The Foundations of Price Theory

Price theory has always been at the heart of economic theory. For the past two and a half centuries, economic theorists have been trying in many different ways to understand and explain the determination of relative prices between goods and services.

Concentrating exclusively on the primary literature, this multi-volume set brings together for the first time the most significant texts of the many and and often conflicting intellectual endeavours to solve this most difficult of all economic issues. Though fully aware of the sometimes fundamental theoretical differences between the various approaches, this choice of texts suggests an interpretative framework linked to the common method used by successive schools of thought.

For the past 250 years, economists have been working with one version or another of the so-called gravity theory: long-run, natural or equilibrium reasoning investigates the logical static determination of relative prices by theorists attempting to understand the fundamentals of market (or non-market) economies; short-run, market or disequilibrium reasoning scrutinises the formation of relative prices, that is, the dynamic process (including, possibly, institutional set-ups) necessary to bring about these natural/equilibrium prices.

From Aristotle’s theory of exchange down to the Arrow-Debreu-MacKenzie model of the 1950s, these volumes provide modern economists as well as historians of economic thought with classic texts in the doctrine of ‘just price’, the land theory of value, the cost-of-production theory of value, the labour theory of value and, finally, the marginalist revolution at the root of most modern developments in partial and general equilibrium analyses.

Contents

Volume 1

Part I: Aristotle and the Theory of Exchange
Introduction; Aristotle, Selection from Politics (c. 350 BCE); Aristotle , Selection from Nicomachean Ethics (c. 350 BCE)
Part II: Aquinas and the Notion of ‘Just Price’
Introduction; Thomas Aquinas, Selection from Summa Theologica (c. 1265–74)
Part III: Pre-Smithian Contributions
Introduction; John Locke, Selection from Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money (1691); Nicholas Barbon, Selection from A Discourse of Trade (1690); William Petty, ‘Value of Land’ and ‘The Dialogue of Diamonds’ (1899); Richard Cantillon, Selections from Essay on the Nature of Trade (1755); François Quesnay, ‘Corn’ and ‘Men’ (1756); A R J Turgot, Selections from Reflections on the Formation and the Distribution of Wealth (1766); A R J Turgot Letter from Turgot to Hume (1767)
Part IV: Classical Economists
Introduction; Adam Smith, Selections from An Inquiry into the Nature and Cause of the Wealth of Nations (1776); David Ricardo, Selections from On the Principles of Political Economy and Taxation (1817); John Ramsay McCulloch, Selections from The Principles of Political Economy (1825); Jean-Baptiste Say, Selections from A Treatise of Political Economy (1803) ; James Maitland, Earl of Lauderdale, Selection from An Inquiry into the Nature and Cause of Public Wealth (1804); Samuel Bailey, Selection from A Critical Dissertation on Value (1825); William Nassau Senior, Selection from An Outline of the Science of Political Economy (1836); John Stuart Mill, Selections from Principles of Political Economy (1848)

Volume 2

Part V: Marx’s Economics
Introduction; Karl Marx, Selections from Capital (1867 and 1894); Eugen von Böhm-Bawerk, Karl Marx and the Close of his System (1896); Rudolf Hilferding ,‘Böhm-Bawerk’s Criticism of Marx’ (1904)
Part VI: The Founders of Marginalism
Introduction; Achille Nicolas Isnard, Selection from Traité des richesses (1781); Antoine Augustin Cournot; Selections from Researches into the Mathematical Principles of the Theory of Wealth (1838); Hermann Heinrich Gossen, Selection from The Laws of Human Relations and the Rules of Human Action Derived Therefrom (1854); Henry Charles Fleeming Jenkin, Selection from The Graphic Representation of the Laws of Supply and Demand (1870); W S Jevons, Selection from The Theory of Political Economy (1871)

