At the same time as Marx was writing, the principles of classical economics were being reformulated and refined—it was at this time that the term "economics" replaced the term "political economy," which had been used through the mid-19th cent. The most important refinement was the doctrine of marginal utility, which asserts that the value of an item is determined by the need for it and by its relative scarcity or abundance at any given time—not by any intrinsic or inherent worth. The leading theorists in the development of the concept were William Stanley Jevons of Britain, Leon Walras of France, and Carl Menger of Austria. In the United States, John Bates Clark was notable in the development of marginal utility theory, forming his own hypothesis regarding the distribution of wealth. Classical economics reached its fullest expression at the end of the 19th cent. in the work of Alfred Marshall. Marshall used mathematics to perfect the application of classical techniques and introduced important modifications to the notions of competition, marginal utility, and rent.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.