Interesting. Steve asked if there was a consensus view on the issue, and the hypothesis that seems to resonate with most of those who have piped in is that Marshall wanted to depict his market demand & supply curves as the sums of the individual curves. The source, I gather, is Blaug. But is there evidence for this in Marshall?

Another explanation seems (at least) equally plausible, and it's the one I offer to my students.

The answer has to do with Marshall's desire to establish doctrinal continuity between the new marginalist theory and Ricardo's theory. The classicals explained price in terms of cost of production, with cost understood to include a normal rate of return on capital. And they recognized that cost of production depends partly on the scale of production. In manufactures, higher levels of output can be produced at lower per-unit cost owing to economies of scale (see ch. 1 of The Wealth of Nations). In agriculture and other extractive industries, diminishing returns tend to prevail. The classicals up to and including Ricardo never conceived this commonplace empirical observation as a functional relationship, though in places transitional figure J. S. Mill does appear to treat it that way.



In any case, for Marshall, who was trained as a mathematician, it was a small step to suppose that the relation between cost and quantity could be presented as a functional relationship. Following the classical reasoning, quantity was the independent variable: hence the supply curve, with (independent variable) Q on the horizontal axis. But since, in the new theory, the supply curve must interact with a demand curve to determine price, Marshall was compelled to interpret the demand function in a rather peculiar way in order to preserve symmetric treatment of Q as the independent variable: instead of asking, as we now do when we teach this to undergraduates, "how many units will be sold at such & such a price?", Marshall asks "what price can the seller obtain if he wishes to sell such & such a level of output?" This formulation, from which we get the concept of "demand price", makes quantity the independent variable. The modern conceptualization clearly treats quantity demanded  as a function of price, so the conventional positioning of the axes looks anomalous. In Marshall's conceptualization of the model, however, placing Q on the horizontal axis makes perfect sense.



Early S&D theorists who had no particular interest in establishing a Ricardian pedigree for their models quite sensibly placed P on the horizontal axis & Q on the vertical axis: Thomas Wells has mentioned Cournot. I would add Fleming Jenkin and, indeed, Walras.



Gary

Gary Mongiovi, Co-Editor
Review of Political Economy
Economics & Finance Department
St John's University
Jamaica, NEW YORK 11439 (USA)

Tel: +1 (990)-7380
Email: [log in to unmask]
________________________________________
From: Societies for the History of Economics [[log in to unmask]] On Behalf Of Humberto Barreto [[log in to unmask]]
Sent: Thursday, February 03, 2011 10:17 AM
To: [log in to unmask]
Subject: Re: [SHOE] The reversed axes of supply and demand

> Davenant and King were friends. Most people assume that Davenant took
> the idea from King.

Thanks, Michael.

Stigler wrote:
"A  century  later  these  calculations  were
attributed  to  Gregory  King  by  Lord
Lauderdale,28  without  any  known
basis ;29  and  since  then  they  have  usu-
ally  been  known  as  Gregory  King's
"law."

That's where I got my understanding that Davenant was the first, but I
confused it in retelling it. Sigh.

Still leaves the question of why "most people" credit King. Stigler is
saying "without any known basis." Any thoughts or citations on that?

--
Humberto Barreto
www.depauw.edu/learn/microexcel