4 above all subjective"; and MacLeod in 1872: "Value, like color and sound, exists only in the human mind. There is neither color nor sound nor value in nature," 5 the question thus arising: "If labor is the sole cause of value, what is the cause of the value of labor?" MacLeod, to be sure, published his "Principles of Political Economy" a year after Jevons' "Theory" had been published, but certainly the question, why labor had value, was nowhere put so bluntly; not by Lauderdale nor Lloyd, nor Baudrillart who in "The Relation of Ethics to Political Economy," 7 1860, simply made a distinction between utility in things and values created by man, following Storch in this regard. CourcelleSeneuil came the nearest to a marginal interpretation of price in that he defined it as a balance of wants, and virtually did away with objective costs. In other words, he adapted J. S. Mill's statement to a subjective viewpoint, so that preferences took the place of differentials in cost. Lloyd in his lecture on the "Notion of Value," 1833, differentiated between absolute and exchange value, associating the former with valuations independent of exchange. The importance of scarcity for economic value, the rise of value with decreasing supply, and the principle of illimitable wants due to the diversification of products-all these now familiar ideas gave a touch of novelty to Lloyd's treatment. Similarly Banfield & in 1844 dealt with the effects of variety in our scaling of wants. However, one must go to Jennings and Gossen, and the better-known treatises of the seventies to appreciate the drift of Marginism in its earlier stages. Traité, vol. 1, pp. 45 and 243. See also Book I, ch. 8 passim, where the effect of differential wants on trade is succinctly stated. Principles of Political Economy, 1872, vol. 1, ch. 5, Sect. II, §§ 9-16. See especially pp. 244-57 of Des Rapports de la Morale et de l'Economie Politique. Banfield, J. Ē. Lecture on the Organization of Labor, 1844. Jevons thus writes: Utility is an "abstract quality whereby an object serves our purposes and becomes entitled to rank as a commodity"; " Menger in his "Principles of Economics," 1871: "The essence of value as well as its measure is entirely subjective"; 10 Wieser in 1884: "Value is an instance of human interest, but associated with a condition of things." 11 Between 1855 and 1875 Marginism was definitely formulated as a theory of price and income, all subsequent developments resting logically on the foundation laid during those two decades. As Table Three shows, there was from the start considerable agreement among the founders, although differences become noticeable at closer range. The Founders of Marginism.-What the five writers grouped together in this tabulation had in common was a subjective view of value, a stress of the law of diminishing returns and of the relation between scarcity and value —what Wieser was pleased to call the "paradox of value," -the relation of trade to differences in want-intensity as between different persons or with regard to different goods for any one person, the measuring of price by least wants respectively utilities, and the thought of connecting, at one point or another, prices with income. Emphasis was by all five put on price. The older notion of things and costs was either discarded or made to fit in with the psychological aspects of valuation. In general, the economic problem was stated more concisely perhaps than ever before, and deductive reasoning relied upon for expanding the argument. Jevons Theory of Political Economy, edit. of 1879, pp. 38 and 43. elsewhere informs us that his principal ideas were developed between 1855 and 1860. 10 Grundsätze der Volkswirtschaftslehre, p. 119. 11 Ursprung und Hauptgesetze des Wirtschaftlichen Werthes, pp. 79-93. |