Friday, August 27, 2010

Positively Marginal

A Brief History of Economic Thought — By Jim Cox — "The marginal revolution of the 1870′s–with Carl Menger in Austria, William Stanley Jevons in England, and Leon Walras in Switzerland each writing independently and in differing languages–reestablished the correct marginal approach. As stated by Joseph Schumpeter in The History of Economic Thought:
It is not too much to say that analytic economics took a century to get where it could have got in twenty years after the publication of Turgot’s treatise had its content been properly understood and absorbed by an alert profession. p. 249
Unfortunately, the theory was perverted into a mathematized method with the rush to positivism in the 20th century.
The Austrian tradition of Menger was completed in the theories of Ludwig von Mises with the application of marginal utility analysis applied for the first time to money, which in turn led to the correct business cycle approach during the 1920′s."