Gary mentions that the passages from Knight "rightly emphasize the cost side without tracing the issue back to the classicals, which I suspect is necessary to solve the puzzle." Although Marshall may have kept at least a finger in the pot of the classicals, I do not believe that this is so of Knight. In other words, Knight was not interested in tracing the issue back to the classicals because he believed that this mode of thinking about demand and supply was rendered obsolete by the "neoclassical." Knight (and Davenport before him) emphasized the entrepreneur point of view because he adhered to the revolution ushered in by the 19th century subjectivists. To the subjectivists, all economic value could be traced to subjective utility as perceived by minds that knew about goods, resources and the /causal connections/ among them (technology). This idea was most clearly stated by Menger (1871) in his definition of a good. In the image of an economy that was built from this point of view, the function of the consumer is to attach utility to goods. The function of the entrepreneur, or producer, is to appraise goods and resources by using his knowledge of consumer demand and his knowledge of the causal connections. The judgments and decisions of interacting entrepreneurs can be conveniently called the "entrepreneur process." It is conceived as one in which entrepreneurs transform consumer demand for all commodities, emanating from the minds of consumers, into money opportunity cost, which is in the entrepreneur's mind. It was important to the users of this point of view and of this conception of the entrepreneur process to be able to trace every market price through the entrepreneur's mind back to the subjective utility of the consumer. To be able to do this was a test of one's success in mastering the new theory. It was in this sense that one might say, as some of the Austrians tended to do, that utility is the source of all value. A good intermediate reference on the theory of value referred to here is Bohm Bawerk. B?Bawerk, E. (1894), "The Ultimate Standard of Value," Annals of the American Academy of Political and Social Science (September), in Shorter Classics of Eugen von B?Bawerk, South Holland, Ill.: Libertarian Press, 1962. In that article, Bohm tries to provide a clear distinction between the subjectivist approach to the demand-supply problem and Marshall's approach. In addition, he presents what seems to be one of the earliest effort to work through the problem of tracing price back to utility through the mind of the entrepreneur -- i.e., through the entrepreneur process. In the old classical theory, price was determined by demand and supply. In the new theory, a single price was determined by the demands of consumers for the good and by the collectivity of entrepreneurs via an entrepreneur process that takes account of (1) all of the demands for all of the goods and (2) all of the knowledge of the means of supplying those goods (technology). Finally, although the interrelationships between demand and supply can be represented by (or derived from) a general equilibrium model of the Walrasian type, it is evident that unless the economist treats such a model only as an auxiliary (as I hope most teachers do in the classroom), she risks losing touch with the essence of the new theory -- i.e., with the entrepreneurial process. Pat Gunning