Marginal Revolution

Marginal Revolution is the development of economic theory in the late 19th century which explained economic behavior in terms of marginal utility and related concepts.

Quotes

• The term 'marginal revolution' is usually taken to refer to the nearly simultaneous but completely independent discovery in the early 1870s by Jevons, Menger and Walras of the principle of diminishing marginal utility as the fundamental building block of a new kind of static microeconomics. It constitutes, so the argument goes, one of the best examples of multiple discoveries in the history of economic thought, which simply cries out for some sort of historical explanation: it is too much to believe that three men working at nearly the same time in such vastly different intellectual climates as those of Manchester, Vienna and Lausanne could have hit by accident on the same idea. The trouble is that none of the standard explanations is convincing. The levels of economic development in England, Austria and Switzerland were so different in the 1860s that all crypto-Marxist explanations in terms of changes in the structure of production or the relationship between social classes strain our sense of credulity. Likewise, the utilitarian-empiricist tradition of British philosophy, the neo-Kantian philosophical climate of Austria and the Cartesian philosophical climate of Switzerland simply had no elements in common that could have provoked a utility revolution in economics. In matters of economic policy, there was in fact continuity with classical thinking and when Jevons and Walras wrote on policy questions, as they often did, there was little or no connection between their practical recommendations and their views on value theory.
  • Mark Blaug, Economic Theory in Retrospect (5th ed., 1997), Ch. 8 : The Marginal Revolution