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Why is marginalism such a big improvement over subjectivism in economics?

  1. Oct 12, 2012 #1
    It is my understanding that the subjective theory of value, has a long history before Adam Smith that can be traced from Aristotle to certain Scholastics and then Turgot and the physiocrats. So the idea that subjective utility, psychological preferences and supply and demand determines prices was advocated long before the Marginal Revolution of Jevons, Walras, Menger.

    So my question is what was the big deal about marginal utility? From the wikipedia article it seems that the main thing is that you look at the individual units at the margins instead of the product as a whole. Why is this so much more useful than just saying subjective utility determines prices? Whats the big deal about the "marginal unit"? And why did this change economics so much?

    Well, I notice economics becomes much more mathematical after Jevons, so is the main thing that it becomes easier to apply concrete mathematical calculus and quantification to economics?

    Can someone explain why subjective marginal utility of the late 1800s was so revolutionary and transformative to the field of economics, compared to old fashioned subjectivism?
  2. jcsd
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