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marginalism


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The technique of studying economic change by examining any small rate of change of any one variable (e.g. cost, revenue, consumer satisfaction) relative to another. Analytically powerful because it enables the rules of calculus to be directly applied to economic reasoning. Marginalism was imported into political thinking by economists who turned to politics. The benefit of marginalist thought is that it can dispel common fallacies, for instance ‘We have spent £K (where K is a large number) on Concorde so far and have got nothing to show for it; therefore we should spend the further £K? (where K? is a slightly smaller number) needed to complete the development, so as not to waste the money we have spent already’; or ‘If everybody shirked, no cooperative benefit, such as reducing pollution, would ever occur; therefore I should do my bit’. In each case, only the marginal cost of contributing another pound or another hour is relevant to evaluating the costs and benefits of acting. Some critics have accused marginalism of introducing a selfish orientation to thinking about politics (see economic man).

Subjects: Politics.


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