Thomas Humphrey wrote:
> Mill's purely verbal discussion pertains not to the determination of 
> the price of an individual good, but rather to the determination of 
> the international terms of trade between a country's exports and its 
> imports.
This is truly remarkable.  If Tom is unaware of Mill's explanation of 
(domestic) market prices by supply and demand, here is the text:

"Whether the demand and supply are equalized by an increased demand, the 
result of cheapness, or by withdrawing a part of the supply, equalized 
they are in either case...
     ... the proper mathematical analogy is that of an /equation/. 
Demand and supply, the quantity demanded and the quantity supplied, will 
be made equal. If unequal at any moment, competition equalizes them, and 
the manner in which this is done is by an adjustment of the value 
[price]. If the demand increases, the value [price] rises; if the demand 
diminishes, the value [price] falls: again, if the supply falls off, the 
value [price] rises; and falls if the supply is increased. The rise or 
fall continues until the demand and supply are again equal to one 
another. (Mill /Works/, 3: 467–8; italics original)

Tom also wrote:

> Contrary to James, I doubt Mill's relevance in this connection. For 
> Mill never drew the Marshallian cross diagram, although he did discuss 
> (in words) the concept of supply and demand functions. He can hardly 
> be said to be a precursor -- or grandfather/inventor -- of a diagram 
> he never drew. To jump from a purely verbal treatment of supply and 
> demand to a geometrical, diagrammatic demonstration takes a huge leap 
> of imagination.
Now, nowhere did I claim that Mill drew a diagram.  What I wrote is the 
following:

"As for Marshall's supply and demand diagram, it follows closely after 
J.S. Mill's restatement of the classical theory of value -- explanation 
of market prices.  And Mill was reformulating the theory of value from 
Smith, Malthus, and partly Ricardo.  I wouldn't want to follow Tom's 
treatment of Marshall's recognition for that diagram under Stigler's Law."

A little more careful reading could save a lot of wasteful debate, "me 
thinks."  Marshall trained first as a mathematician before turning to 
economics.  He thus was putting into pictures (diagram) what he'd 
learned from J.S. Mill.  That was my point.

James Ahiakpor

-- 
James C.W. Ahiakpor, Ph.D.
Professor
Department of Economics
California State University, East Bay
Hayward, CA 94542

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