Chapter 2 of 6

Chapter ii · The marginal revolution

1871

Value is decided at the margin.

William Stanley Jevons in Manchester and Carl Menger in Vienna, working independently, both explained value in 1871 by the usefulness of one more unit of a good. In 1874 Léon Walras built a mathematical model in which every market clears at once. Critics such as Thorstein Veblen, author of The Theory of the Leisure Class (1899), asked economists to study the social and cultural forces the models left out.