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Essays in the Development, Methodology and Policy Prescriptions of Neoclassical Distribution Theory

Flatau, Paul (2006) Essays in the Development, Methodology and Policy Prescriptions of Neoclassical Distribution Theory. PhD thesis, Murdoch University.

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      Abstract

      This thesis consists of revised versions of five published papers on the development of neoclassical distribution theory, in the English-speaking world together with an introduction and conclusion, which draw together the themes of the papers. The thesis covers the origins of neo-classical distribution theory in the English-speaking world in the work of Jevons and Marshall, through to the second generation of Wicksteed, Clark and Pigou, and finally on to the 1930s and the new perspectives of Hicks and Robinson.

      Drawing on archival sources and primary and secondary texts, these essays review the major statements on distribution theory made by key figures in the Jevonian and Marshallian marginalist traditions. The essays shed new light on the origins of neoclassical distribution theory and provide insights into the methodology of nascent neoclassical distribution theory. A drive towards a universal, all-embracing marginal productivity theory of the distribution of income characterises the work of Clark and Wicksteed, but not so Marshall. A formalist mode of analysis, which was to become the hallmark of neoclassical economics in the second half of the twentieth century, is also evident in key works of the period. However, the role of empirical evidence in theory generation and appraisal remains an undeveloped component of late nineteenth and early twentieth century neoclassical theory—Marshall again provides an exception to the general rule.

      There is a common adherence, among the key figures examined, to the joint proposition that competitive market wage outcomes are ‘fair’, but that low incomes (fair or not) are unjust when they fail to meet minimum needs standards. State remedial action (tax and expenditure policies) is required to remove such injustices. Robinson’s theory of exploitation provided an important extension to the neoclassical normative framework. She highlighted the extent to which labour may be exploited due to imperfections in both product and labour markets.

      Publication Type: Thesis (PhD)
      Murdoch Affiliation: Murdoch Business School
      Supervisor: Thompson, Herb, Petridis, Ray and Leeson, Robert
      URI: http://researchrepository.murdoch.edu.au/id/eprint/1670
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