The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Production as Indirect Exchange

  • Trout Rader
Reference work entry


Relative to classical doctrines, neoclassical economics was distinguished early on by the addition of utility to the arsenal of theoretical tools, especially with respect to mathematical methods (e.g. Jevons (1871); Marshall (1890) and Walras (1874–7) as a supplement to such as Adam Smith (1776), Ricardo (1817) and Cournot (1838). In his Éléments, Walras conjectured that grouping or tâtonnement led to general equilibrium where supply equalled demand for each, even in a manycommodity, many-dimensioned world. Also utility was shown to be equivalent to abstract properties of preferences on bundles of consumer goods (Hicks and Allen 1934). For example, not only was choice by rational agents expostulated but, consistent with modern psychoanalysis or its milder variants, many non-rationalities were permitted Sonnenschein 1971 and Shafer 1974). Thereby application of economics was greatly expanded to cover non-transitive preferences.) However, the story did not end there.

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Trout Rader
    • 1
  1. 1.