Marginalist
Done by
Thanmaya
Jeevitha.R
T.Preethi
Pradyumna
Hemanth Kumar
Friedrich Hayek
Friedrich August von Hayek, a Area of Study*
prominent economist and
philosopher, left an indelible mark Hayek's academic journey
on the study of economics, began with a focus on law and
particularly through his
political science, but he soon
contributions to the understanding
gravitated towards economics.
of free-market capitalism and the
He studied at the University of
role of knowledge in economic
systems. Born on May 8, 1899, in
Vienna, where he was deeply
Vienna, Austria, Hayek's intellectual influenced by the Austrian
pursuits spanned various fields, School of Economics,
including economics, political particularly by economists like
science, and philosophy. His work Ludwig von Mises. Hayek's
earned him the Nobel Memorial primary area of study was the
Prize in Economic Sciences in 1974, functioning of economic
a testament to his profound systems, with a keen interest
influence on economic thought. in the decentralized processes
of decision-making and the
dissemination of information
in markets.
Major Contribution*
One of Hayek's most significant contributions to
economics is his theory of the price system as a
mechanism for communicating information. In his
seminal work, "The Use of Knowledge in Society" (1945),
Hayek argued that prices in a free market are signals
that convey valuable information about the relative
scarcity of goods and services. This decentralized
system allows individuals to make informed decisions
without requiring a central planner. Hayek's insight into
the price mechanism highlighted the efficiency of
markets in allocating resources and coordinating
economic activity, underscoring the limitations of
central planning.
Another notable contribution is his critique of socialism
and central planning, detailed in his book "The Road to
Serfdom" (1944). Hayek warned that extensive
government control over economic decisions leads to a
loss of individual freedoms and, ultimately, to
totalitarianism. His advocacy for limited government
intervention and the protection of individual liberties
resonated with many and became a cornerstone of
classical liberal and libertarian thought.
Popularity*
Hayek's ideas gained widespread recognition
and popularity, particularly during the latter
half of the 20th century. His critique of
central planning and socialism struck a
chord during the Cold War, as Western
nations grappled with the ideological battle
between capitalism and communism. In the
1980s, Hayek's influence was evident in the
economic policies of leaders like Ronald
Reagan in the United States and Margaret
Thatcher in the United Kingdom, both of
whom implemented market-oriented
reforms inspired by Hayekian principles.
Emphasis on Marginalism*
A crucial aspect of Hayek's economic philosophy is his
adherence to marginalism, a fundamental concept in
economic theory. Marginalism focuses on the importance
of marginal changes in decision-making, analyzing how
individuals allocate resources based on the additional
benefit or cost of consuming one more unit of a good or
service. Hayek's emphasis on the role of marginal utility in
understanding consumer behavior and market dynamics
aligns him with the marginalist tradition, which includes
other notable economists like William Stanley Jevons, Carl
Menger, and Léon Walras.
In conclusion, Friedrich Hayek's profound contributions to
economics, particularly his theories on the price
mechanism and his critique of central planning, have
cemented his legacy as a pivotal figure in economic
thought. His popularity surged during crucial periods of
ideological conflict, and his marginalist approach provided
valuable insights into the functioning of markets and the
behavior of individuals within them. Hayek's work
continues to inspire economists, policymakers, and
advocates of free-market capitalism worldwide,
underscoring the enduring relevance of his ideas in
contemporary economic discourse.
JOHN BATES CLARK
John Bates Clark (1847–1938), the most eminent American
economist of a century ago, was, in his own day
Popular for:
•Theory of marginal productivity
Major Contribution
•The Philosophy of wealth
•The Distribution of wealth
•Utility Theory
•Marginal Productivity Theory
•Captial Theory
Area of study
Clark was educated at Brown University
and Amherst College. He then
studied in Heidelberg, Germany
, and Zürich, Switzerland.
Returning to the United States
, he taught at Carleton, Smith
, and Amherst colleges and
at Columbia University
WILLIAM STANLEY
JEVONS
William Stanley Jevons (born September
1, 1835, Liverpool, England—died August
13, 1882, near Hastings, Sussex) was an
English logician and economist whose
book The Theory of Political Economy
(1871) expounded the “final” (marginal)
utility theory of value. Jevons’s work,
along with similar discoveries made by
Karl Menger in Vienna (1871) and by Léon
Walras in Switzerland (1874), marked the
opening of a new period in the history of
economic thought
Area of study:
Jevons broke off his studies of the natural sciences in
London in 1854 to work as an assayer in Sydney, where he
acquired an interest in political economy.
Popular:
Jevons received public recognition for his work on The
Coal Question (1865), in which he called attention to the
gradual exhaustion of Britain's coal supplies and also put
forth the view that increases in energy production
efficiency leads to more, not less, consumption.
major contribution:
Of his works on logic and scientific methods, the most
important is his Principles of Science (1874). His other
notable works include The Theory of Political Economy
(1871) and The State in Relation to Labour (1882).Jevons
went on to define the “equation of exchange.
Leon Walrus
Léon Walras (1834-1910), whose full name was Marie Esprit Léon
Walras (the final “s” is sounded), is celebrated among economists
and econometricians as the first to have formulated a
multiequational general equilibrium model of economic
relationships. He was born on December 16, 1834, in Évreux, a
provincial town of Normandy, France.
Popular for:
•Marginal Theory of Value
•General equilibrium Theory
Major Contribution
•Walras is best known for his book Éléments
economies politique pure, a work that has
contributed greatly to the mathematicization of
economics through the concept of general
equilibrium. The definition of the role of the
entrepreneur found in it was also taken up and
amplified by Joseph Schumpeter.
Area of study
Leon was educated at UNIL - Université de
Lausanne, École des Mines de Paris, HEC
Lausanne .After sampling several careers—he
was for a while a student at the school of mines,
a journalist, a lecturer, a railway clerk, a bank
director, and a published romance novelist.
CARL MENGER
Carl Menger (1840-1921), economic theorist and
founder of the Austrian school of marginal analysis, was
both the most influential and the least read of the major
figures who gave economic theory the shape it
preserved from about 1885 to 1935. There is little doubt
that it was his immediate disciples who cast
microeconomic theory into the form which, in its
essentials, it still retains.
AREA OF STUDY:
Carl earned his doctorate in law from the
University of Kraków in 1867. As a result of
publishing his Principles of Economics in 1871,
he was given a lectureship and then a
professorship at the University of Vienna,
which he held until 1903. In 1876 he took a post
as tutor for Crown Prince Rudolf of Austria.
MAJOR CONTRIBUTION:
Menger used his “subjective theory of value” to
arrive at one of the most powerful insights in
economics: both sides gain from exchange.
People will exchange something they value less
for something they value more. Because both
trading partners do this, both gain.
POPULAR:
Menger was widely known as the founder of the
Austrian school of economics. What made
Menger (along with economists William Stanley
Jevons and Léon Walras) a founder of the
marginal utility revolution was the insight that
goods are valuable because they serve various
uses whose importance differs
