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Three outstanding NOeG presentations: Morgenstern, Viner, and Menger on the laws of costs and returns

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  • Christian Gehrke

    (University of Graz)

Abstract

This paper re-examines three outstanding contributions on the laws of costs and returns that were first presented at NOeG meetings in the interwar period. Oskar Morgenstern, in a paper presented in January 1930, provided a lucid account of the unresolved problems in the Marshallian approach to the construction of long-run industry supply curves. A few months later, Jacob Viner presented his classic paper on “Cost curves and supply curves”. Viner’s contribution, with its rigorous geometrical derivation of industry supply curves from the firms’ cost situations in competitive conditions, became the model for innumerable textbook presentations of these issues, and a springboard for many further contributions. In another brilliant paper, first presented at a NOeG meeting in December 1935, Karl Menger severely criticized the axiomatic acceptance of the law of diminishing returns. Menger showed that the existing a priori “proofs” of this law are invalid, and made a strong plea for empirical verification. The present paper re-examines the three contributions, discusses their importance for the further development of partial equilibrium analysis, and suggests some reasons for their continuing relevance for present-day microeconomics.

Suggested Citation

  • Christian Gehrke, 2019. "Three outstanding NOeG presentations: Morgenstern, Viner, and Menger on the laws of costs and returns," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 519-535, August.
    • Handle: RePEc:kap:empiri:v:46:y:2019:i:3:d:10.1007_s10663-019-09443-8
    DOI: 10.1007/s10663-019-09443-8
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    References listed on IDEAS

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    1. Stanley L. Brue, 1993. "Retrospectives: The Law of Diminishing Returns," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 185-192, Summer.
    2. Arrigo Opocher & Ian Steedman, 2008. "The industry supply curve: Two different traditions," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 15(2), pages 247-274.
    3. Giuseppe Freni, 2001. "Sraffa's early contribution to competitive price theory," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 8(3), pages 363-390.
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    Cited by:

    1. Hansjörg Klausinger, 2019. "The Nationalökonomische Gesellschaft from its foundation to the postwar period: prosperity and depression," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 487-503, August.

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    More about this item

    Keywords

    Cost curves; Diminishing returns; Industry supply curves; Alfred Marshall;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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