Contributions of P.H. Wicksteed (With Critical Appraisal)

In this article we will discuss about the contributions and critical appraisal of of P.H. Wicksteed.

Contributions of P.H. Wicksteed:

1. Labour Theory of Value:

By applying Jevon’s analysis, Wicksteed criticized the Marxian Theory of value. He considered the labour theory of value was wrong.

2. Principle of Marginal Utility:

In his book “The Alphabet of Economic Science” Wicksteed introduced the term ‘marginal utility’. He insisted that this principle should be used in the allocation of all kinds of resources. Wicksteed believed that the utility of a commodity depended not only upon the quantity of that commodity but also of other goods. In his “Commonsense of Political Economy” he introduced another term ‘Significance’.

In his market analysis, he emphasised the importance of expectations and the speculative element in all economic activities. Even though he admitted that it was very difficult to establish an equilibrium price due to miscalculations, he claimed that there always existed such a price at any given moment.

3. Supply Curve:

In his paper “The Scope and Method of Political Economy in the Light of the Marginal Principle”, Wicksteed spoke about this supply curve. The supply curve was indeed the demand curve. He pointed out that under changing conditions, the same person might be a supplier at one moment and buyer at another moment.

4. Co-Ordination of the Laws of Distribution:

This is the most important contribution of Wicksteed to economic analysis. Before Wicksteed, some economists notably Wicksell, J.B. Clark, Marshall, Walras and Edgeworth discussed about marginal productivity Theory. They discussed the rewards of each factor of production separately.

So the laws of distribution could not be co-ordinated. He suggested that these laws could be discussed commonly. Wicksteed believed that the law of exchange value was itself the law of distribution. The exchange value of each good was determined by the marginal unit of that good.

Critical Appraisal of P.H. Wicksteed:

Just like Jevons and Menger, Wicksteed also has an unique place in the history of economic thought. He was an original thinker. Among his contributions, the notable are his theory of distribution, market supply curve, analysis of economic equilibrium and the subjective theory of value. “The Common sense of Political Economy” is the most exhaustive non-mathematical explanation of marginal theory of pure economics.