This is embarassing to explain to students. We are a science yet we cannot present are cause effect logic correctly
in the most important graph in supply demand analysis. It is an important intellectual point as well: Is quantity
the force that causes price to move or does price cause quantity to move. I agree with other observers that
some preceeded Marshall and some followed him with this same view. The interesting question is which one is independent
and which one dependent. So much rides on this simple issue.
Scot A. Stradley, Ph.D.
Professor of Finance
Offutt School of Business
Concordia College
Moorhead, MN 56562
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From: Societies for the History of Economics [[log in to unmask]] On Behalf Of Rosser, John Barkley - rosserjb [[log in to unmask]]
Sent: Thursday, February 03, 2011 2:26 PM
To: [log in to unmask]
Subject: Re: [SHOE] The reversed axes of supply and demand
I should say that P on the horizontal axis is how we present it VERBALLY in the stories we tell, not how we draw it on the blackboard. This is one of those things that can lead astute students to ask why the verbal discussion does not correspond with the figure in the way that one thinks of things mathematically most of the time, with the vertical axis representing a variable that is a function of the variable on the horizontal axis.
From: Societies for the History of Economics [mailto:[log in to unmask]] On Behalf Of Rosser, John Barkley - rosserjb
Sent: Thursday, February 03, 2011 3:05 PM
To: [log in to unmask]
Subject: Re: [SHOE] The reversed axes of supply and demand
Cournot had P on the horizontal axis in the 1830s, which is how we present it in most classes, especially introductory ones. This became the convention within the French tradition, followed importantly by Walras. The first to put it the other way was Rau in the early 1840s, although I do not know why he did it that way. The first in the English language tradition was Fleeming Jenkins, although it was Marshall who more or less set the English language tradition. I do not have a source for this, and nobody has said it so far, but what I have seen or heard was that Marshall considered the most important market to be that for bread, still the most important commodity for the majority of the British population, even as late as 1890. In most agricultural markets one can think of quantity as being the variable that is set more exogenously due to weather variations from year to year, so that is why he put Q on the horizontal axis to determine P.
From: Societies for the History of Economics [mailto:[log in to unmask]] On Behalf Of Steve Horwitz
Sent: Wednesday, February 02, 2011 10:31 PM
To: [log in to unmask]
Subject: [SHOE] The reversed axes of supply and demand
Folks,
It’s been a long time since I looked at this issue, so I’m going to rely on the wisdom of this wise crowd.
What is the most accepted explanation for why we have the independent and dependent variables reversed in supply and demand graphs? It came up in class today and I gave “an” answer, but I admitted to my class that I wasn’t confident that I was correct. I also promised them I’d ask all of you.
So what’s the consensus in HET on this issue?
Thanks.
Steve
--
Steven Horwitz
Charles A. Dana Professor and Chair
Department of Economics
St. Lawrence University
Canton, NY 13617
Tel (315) 229 5731
Fax (315) 229 5819
Email [log in to unmask]<mailto:[log in to unmask]>
Web: http://myslu.stlawu.edu/~shorwitz
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