Volume 3

Part VI: The Founders of Marginalism (continued)
Léon Walras, Selections from Elements of Pure Economics (1874–7); Carl Menger, Selections from Principles of Economics (1871)
Part VII: Partial Equilibrium Analysis, Utility and Costs
Introduction; Alfred Marshall, ‘The Pure Theory of Domestic Values’ (1879); Alfred Marshall, Selections from Principles of Economics (1890); Francis Ysidro Edgeworth, ‘Economical Calculus’ (1881); Francis Ysidro Edgeworth, ‘On Professor Jevons’s Formulae of Exchange’ (1881); Francis Ysidro Edgeworth, ‘The Pure Theory of Monopoly’ (1897); Vilfredo Pareto, Selections from Manual of Political Economy (1906); Frank H Knight, Selection from Risk, Unvertainty and Profit (1921) Volume 4Part VII: Partial Equilibrium Analysis, Utility and Costs (continued)
Eugen E Slutsky, ‘On the Theory of the Budget of the Consumer’ (1915); John R Hicks and Roy G D Allen, ‘A Reconsideration of the Theory of Value’ (1934); John R.Hicks, Selection from Value and Capital (1939); Paul A. Samuelson, ‘A Note on the Pure Theory of Consumer’s Behavior’ (1938); John von Neumann and Oskar Morgenstern, Selection from Theory of Games and Economic Behavior (1944); Milton Friedman and L J Savage, ‘The Utility Analysis of Choices Involving Risk’ (1948); Piero Sraffa, ‘The Laws of Returns Under Competitive Conditions’ (1926); Jacob Viner, ‘Cost Curves and Supply Curves’ (1931); Ronald H Coase, ‘The Nature of the Firm’ (1937); Harold Hotelling, ‘Stability in Competition’ (1929); Joan Robinson, Selections from The Economics of Imperfect Competition (1933); Edward Chamberlin, Selection from Theory of Monopolisitic Competition (1933); John von Neumann and Oskar Morgenstern, Selection from Theory of Games and Economic Behavior (1944); John F Nash, ‘Equilibrium points in N-Person Games’ (1950); John F Nash, ‘Non-Cooperative Games’ (1951)

Volume 5

Part VIII: General Equilibrium Analysis
Introduction; Léon Walras, Selection from Elements of Pure Economics (1874–7); Vilfredo Pareto, ‘The New Theories of Economics’ (1897); Vilfredo Pareto, Selections from Manual of Political Economy (1906); Vilfredo Pareto, ‘Mathematical Economics’ (1911); Karl Schlesinger, ‘On the Production Equations of Economic Value Theory’ (1935); Abraham Wald, ‘On the Unique Non-Negative Solvability of the New Production Equations (Part 1)’ (1935); Abraham Wald, ‘On the Production Equation of Economic Value Theory (Part 2)’ (1936); Abraham Wald, ‘On Some Systems of Equations of Mathematical Economics’ (1936); John von Neumann, ‘A Model of General Economic Equilibrium’ (1937); John R Hicks, Selections from Value and Capital (1939); Paul A. Samuelson, ‘The Stability of Equilibrium: Comparative Statics and Dynamics’ (1941); Oskar Lange, ‘The Stability of Economic Equilibrium’ (1945); Kenneth J Arrow, ‘An Extension of the Basic Theorems on Classical Welfare Economics’ (1951); Kenneth J Arrow & Gérard Debreu, ‘Existence of an Equilibrium for a Competitive Economy’ (1954); Lionel W McKenzie, ‘On Equilibrium in Graham’s Model of World Trade and Other Competitive Systems’ (1954); Hugo Sonnenschein, ‘Market Excess Demand Functions’ (1972); Rolf Mantel, ‘On the Characterization of Aggregate Excess Demand’ (1974); Gérard Debreu, ‘Excess Demand Functions’ (1974)

Volume 6

Part VIII: General Equilibrium Analysis (continued)
Martin Shubik, ‘Edgeworth Market Games’ (1959); Gérard Debreu and Herbert Scarf, ‘A Limit Theorem on the Core of an Economy’ (1963); W Hildenbrand & A P Kirman, Selection from Introduction to Equilibrium Analysis (1976); Nicholas Kaldor, ‘The Irrelevance of Equilibrium Economics’ (1972); Frank Hahn, ‘On the Notion of Equilibrium in Economics’ (1974)
Part IX: Alternative Approaches
Introduction; Thorstein Veblen, ‘The Limitations of Marginal Utility’ (1909); John R Commons, Selection from Institutional Economics (1934); Vladimir Dmitriev, ‘The Theory of Value of D. Ricardo, an attempt at a rigorous analysis’ (1974); Piero Sraffa, Selections from Production of Commodities by Means of Commodities (1960); Michal Kalecki, ‘Costs and Prices’ (1943); Friederich A von Hayek, ‘Economics and Knowledge’ (1936)

Reviews

‘This is a well-chosen selection of classical writings about price theory, that ‘jewel in the crown’ of mainstream economic theory, with a number of sparkling introductions to the various phases of its history…. make no mistake about it, this is a splendid piece of work.’
- Mark Blaug, History of Economic Ideas

'This extensive collection...is a useful and illuminating one and offers convenient access to many significant contributions to price theory.'
- John K Whitaker, History of Political Economy

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