Rothbardian demand: A critique
This paper refutes Rothbard’s claim that the law of diminishing marginal utility implies a non-increasing demand curve. It is argued that the law under Rothbard’s interpretation is, in fact, irrelevant for demand theory. An example of increasing demand is provided.
KeywordsDemand Giffen behaviour Marginal utility Consumer theory
JEL ClassificationB53 D01
I would like to thank Jeffrey Herbener, David Lipka, Joseph Salerno, Dan Šťastný and an anonymous referee for their valuable comments on earlier drafts of this paper.
- Battalio, R. C., Kagel, J. H., & Kogut, C. A. (1991). Experimental confirmation of the existence of a Giffen good. The American Economic Review, 81(4), 961–970.Google Scholar
- Bernardelli, H. (1938). The end of the marginal utility theory? Economica 5(18), 192–212.Google Scholar
- Bernardelli, H. (1952). A rehabilitation of the classical theory of marginal utility. Economica 19(75), 254–268.Google Scholar
- Garrison, R. W. (1985). Predictable behavior: comment. The American Economic Review, 73(3), 576–578.Google Scholar
- Hoppe, H.-H. (2007). Economic science and the Austrian method. Auburn: Ludwig von Mises Institute.Google Scholar
- von Mises, L. (1996). Human action. San Francisco: Fox & Wilkes.Google Scholar
- Rothbard, M. (2009). Man, economy, and state: a treatise on economic principles (2nd ed.). Auburn: Ludwig von Mises Institute.Google Scholar