Oskar Morgenstern on Gaëtan Pirou’s L’Utilité marginale de C. Menger à J.-B. Clark

Oskar Morgenstern’s 1940 book review assesses the second edition of Gaëtan Pirou’s lectures on marginal utility, published in 1938. Its central judgment is favorable but discriminating: Pirou offers an unusually exact history of economic theory, although the lecture format encourages repetition, the treatment of American economists is uneven, and the chronological arrangement of criticism creates a methodological difficulty. Morgenstern evaluates both the exposition of particular doctrines and the standards by which a history of economic thought should organize and compare them.

The review opens by locating Pirou’s achievement within the institutional history of French economics:

The development of economics in different countries is intimately linked to the differences in teaching which are to be accounted for largely on historical grounds.

Morgenstern argues that the prominence of chairs devoted to doctrines économiques has encouraged French histories concerned principally with economists’ social and political ideas and personal ideals. Systematic theory has consequently received less attention. He finds this imbalance surprising given the achievements of Cournot, Dupuit, and Walras, and ventures a qualified national characterization: French abstract reasoning, checked by a sense of reality, could resist both vagueness and excessively extended deduction. Pirou’s importance lies in directing the history of doctrines toward the careful examination of theory itself. Morgenstern connects this volume with Pirou’s earlier studies of Walras, Pareto, and contemporary American economics, praising the sustained precision of his engagement with other economists.

That precision comes with an expository cost. Pirou preserves the expansive pace of lectures rather than concentrating their arguments for print. Morgenstern distinguishes the needs of oral instruction from those of a written history:

The detailed, even leisurely way in which the views of Menger, Böhm-Bawerk, Wieser, etc., are represented is no doubt excellent procedure for lecturing since it excludes superficiality and the fatal hurry to "cover" a certain ground; but in a written work the many repetitions are likely to be found rather tiresome.

This is a criticism of presentation rather than scholarship. The same patience that prevents superficial teaching can burden readers, particularly when successive economists hold closely related theories. Morgenstern’s standard is therefore not brevity alone: exposition must preserve conceptual distinctions without reproducing every pedagogical repetition.

Almost two-thirds of Pirou’s book concerns Menger, Böhm-Bawerk, and Wieser, with Menger and Wieser receiving the fuller treatment. Morgenstern commends the accuracy with which Pirou explains both their common positions and their differences over imputation and total value. Production also receives attention; money is covered less extensively, though its value is discussed. Price theory remains comparatively peripheral. Here Morgenstern limits the responsibility attributable to the historian: Pirou himself acknowledges the sketchiness of Menger’s treatment of prices.

The review’s most consequential interpretation concerns competition. Pirou observes that Menger did not give it the commanding position it occupies in the Lausanne system. Morgenstern explains the theoretical significance of the Austrian emphasis:

In fact, Menger, like other Austrians, was rather concerned with conditions of monopoly, precisely the conditions where classical value theory must needs break down most obviously and where the newcomers could show the superiority of their different approach.

Monopoly thus appears as a revealing test of the newer approach to value, rather than merely an exception to competitive exchange. Morgenstern tentatively links this earlier attention to monopoly with Austria’s comparatively restrained reception of the later theory of monopolistic competition. His qualification matters: he offers a possible historical explanation, not a demonstrated causal account.

The American sections expose a different problem: reputations do not travel unchanged across national boundaries. Clark receives sufficient attention, but Carver appears to receive more than Fisher, despite Fisher’s broader range and significant contributions. Morgenstern also challenges the grouping of Seligman and Fetter under “Social Marginal Utility.” Seligman’s “social value” notions, he argues, neither ground nor are necessary to Fetter’s welfare economics. Fetter’s program should be understood independently of those doubtful concepts, while his contributions to value theory deserve a higher assessment than Seligman’s. These objections concern conceptual classification as much as the allocation of space. Pirou also examines institutionalist criticism in America and Hobson’s British challenge to marginal utility; Morgenstern notes that other American writers receive extensive treatment in Pirou’s earlier volumes.

The concluding reservation concerns historical timing. Pirou places a school’s early doctrines against criticisms formulated after that school had substantially developed, sometimes partly in response to those very objections. This arrangement risks making criticism too easily answerable from the standpoint of later theory. A history should distinguish the original doctrine, subsequent challenges, and revisions rather than allow different stages to stand as contemporaneous opponents.

Morgenstern explicitly treats this incongruity as a limited criticism. Pirou recognizes the problem and promises further lectures on the intervening developments. The review accordingly closes with praise for the scholarly objectivity and thoroughness of French teaching in the history of economic thought. Its lasting relevance lies in the evaluative standards it articulates: exact reconstruction of theoretical differences, independence from national hierarchies of reputation, careful separation of neighboring concepts, and chronological fairness in presenting intellectual controversy.