What Is Supply-and-Demand? The Marshallian Cross Versus Classical Economics

Tony Aspromourgos

Review of Political Economy, 2019, vol. 31, issue 1, 26-41

Abstract: This study argues that the supply-and-demand apparatus of the ‘Marshallian cross’ is an unsatisfactory representation of actual supply and demand forces, which are better characterized in the manner of the classical economists. Most particularly the rising supply function but also the conventional demand function, are shown to have no compelling general theoretical justification. There is no plausible basis for a presumption in favour of the former—other than the marginal productivity theory of factor pricing, which is itself unsatisfactory. Multiple reasons are suggested for the rise of the apparatus of supply-and-demand functions, notwithstanding its intrinsic implausibility. The classical conception of supply-and-demand is restated and reaffirmed.

Date: 2019
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DOI: 10.1080/09538259.2018.1537646

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