TAILIEUCHUNG - History of Economic Analysis part 101

History of Economic Analysis part 101. 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 962 this universal interdependence was demonstrated by numerous investigations into the theory of joint and composite demand and supply and of the values of related commodities in general which produced some of the most illuminating passages of Book V of the Principles and which were further developed by Edgeworth. In fact it stands to reason that the comprehensive but gaunt and colorless idea of the universal interdependence that subsists between all elements of the economic system and so easily provokes sneers about everything s depending upon everything else can be brought home and made alive to the many by means of concrete cases about the relations between the values of beef and mutton or again of tea and sugar the relations between the values of competing or completing commodities Fisher . And this can be done without violating the restrictions inherent in the methods of partial analysis. We do indeed in such cases sometimes with a slight disregard of strict logic go beyond direct effects and take into account also indirect ones but still we do so only within small sectors that do not produce significant effects upon the whole economy at least not effects significant enough to affect the quantities such as national income that determine the setting of the small sector. In such cases the relations in the small sector which can be managed by partial analysis illustrate or exemplify to a limited extent the relations in the whole of the economic But they do so only up to a point. Beyond this point the methods and results of partial analysis remain inadequate and may become even misleading. Marshall realized this. It is very instructive to observe how carefully he watched his step wherever his argument rose into the realm of the general theory of However it is obvious from his appendix note XXI that had he wished to go further he would have sought the necessary comple- work of his group in its true light .

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