tailieunhanh - History of Economic Analysis part 61

History of Economic Analysis part 61. At the time of his death in 1950, Joseph Schumpeter-one of the major figures in economics during the first half of the 20th century-was working on his monumental History of Economic Analysis. A complete history of humankind's theoretical efforts to understand economic phenomena from ancient Greece to the present, this book is an important contribution to the history of ideas as well as to economics. | History of economic analysis 562 of profits to be roughly equal in different but similarly conditioned lines of We derive a similar proposition from the principle of maximizing net returns and associate it with the principle of substitution. The classics it has been held 5 were not in possession of the latter This is true and so it is that this constitutes one of the most serious shortcomings of their analytic apparatus. But if they did not formulate it explicitly and did not apply it systematically neither were they entirely unaware of it. They used it in individual cases. And it is implied in some of their propositions. a Ricardo and Marx. By theories of value we mean attempts at indicating the factors that account for a thing s having exchange value or though this is not strictly the same the factors that regulate or govern value. Let us begin with Ricardo. we remember may be credited with three different theories of value the labor-quantity theory illustrated by his beaver and deer example the labor-disutility theory conveyed by his reference to toil and trouble the cost theory he actually used in the central part of his analysis. We also know that in addition he recommended labor along with corn as a relatively stable unit by which to express commodity values numéraire .7 Ricardo starting his theoretical work by a study of the Wealth of Nations was displeased with what he rightly felt to be a logical muddle and came to the conclusion that the labor-quantity8 theory of value as conveyed by the beaver and deer example was the one to adopt not only for primitive conditions in which there was no scarce factor other than labor but generally for all cases even where there were also other scarce factors. His first chapter is an attempt to carry out this idea. A. Smith s cost theory he evidently thought logically unsatisfactory perhaps circular . The labor-disutility theory he neglected probably because it did not occur to him that it .