gossen.htm Hermann Heinrich Gossen (1810-1858)]</ref> (1810-1858), who first formulated, in a rare and unknown book, <ref name=GOSSEN1>[http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=8361 GOSSEN, Hermann Heinrich. ''The Laws of Human Relations and the Rules of Human Action Derived Therefrom'' (''Entwicklung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln'').<small> Translated by Rudolph C. Blitz; introduction by Nicholas Georgescu-Roegen. Cambridge, MA: MIT Press, 1983.] ISBN 0262070901</small></ref> the "Gossen second law" or ''"the law of diminishing marginal utility"'', which was his most original contribution and presaged the ''Marginalist Revolution of 1871-74''. Gossen's work was utterly disparaged by scions of the all-powerful [[German Historical School]] ([[Schmoller]] dismissed him as an "ingenious idiot"). Gossen died bitter and unknown. His work was only uncovered and graciously acknowledged by [[Jevons]] in 1878. | '''The Marginalist Revolution''' <ref name=MARGREVHET>[http://cepa.newschool.edu/het/essays/margrev/margrev.htm The Marginalist Revolution]</ref> refers to the establishment of what has been called [[Neoclassical]] economic theory. The dating of this "revolution" is commonly ascribed to 1871-74, when the concept of ''"[[diminishing marginal utility]]"'' was introduced, independently and almost simultaneoulsy, by [[William Stanley Jevons]] <ref name=JEVONSHET>[http://cepa.newschool.edu/het/profiles/jevons.htm William Stanley JEVONS, 1835-1882]</ref>, [[Carl Menger]] <ref name=MENGERHET>[http://cepa.newschool.edu/het/profiles/menger.htm Carl MENGER, 1841-1921]</ref> and [[Léon Walras]] <ref name=WALRASHET>[http://cepa.newschool.edu/het/profiles/walras.htm Marie Esprit Léon WALRAS (1834-1910)]</ref>, to analyse the character of demand -- thus the term "Marginalist". Actually the fundamental principles of marginalism had been discovered much earlier, in 1854, by the Prussian civil servant [[Hermann Heinrich Gossen]] <ref name=GOSSEN>[http://cepa.newschool.edu/het/profiles/gossen.htm Hermann Heinrich Gossen (1810-1858)]</ref> (1810-1858), who first formulated, in a rare and unknown book, <ref name=GOSSEN1>[http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=8361 GOSSEN, Hermann Heinrich. ''The Laws of Human Relations and the Rules of Human Action Derived Therefrom'' (''Entwicklung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln'').<small> Translated by Rudolph C. Blitz; introduction by Nicholas Georgescu-Roegen. Cambridge, MA: MIT Press, 1983.] ISBN 0262070901</small></ref> the "Gossen second law" or ''"the law of diminishing marginal utility"'', which was his most original contribution and presaged the ''Marginalist Revolution of 1871-74''. Gossen's work was utterly disparaged by scions of the all-powerful [[German Historical School]] ([[Schmoller]] dismissed him as an "ingenious idiot"). Gossen died bitter and unknown. His work was only uncovered and graciously acknowledged by [[Jevons]] in 1878. | ||
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* 1854 H. Heinrich Gossen (Prussian, b.1810) ''Entwicklung der Gesetze des menschlichen Verkerhs'' <ref name=GOSSEN1>[http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=8361 GOSSEN, Hermann Heinrich. ''The Laws of Human Relations and the Rules of Human Action Derived Therefrom'' (''Entwicklung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln'').<small> Translated by Rudolph C. Blitz; introduction by Nicholas Georgescu-Roegen. Cambridge, MA: MIT Press, 1983.] ISBN 0262070901</small></ref>. | * 1854 H. Heinrich Gossen (Prussian, b.1810) ''Entwicklung der Gesetze des menschlichen Verkerhs'' <ref name=GOSSEN1>[http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=8361 GOSSEN, Hermann Heinrich. ''The Laws of Human Relations and the Rules of Human Action Derived Therefrom'' (''Entwicklung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln'').<small> Translated by Rudolph C. Blitz; introduction by Nicholas Georgescu-Roegen. Cambridge, MA: MIT Press, 1983.] ISBN 0262070901</small></ref>. | ||
::* <small> This article is under construction</small> | |||
==References== | ==References== |
Revision as of 09:42, 29 April 2007
- This article is under construction
The Marginalist Revolution [1] refers to the establishment of what has been called Neoclassical economic theory. The dating of this "revolution" is commonly ascribed to 1871-74, when the concept of "diminishing marginal utility" was introduced, independently and almost simultaneoulsy, by William Stanley Jevons [2], Carl Menger [3] and Léon Walras [4], to analyse the character of demand -- thus the term "Marginalist". Actually the fundamental principles of marginalism had been discovered much earlier, in 1854, by the Prussian civil servant Hermann Heinrich Gossen [5] (1810-1858), who first formulated, in a rare and unknown book, [6] the "Gossen second law" or "the law of diminishing marginal utility", which was his most original contribution and presaged the Marginalist Revolution of 1871-74. Gossen's work was utterly disparaged by scions of the all-powerful German Historical School (Schmoller dismissed him as an "ingenious idiot"). Gossen died bitter and unknown. His work was only uncovered and graciously acknowledged by Jevons in 1878.
History
The Marginalist Revolution set the foundations for the Neoclassical theory of value, which was bound to replace the "Classical" theory of value of Adam Smith, David Ricardo, John Stuart Mill and Karl Marx. However, the task of establishing the Neoclassical theory as the dominant approach to economics took quite some time, it can be roughly divided in three steps:
- (1) 1871-74: the use of the the concept of "diminishing marginal utility" as the basis of a theory of exchange -- accomplished independently by William Stanley Jevons, Carl Menger and Léon Walras.
- (2) 1890-1894: the establishment of the marginal productivity theory of distribution by John Bates Clark, Phillip H. Wicksteed and Knut Wicksell.
- (3) 1934-1947: the period of Paretian revival, whereby the introduction of ordinal utility and the solidification of the Neoclassical theory of value -- including its welfare implications -- helped resurrect Neoclassical theory from its moribund state; the critical figures here were John Hicks, Harold Hotelling, Oskar Lange, Maurice Allais and Paul Samuelson.
Therefore, the 1871-74 period was actually the "Marginalist Insurrection", the "Revolution" itself took a further half-century to work out fully. A timeline denoting the main contributions of the protagonists of the Marginalist Revolution follows:
Main Proto-Marginalists
- 1838 Antoine Augustin Cournot (French, b. 1801) Recherches sur les principes mathématiques de la théories des richesses;
- 1844 Jules J. Dupuit (French, b. 1804) De la mesure de l'utilité des travaux publics;
- 1850 Johann H. von Thunen (German, b.1783) Des isolierte Staat, Vol. II;
- 1854 H. Heinrich Gossen (Prussian, b.1810) Entwicklung der Gesetze des menschlichen Verkerhs [6].
- This article is under construction
References
- ↑ The Marginalist Revolution
- ↑ William Stanley JEVONS, 1835-1882
- ↑ Carl MENGER, 1841-1921
- ↑ Marie Esprit Léon WALRAS (1834-1910)
- ↑ Hermann Heinrich Gossen (1810-1858)
- ↑ 6.0 6.1 GOSSEN, Hermann Heinrich. The Laws of Human Relations and the Rules of Human Action Derived Therefrom (Entwicklung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln). Translated by Rudolph C. Blitz; introduction by Nicholas Georgescu-Roegen. Cambridge, MA: MIT Press, 1983. ISBN 0262070901