Remarks Upon Certain Aspects of the Theory of Costs

  • Lionel Robbins


The Theory of Costs is not one of those parts of Economic Analysis which can properly be said to have been unduly neglected. It has always occupied a more or less central position, and in recent years it has been the subject of a quite formidable body of new work. There is, indeed, no part of his subject about which the contemporary economist may legitimately feel more gratified, either as regards the quality of the work which has been done or as regards the temper in which it has been undertaken. Yet, in spite of this, the present state of affairs in this field is not altogether satisfactory. The various problems involved have been tackled by different sets of people; and the conclusions which have been reached in one part of the field have sometimes a rather disquieting appearance of incompatibility with conclusions which have been reached elsewhere. No doubt some of this apparent incompatibility is real. It is not to be expected that here — any more than elsewhere — economists should have reached finality. But some of it is probably illusory; and if, in discussing these matters, we were to state more decisively the problems which we are attempting to solve, and the assumptions on which we proceed, it seems likely that not only should we be able to clear up our outstanding real points of difference more quickly, but that, in the course of doing so, we should also discover that many of them depended essentially upon subtle differences of object and assumption, hitherto insufficiently stated. At any rate, it is in the belief that this would be so that these very tentative remarks are put forward.


Political Economy Supply Curve Final Equilibrium External Economy Pure Competition 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 2.
    Friedrich von Wieser, Uber den Ursprung und die Hauptgesetz des Wirtschaftlichen Werthes (Vienna, 1884), pp. 146–70; Natural Value (London, 1893), pp. 171–214; “Theorie der gesellschaftlichen Wirtschaft,” Grundriss der Sozialökonomik (Tübingen, 1914), pp. 61–4, 73–81, 142–6; also the juvenile work, “Uber das Verhältnis der Kosten zum Wert,” Gesammelte Abhandlungen (Tübingen, 1929), pp. 377–404.Google Scholar
  2. 3.
    See David I. Green, “Pain-cost and opportunity-cost,” Quarterly Journal of Economics, vol. 8 (January 1894), pp. 218–29CrossRefGoogle Scholar
  3. P.H. Wicksteed, The Common Sense of Political Economy (London, 1910), p. 373Google Scholar
  4. H.J. Davenport, Value and Distribution: a critical and constructive study (Chicago, 1908), pp. 551–2, andGoogle Scholar
  5. The Economics of Enterprise (New York, 1913), pp. 106–49Google Scholar
  6. F.H. Knight, Risk, Uncertainty and Profit (Boston, 1921), p. 92, andGoogle Scholar
  7. “Some fallacies in the interpretation of social cost,” Quarterly Journal of Economics, vol. 38 (1924), p. 582CrossRefGoogle Scholar
  8. H.D. Henderson, Supply and Demand (London, 1922), p. 162.Google Scholar
  9. 4.
    Maffeo Pantaleoni, Pure Economics (London, 1898), p. 184.Google Scholar
  10. 1.
    See F.Y. Edgeworth, Papers relating to Political Economy [London, 1925], Vol. 3, pp. 56–64Google Scholar
  11. D.H. Robertson, Economic Fragments [London, 1931], p. 21Google Scholar
  12. Jacob Viner, “The doctrine of comparative costs,” Weltwirtschaftliches Archiv, vol. 36 (1932), pp. 411 ff.Google Scholar
  13. See Wicksteed, Common Sense of Political Economy, especially Book I, Chapter ix; also Franz X. Weiss, “Die Moderne Tendenz in der Lehre vom Geldwert,” Zeitschrift für Volkswirtschaft. Sozialpolitik und Verwaltung, Vol. 19 (1910), p. 518Google Scholar
  14. and K. Wicksell, Vorlesungen iiber Nationalökonomie [Jena, 1913], Vol. I, p. 159.Google Scholar
  15. 1.
    P. Sraffa, “The laws of returns under competitive conditions,” Economic Journal, vol. 36 (December 1926), pp. 535, 550.CrossRefGoogle Scholar
  16. 1.
    A.C. Pigou, Wealth and Welfare (London, 1912), pp. 172–9.Google Scholar
  17. 2.
    Allyn A. Young, “Pigou’s Wealth and Welfare,” Quarterly Journal of Economics, vol. 27 (August 1913), p. 676 et seq.CrossRefGoogle Scholar
  18. See also F.H. Knight, “Some fallacies in the interpretation of social cost,” Quarterly Journal of Economics, vol. 38 (August 1924), pp. 218–29.CrossRefGoogle Scholar
  19. Professor Pigou’s retraction of his original proposition is to be found in the second edition of The Economics of Welfare (London, 1924), p. 194Google Scholar
  20. Edgeworth’s endorsement of this retraction in his review of this volume, “The revised doctrine of marginal social product,” Economic Journal, vol. 35 (March 1925), pp. 30–9.CrossRefGoogle Scholar
  21. 1.
    [“Increasing returns and economic progress,” Economic Journal, vol. 38 (1928) pp. 527–42.] I ought perhaps to state explicitly that this merely my own interpretation. It is not a transmission of any esoteric oral tradition. My own views on these matters spring chiefly from reflections on the remarks on the variations of productivity in [Fred] Taylor’s Principles of Economics (Ann Arbor, 1911), pp. 141–2.Google Scholar
  22. 1.
    The distinction between these two stages of the theory of variations is not often clearly recognised in the English and American literature. It is, however, very clearly stated by V. Pareto (Manuel d’economie politique [Paris, 1909], p. 147), and it has recently been the subject of important studies by Mayer, Rosenstein-Rodan and Schams.Google Scholar
  23. See Hans Mayer, “Der Erkenntniswert der funktionellen Preistheorien,” Die Wirtschaftstheorie der Gegenwart, ed. Hans Mayer (Vienna, 1932), Vol. 2, pp. 147–239bGoogle Scholar
  24. P.N. Rosenstein-Rodan, “Das Zeitmoment in der mathematischen Theorie des wirtschaftlichen Gleichgewichtes,” Zeitschrift für Nationalökonomie, vol. 1 (1930), pp. 129–42CrossRefGoogle Scholar
  25. Ewald Schams, “Komparative Statik,” Zeitschrift für Nationalökonomie, vol. 2 (1931), pp. 27–61.CrossRefGoogle Scholar
  26. See also my article on “Production” in the Encyclopaedia of the Social Sciences, ed. E.R.A. Seligman (New York, 1934), pp. 462–7.Google Scholar

Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1997

Authors and Affiliations

  • Lionel Robbins

There are no affiliations available

Personalised recommendations