Question

In what respects are Chamberlin and Robinson clearly in the marginalist or neoclassical tradition? In what respects are they outside the mainstream of that tradition?  

Answer 1

Neo classical economics says that human economic behaviour is universally self interested ,profit seeking and maximizing . Basic principles says that,

• Human nature is inherently selfish but rational
• Capitalism system of private property and free markets , makes freedom possible.
• The market is most efficient way of organizing economic behaviour

Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary or marginal utility.

Edward Chamberlin was a neoclassicst who united monopoly and perfect competition into monopolistic competition . He assumed identical cost of production between firms. He was a strong favourer of perfect competition.

Joan Robinson was Marshal's student at cambridge . He defined that the imperfect competition includes monopsony, in which workers are exploited . Accordingly all factors are exploited under imperfect competition ,not just labour. She was best known for her book" The Economics of Imperfect competition ". She examined markets where there are few competitors and coined the term " monopsony" which means a market with only one buyer .

In treatment of monopolistic competition Edward chamberlin and Joan Robinson were usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. While their contributions were indeed simultaneously developed, it is inappropriate to treat them as having duplicated each other's effort. Whether the discussions of imperfect or monopolistic competition centres on chamberlin or Robinson , monopolistic competition generally is seen as a departure from the ideal of perfect competition that results in a loss of economic welfare. Often this departure is seen as failure in need of corrections through government interventions

Despite the tendency to interrupt chamberlin and Robinson has simultaneously developed essentially the same theory of monopolistic competition ,historians of thoughts have not considered them to be equal giants in the field. Chamberlin had imfluence in spatial economics ,the modern development of location theory in Regional economics ,he rightfully regarded as the inspiration of modern industrial organisation economics