Merchant banks in the 1870s who independently put forward the theory of value based on marginal utility and whose work had a profound influence on the subsequent evolution of economic thought gossen, h. h.; jevons, w. s.; walras, m. e. l.). Exchange takes place, he argued, because individuals have different subjective valuations of the same commodity. Menger saw commodities in terms of their reverse order in the productive process, i.e. bread is prior to flour and flour prior to wheat. The price of the first order commodities, which is determined by their exchange for consumption, is imputed back through to the higher ordered commodities. The theory of diminishing utility was the catalyst which eventually unified the theories of production and consumption. Menger himself, however, overemphasized consumption demand in the theory of value, just as the classical economists had overemphasized production supply marshall, a.).
Mercantilism. The growth of international trade and the establishment of the power of the merchant after the medieval era led to the emergence of a body of thought, between the mid sixteenth and late seventeenth century, which was primarily concerned with the relationship between a nation’s wealth and its balance of foreign trade. The mercantilists recognized the growing power of the national economy and were in favour of the intervention of the state in economic activity to maximize national wealth. Partly because the monetary system was very primitive in relation to the growing needs of economic expansion, mercantilist writing was often overburdened with the identification of national wealth with precious metals. However, its leading writers did make important progress in developing economic thought and made significant contributions to the analysis of international trade problems. <=$ malynes, g.; misselden, e.; mun, t.; serra, a. Best Family Vacation Destinations in Minnesota – Top Family Vacations
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